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Small and medium-sized enterprises (SMEs) need legal advice just like any other business, but in most cases, traditional law firms can be prohibitively expensive. This is where the application of technology can help, by reducing costs and making legal services available to all.
Asia, and in particular South and Southeast Asia, has seen a veritable explosion in startups today. A wave of entrepreneurship is sweeping the region, as an entire generation of young people places less emphasis on joining established companies, and instead looks to strike out on its own.
With small and medium-sized enterprises (SMEs) expected to drive Asia’s economic growth in the near future, the need for legal services is also expected to skyrocket. But there is one major obstacle they face – cost. For new companies that may just have tens of thousands of dollars in seed money that has been painstaking cobbled together from family and friends, spending a large chunk of it on a law firm hardly makes for a justifiable business decision.
Singapore law firm MG/Chambers, which considers itself an SME, says it is very aware of the challenges that SME owners face. “In our experience,” says Mark Goh, founder and director of the firm, “most SMEs are cost-sensitive, and cost is the major barrier to entry when it comes to obtaining legal services. And unfortunately, traditional law firms’ ’per hour’ fee model does not alleviate their cost concern.”
As a result, most SMEs and startups often look to the Internet for free legal templates. These are often used ”off the rack” without proper review, and thus may not be relevant to their needs, occasionally ending up being unenforceable or legally meaningless.
Luckily for startups, the landscape is rapidly changing, with the rise of legaltech companies like Dragon Law, and the entry of traditional law firms like Rajah & Tann into the SME space, meaning that legal services are now growing increasingly affordable.
And this is being underpinned by technology, which, by automating or otherwise accelerating the pace of mundane legal tasks, both reduces costs for SMEs and makes it commercially worthwhile for the providers of services. Technology is also empowering lawyers to focus on understanding the clients’ business, maintain better client relationships and deliver high-value legal advice.
PROVIDERS BIG AND SMALL
Leading the charge are legaltech companies like Dragon Law, which was established in Hong Kong in 2014, and now has clients across Southeast Asia. “We are all about technology,” says Ryanne Lai, the company’s head of law firm partnerships “We provide SMEs and startups with a platform that lets them create, store and e-sign a huge variety of legal and business documents. Traditionally businesses with little or no legal budget would be forced to scan the internet for documents, or borrow from friends; but now they can go to a SaaS solution they trust where they can build bespoke documents in a quick and easy-to-use way.”
Document creation, howver is one thing – a live lawyer is another. Both clients and legaltech companies realise there is no way technology can fully replace the function of a lawyer, who assesses and ensures that the terms of an agreement are aligned with a client’s intent. For this, Dragon Law has come up with its "Premium Plan" solution, which gives the firm’s customers access to an independent lawyer via LiveChat in its platform. “For this, the customers pay the law firm a small recurring monthly fee, and both the lawyer and the business owner can start to develop a mutually beneficial relationship,” says Lai.
But it’s not just technology companies are getting into the space. In 2015, Rajah & Tann launched Business Fundamentals, a dedicated practice group to cater to SMEs and startups by offering cost-effective and reliable growth-stage appropriate legal documentation, advice and representation in deal-making, dispute resolution and contract drafting.
To contact the writer, please email raj.gunashekar@tr.com.
