Start-up and Lawyer, the winning duo?

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Lawyer offers for start-ups are in full development. Indeed, with the start-up and start-up trend, business services are adapting to keep up. Thus, lawyers set up tailored support offers to become reference actors with entrepreneurs. Lawyers and startups are well aware of the importance of quality legal advice from the start of an activity and throughout its development. However, this is also an expression of a difficulty in bringing supply and demand together. Indeed, it is difficult for law firms to match the needs of start-ups since they “have needs inversely proportional to their means”. (1)

Specialized lawyer for start-ups, a growing offer

Despite these easily understandable difficulties, many law firms still develop an adequate offer for start-ups. And for good reason, beyond the immediate financial contributions, the benefits for lawyers are also elsewhere. In reality, some offers are sufficiently successful to allow a win-win exchange. On the start-up side, it benefits from support at the launch and throughout its development at a suitable cost. As for the law firm, he works his brand image as a modern player, offers stimulating projects to his employees and, above all, positions himself as a partner of choice with companies with high growth potential. Thus involved in the success of the start-up, it contributes to its valuation and becomes the law firm of a company with much greater means and needs.

A renowned law firm, August Debouzy launches the eighth season of Start You Up in September 2020. Thiscompetition allows the firm to select 5 winners to support them in their development on all necessary aspects. Writing statutes and contracts, taxation, international deployment, internet law…

lawyer for starting a business and legal advice for start-ups
Demand from lawyers is changing, leading to the development of legal advice offers for start-ups

In addition, start-ups are by definition evolving very quickly, these law firms are also changing their ways of working. To get in tune, some are transforming themselves in the “start-up” way: flexibility, innovation, responsiveness… They integrate collaborative tools, offer online services, redesign their business models. This approach seems to be paying off especially in the Covid period. For example, the Bordeaux-based company La Fabrique Juridique notes a 45% increase in online appointments between March and June. At the same time, it sees a 25-30% increase in online requests for legal acts (2).

Digital is therefore definitely a prominent part of the development of avocado and start-up offers.

Legaltech, understand the environment of law start-ups

Legaltech start-ups, a real tidal wave for traditional lawyers?

In this context of the growing demand for legal support for start-ups, lawyers are not the only ones to respond. Any evolution has its share of opportunity. In recent years, the sector has seen the flowering of companies and online offers of legal services for startups (3).

Thus, legaltech start-ups or legal start-ups appear on the market and compete with traditional law firms. If there has been a marked increase in the number of initiatives in this area, it is clear that not all of them are able to stand out. Indeed, there is a high concentration of fundraising to develop these solutions. In 2019, 5 actors alone raised 70.9% of the funds (4). On French territory, however, there are between 180 and 200 legaltech start-ups on the market. The LegalTech trend therefore does not call into question the legitimacy of lawyers and does not seem ready to come and replace them.

evolution business lawyer innovation and legaltech for start-ups
67% of legaltech players are start-ups. Only 12% are traditional players in the law. (5)

A legaltech offer that struggles to meet real needs

Several factors may explain this large disparity. Starting with the concentration of start-ups on rather limited themes. Thus, about 36% focus on creating legal acts, nearly 20% of start-ups work on digitalization of business processes, 20% are more focused on connecting. On the other hand, only 11 to 12% focus on aid in dispute resolution and artificial intelligence, or 4% on predictive justice (5). Thus, at present, LegalTech seems to be very much concerned with issues that are already almost obsolete. Indeed, high-performance solutions such as Captain Contract or LegalStart have already won the contract.

On the other hand, the subjects able to revolutionize the legal professions remain little explored. It must be said that issues such as machine learning, predictive justice or intelligent legal intelligence require non-negligible financial resources and scarce technical skills. In this regard, it is often reference actors, such as Lexis Nexis, who take over these subjects.

Yet these are the ones that would effectively meet the needs of start-ups. Artificial intelligence optimizes the work of lawyers. They are therefore able to offer a better quality job, at a better price. In addition, these tools are an opportunity to revalue the work of legal professionals, towards more precise legal advice, a better customer relationship.

Sources:

(1) Village Justice, “The interest of law firms in start-ups”, updated on 6 April 2020

(2) Telephone interview with Pierre Colliot of La Fabrique Juridique on September 15, 2020

(3) Les Pépites Tech, The start-ups lawyers of France

(4) Wolters Kluwer France, “French Legaltechs, Trends 2019”, 22 January 2020

(5) Village Justice, Guide and Permanent Observatory of Legaltech and Law Start-Ups,” updated September 1, 2020

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