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Africa & Middle East Article

Evaluating the Potential Growth of Legal Tech in Nigeria

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As a result of Covid-19, it has become clear that there needs to be a more efficient way for lawyers to work around the globe. This calls for an innovative approach to work and the adoption of new technology. Global law firms have invested heavily in legal tech in recent years. For example, Linklaters launched an Artificial Intelligence (AI) technology system named Nakhoda, which uses AI to enhance the efficiency of legal processes. However, there still seems to be a question of how adopting technology in African legal systems might play out. This article will aim to examine the potential growth of the use of emerging technology in the Nigerian legal system.

Worldwide investment in technology for law firms hit a record high in 2019, with companies like Docusign, who specialise in electronic agreements and digital signatures, raking in over hundreds of millions of dollars from public shareholders. Despite that, investment in LegalTech in Africa, and Nigeria in particular is still relatively low. One notable investment is the $70,000 seed funding given to the award-winning DIYlaw, a start-up which offers online legal information, which came first in the Innovating Justice Award organised by the Hague Institute for the Internalisation of Law in 2016. 

There is hope that, since the market for LegalTech is still largely open in Nigeria, the potential benefits will draw more investors in a way similar to that of the FinTech sector. Top-tier law firms which have significant financial resources are likely to adopt LegalTech first. We can already see some signs of this due to the Covid-19 induced lockdown. For example, Olaniwon Ajayi LP, a top national firm, became the first firm to offer a virtual internship to the public. The 2007 Rules of Professional Conduct for lawyers do not stop lawyers from practising at home, which has led to the virtual law firm, Infusion Lawyers, making inroads in the country. While these are still green shoots, all these point towards a growing acknowledgement for the need for the practice of law to be redefined in Nigeria.

The adoption of technology such as blockchain and Artificial Intelligence (‘AI’) may also lead to a culture change in dispute resolution in Nigeria. Their adoption would lead to faster and cheaper resolution of disputes which is key for a developing economy. Due to the cumbersome process of litigation and ADR in Nigeria, many citizens do not see dispute resolution as a worthwhile option. For example, in Lagos State it was found that it took the courts an average of 583 days to resolve a case. This alarming number does not even include further extensions due to the appealing of the verdict. 

Given Nigeria’s population has quadrupled to approximately 185 million since it gained independence in 1960, and is estimated to double by 2050, there is an urgent need for an agile response to enable access to justice for its citizens. Notably, the Supreme Court of Nigeria adopted an automated case management system in 2016 which shows a growing trend towards legal innovation even before Covid-19. There are also various start-up legal technology services that have sprung up offering DIY (Do it Yourself) solutions, legal information and reports such as DIYLaw, LawPavilion, Compulaw and Legalpedia. Interestingly there is also an unused online dispute resolution portal by the Lagos Chambers of Commerce. In August 2020, Lagos state launched E-laws in which laws of the state can be accessed by individuals through an application. When these systems are fully integrated, they will offer a good source of data for machine learning algorithms.

Implementation of technology such as blockchain and AI through smart contracts and integrated risk management platforms would help minimise the risk in commercial contracts that lawyers take on in the nation. For example, in a current case the Nigerian Government is liable for $9.6 billion in damages against a company named Process and Industrial Development (P&ID) after it breached terms agreed in a 2010 gas facility contract. A more thorough due diligence process with the use of AI technology could have allowed the Nigerian Government to decide if P&ID was a ‘fit’ company for the contract, which is the main argument in their appeal. The final outcome of the case could cost the nation about 2.5% of the country’s annual GDP or a loss of valuable assets.

There are clearly benefits from the increased use of emerging technologies in the Nigerian legal sector. However, there are also major implementation challenges that need to be solved. For example, a single Bitcoin transaction can take 470 kilowatt-hours to complete, which is the equivalent of powering the average American home for two weeks. In a country where its power supply is still largely unstable, setting up blockchain technology seems unlikely in the near future. A viable option may rely on the use of other technology like AI to enhance legal processes, which depends largely on the use of data. However, to enable this to work Nigeria must develop a more sophisticated data culture to prevent its exploitation, which the country has already experienced in relation to oil. The creation of the Nigerian Data Protection Regulation offers substantial hope towards achieving this.

In conclusion, it is clear there is potential growth for the increased use of technology in the Nigerian legal system as there is a developing attitude and cultural shift towards the adoption of technology in the legal sector which will hopefully accelerate due to the impact of Covid-19. However, to make it work and bring its desired benefits there must be a clear willingness by all stakeholders such as the government, investors, major law firms and lawyers towards its implementation and regulation.

Oluwaseye Kola-Ojo

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