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Legal Tech in South Korea

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While Europe and the US are seeing a rapid expansion in the legal tech industry, South Korea has just jumped on this tech bandwagon. There are just a handful of legal tech startups and only a few law firms that have explored the possibility of incorporating legal tech into their services. Some of the companies that are paving the road to innovation in South Korea’s legal industry include:

  • Intellicon, which created smart search software for finding precedents and laws; 
  • Lawform, which provides legal document automation service; and 
  • LawTalk, which allows real-time consultation between a client and a lawyer. 

With South Korea having just passed the starting line in the global legal tech race, it’s a good time to examine the current state of South Korea’s legal tech industry, and take a glimpse at what the future may hold. 

The rise of Legal Tech in South Korea

Legal tech startups in South Korea first appeared around 2015. Since then, legal tech has diversified into various areas of legal services, from document automation to smart searching of legal information. This newly found legal tech industry has been constantly growing since. Some of the leading law firms in the country have adopted legal tech into their services. Kim & Chang, South Korea’s biggest law firm, used its in-house e-discovery software when analysing over 100,000 pages of documents for an international arbitration case, and law firm D’Light created a piece of software called “Comake”, a blockchain-based contract drafting service. 

The South Korean government has also started investing in legal tech, although investment has been limited to technologies that could be used in criminal cases, such as criminal profiling systems and algorithms that could predict an offender’s crime.

There are several reasons why legal tech has become a trend in South Korea:

  1. Development of information and communications technology (ICT)

South Korea ranked second in the 2017 global ICT Development Index (IDI), published by the United Nations, and the current President Moon Jae-in has been promoting AI as a core national industry to turn South Korea into an “AI powerhouse”. Last year, the Ministry of Science and ICT launched $441.8 million worth of R&D projects on data technology and AI. Recent developments in ICT facilitated the integration of legal services and technology and enabled the creation of big data and AI-based legal tech products and services. 

  1. Increased competition in the legal industry

Internally, there has been a significant rise in the number of lawyers in South Korea after replacing the bar exam with law schools; the pass rate rose hugely following the introduction of the new law school route to becoming a lawyer. Externally, after opening up the legal market to foreign countries in 2012, many foreign law firms have opened up Korean offices, bringing further competition. It has become more important than ever for lawyers to provide competitive services by increasing efficiency in the legal workplace and expanding their customer base by making it easier for the public to access legal services. The use of legal tech is making these goals possible. 

The Obstacles

Despite a strong technological base and growing interest in legal tech, there are reasons why South Korea has not yet seen a boom in this new industry. 

The biggest obstacle to innovation is uncertainty in the law. South Korean law only permits lawyers to provide legal services. There are currently ongoing debates as to whether legal tech products amount to providing a legal service, and would therefore be a breach of the law if provided by non-lawyers. Also, the law prohibits partnerships between lawyers and non-lawyers. This causes difficulty when legal tech startups consisting of non-lawyers who try to partner with lawyers to provide legal tech services. There are criticisms that these restrictions are unnecessarily blocking non-lawyers from engaging with the development of legal tech and that it is too restrictive from the perspective of IT companies if only lawyers or law firms are allowed to provide technology-based legal services. Due to this strict law, currently many of the founders of legal tech startups in South Korea are lawyers.

Another obstacle is lack of access to precedents. South Korea does not publish precedents except in a very few cases. Since the quality of AI-based software depends on analysing large amounts of data, if the public cannot access precedents, it is difficult to develop high-quality AI-based legal tech such as legal research technologies or prediction technologies that help lawyers predict the outcome of proceedings. In the current situation, it is only big law firms that have their own databases of precedents that could successfully develop high-quality AI-based legal tech. Since legal tech has the potential to drive down the cost of legal services by bringing efficiencies to the day-to-day work of lawyers, limiting the development and use of legal tech products to a few big law firms will not be beneficial to the legal industry as a whole or to its clients. 

The Future

The future of legal tech in South Korea depends on the willingness of the legislator to respond to the changing legal market and development of technology. Although the National Assembly—the legislative body of South Korea—seems reluctant to amend the law to allow more people to engage in legal tech, the ICT industry, lawyers and some of the members of the National Assembly are constantly urging the Assembly to reform the outdated law. 

The application of legal tech in countries like the UK and the US has shown how legal tech can bring about greater efficiency in the legal industry and improve access to justice for the public. The benefits of legal tech are clear and South Korea has advanced technology to realise those benefits. However, they will not be realised unless there is a supportive legal landscape approving the development of the legal tech industry in South Korea. The world constantly changes and so should the law. Whether South Korea will catch up to others in the legal tech race or lag behind remains to be seen. 

Sara Moon

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