Tomorrow’s law today: More legal firms embracing tech than before

Malaysian courts will soon see the use of artificial intelligence, virtual courtrooms and holograms, Chief Justice Tan Sri Richard Malanjum declared in his opening speech at the Legal Year conference in Putrajaya last month.

Though the judge admits that the judiciary’s goals in its journey to 2025 are lofty, real change is taking place in the country’s legal system as the lawyers, courts and tech players push the age-old profession into the digital age.

“The legal profession must embrace technology. There is no option. Adapt or be dropped,” he warns.

Some of the updates being rolled out by the judiciary include video conferencing between Kuala Lumpur, Penang and Shah Alam courts which was expected to be completed last month, review for case management in Peninsular Malaysia by March to catch up with Sabah and Sarawak courts, and a Case Management System for documents so lawyers can go mostly paperless by June.

The changes are not only taking place in our courts – private enterprises dabbling with legal tech solutions are also growing in Malaysia, according to research by independent strategy consultant Eric Chin.

At the opening of the Legal Year conference, Malanjum spoke on the judiciary’s goals for adopting technology, from becoming paperless to adopting video conferencing. — Bernama
At the opening of the Legal Year conference, Malanjum spoke on the judiciary’s goals for adopting technology, from becoming paperless to adopting video conferencing. — Bernama

He reports that Malaysia has 20 such firms, putting it slightly behind Indonesia (22) and Singapore (23) in South-East Asia.

Malaysian law firm Mah Weng Kwai and Associates recently set up a technology research and development arm in Singapore – MWKA Technologies Pte Ltd – to work on mobile strategy, digital transformation and fintech law.

Another firm to have jumped on board the bandwagon is Foong Cheng Leong and Co with its FCL&CO Case Law Search app which catalogues some 12,000 cases.

Unlike most law libraries, the app is free, making it a significant resource for boutique and single-owner firms which may not be able to afford subscription-based libraries that are costly.

The firm’s namesake and founder, Foong Cheng Leong, says the app was built in collaboration with another company.

He says that technology which enables lawyers to work more efficiently is a bigger priority than solutions for the public such as lawyer matching services, and tech companies should consult lawyers to grasp what the industry actually needs.

“The industry is still at its infancy, but newcomers may need to go through the Bar Council hurdle to see if they are in contravention of the Legal Profession Act (LPA) 1976,” he opines.

The LPA defines acceptable conduct and business practices for lawyers, and violating it can result in members being fined or even disbarred.

Making it law

Since last July, the Bar Council has been seeking suggestions from its members and followed it up with meetings with lawyers in 12 peninsular states between last November and December before drafting the amendments to the LPA.

The co-chairpersons of the Bar’s Committee to Reform the Legal Sector, George Varughese and Kuthubul Zaman Bukhari, recently issued a circular to lawyers on the proposed changes to the LPA that would include regulation specifically on legal technology.

Any technological product or service used by lawyers in the course of their work, or which allows a person to hire a lawyer is now defined in Part IV: Rights Of Advocates And Solicitors, Section 35 on Legal Technology in the draft.

Here, the Bar Council states it may make rules to regulate any legal technology or its provider, though in doing so it will consider the promotion of technological innovations, and the interest of the public and the Bar’s members. Any contravention by a legal technology provider will result in the revocation of the Bar Council’s approval or any exemption previously granted, according to the amended LPA.

The Bar Council will also be able to apply to the High Court for an order to restrain the company from offering its product or compel the relevant authority to restrain or limit access to said product.

Those breaking the Bar Council’s rules will be liable to a fine not exceeding RM10,000 and if the offending party is a lawyer or in a limited liability law partnership, they are liable to face disciplinary proceedings.

LawTech Malaysia strategy lead Adeline Chin questions the extent of the amendment – for instance, if it affects all technology, from firm management software to even productivity suites and messaging services.

The organisation, which is a grassroots movement made up of lawyers, former lawyers and tech players, notes that stakeholders outside of members of the bar were not consulted. 

The draft of the LPA was submitted to the Attorney General (AG) on Jan 9 and is subject to further edits by the AG and the Parliament before it can be passed.

Challenges and exits

Rather than challenge the Bar Council’s regulations, some startups have changed their business models or withdrawn from the Malaysian market.

BurgieLaw, which started as a lawyer market place – which helps users connect with professionals in a specific area of law relevant to their needs like criminal defence, family or employment law – is now focusing on legal templates and also organising workshops.

The legal template service will allow users to draft their own contracts or formal documents using templates, and will also connect users to lawyers to verify the document.

BurgieLaw chief technology officer Louis Gan says the company is fascinated with documents, and it is an area in which the firm hopes to build its next product.

FCL&CO Case Law Search, which catalogues some 12,000 cases, is available for free to everyone, even non-lawyers. — AZHAR MAHFOF/The Star
FCL&CO Case Law Search, which catalogues some 12,000 cases, is available for free to everyone, even non-lawyers. — AZHAR MAHFOF/The Star

Another player in the lawyer marketplace vertical was CanLaw, which had its marketplace service suspended in April 2017 and it eventually shuttered at the end of 2018.

The suspension was due to the Bar Council investigating whether lawyer marketplaces were considered touting and in violation of Section 37(3) of the LPA, which criminalised third parties that offered a lawyer’s services.

Another legal tech company, Hong Kong’s Dragon Law also came under scrutiny even though it only offered its legal template service here, while reserving its marketplace service to Hong Kong customers. The company has since rebranded as Zegal and withdrawn from the Malaysian market.

CanLaw former marketing and communications head Pang Jo Fan reveals that while suspended, CanLaw focused on tech adoption consultancy for lawyers and tech events, hosting two legal conferences called LexTech.

“We understood that innovating one of the oldest professions in the world is not something that will happen overnight so we tried to keep going as much as we could,” he says.

He notes that large firms are generally more open to adopting new technology, as they have more resources to look for new ways to deal with large workloads, while smaller firms hold onto the misconception that technology is expensive.

Another concern is the issue of the low cost of labour in the industry, which he points out has commercial considerations for firms when choosing between adopting technology or hiring a clerk to undertake the same tasks.

He says several factors led the team to close the project: CanLaw drifting away from its initial objective to assist people to get better access to justice; it was difficult for staff to stay on without a scalable business model; and consideration for the team’s career prospects after three years of working on the project.

Pang, who continues to work in the industry as Legal Hackers KL co-chapter head, says: “With a couple of new startups and legal tech communities coming up, we are confident that there are great people who will continue furthering this cause and perhaps with enough persistence, the door will one day be opened.”


Related article: Changing Perceptions

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