Legal tech is worth billions. This startup is taking it global

When Uber crashed into global markets with its American guns blazing, it sent a message that it didn’t have time to cater to the individual laws of its scores of target markets. It certainly has the world’s attention now, but not without heavy costs, considering the legal battles it’s had to wage from the US to Indonesia and South Korea.

Uber is one of many startups that are joining banks and Fortune 500s in the race to go global. And its legal woes show that big or small, companies that expand internationally often get stuck in legal muck as they stumble with learning and adapting to foreign regulations. Local governments within a single country still struggle to get on the same page and make their information easily accessible, but it’s a problem that technology has largely yet to solve.

Photo credit: Keith Mascarenhas

The legal tech industry is still ripe for disruption worldwide, and solutions for mending the legal gaps are still few and far between. FiscalNote, a Washington-based startup, aims to bring the conversation to Asia.

CEO Tim Hwang envisions a future with a globally transparent and fluid legal infrastructure, where a patent lawyer can look up laws that are changing in Paris, Tokyo, or Singapore in real time as easily as one reads the news, and instantaneously understand the context of how it will affect a business.

“The legal industry is one of the largest industries on earth. It’s a trillion-dollar-plus industry, and when I think about technology and the broader trends within pretty much every major industry, the legal industry has not been disrupted,” he tells Tech in Asia on a recent visit to Seoul, South Korea. “There’s no data analytics, there’s no artificial intelligence, they barely have mobile applications.”

But current market leaders like Thomson Reuters and LexisNexis, which have built a US$10 billion-plus market over the last few decades, have no impetus to innovate or change, he says.

“I think for us to be the real category leader in technology innovation in the legal space is going to be a massive, massive driver of ways in which people are interacting with legal information and the broader relationship between the legal system and people.”

Dumb problem

Tim learned the frustrations from experience. Before entering the startup world, he began his political career at age 17 when he was elected as a student member to the board of education in his home state of Maryland in the US, and later led the grassroots nonprofit National Youth Association. He faced the recurring problem of constantly finding himself short of time to prepare for bills he had to fight.

The US is made up of a complex Congress system, 50 state governments, and some 3,000 municipalities, and analyzing how laws change across the country takes significant time, he explains. Tim says most attorneys hire massive staffs to create these reports manually, and law firms charge companies ungodly amounts, from US$100,000 to $200,000 for a 50-page analysis, which is well out of the budget of a startup, local politician, or NGO.

“This is a really dumb problem, just trying to get information. It’s not an incredibly hard problem in the 21st century,” he says. From a computational perspective, he explains, it’s easy to build systems to aggregate and classify information, and a web app to access all of it.

FiscalNote co-founders CEO Tim Hwang (center), chief strategy officer Gerald Yao (left), and chief technology officer Jonathan Chen.

So he and two friends built a search engine to look up laws around the country in real time, and they incorporated FiscalNote in 2013. Tim, 22, is now at the helm of a startup that’s raised US$18 million from the likes of China’s Renren, Singapore’s Temasek Holdings, and Taizo Son’s San Francisco-based Visionnaire Ventures, which has extensive networks in Japan.

Global solution

Game plan