The legal services is a big industry in Bangladesh. It is largely archaic in nature. It is one of the many industries in Bangladesh where technology adoption is relatively slow.
Over the last couple of years, we have seen technology disrupting many industries. We have seen bKash taking over mobile banking. We have experienced a huge boom in e-commerce. We are seeing an increasing number of transportation-tech, health-tech, and Edtech startups in recent times.
However, one common thing about all these startups is that they are trying to replicate something that worked in some other parts of the world, something that is a little trendy and hot and probably not that hard to start.
I’m not saying that these sectors are not potential or these problems are not worth solving. These are definitely critical problems and there is a market for all of these startups. But I think there are many more interesting sectors that we should pay attention to but we are not.
The point is that instead of flocking towards a handful of overcrowded sectors we need to think hard and find real problems and solutions. Even if those sectors are not hot momentarily. Hot ideas do not always make good business. Contrary, there are sectors that are often overlooked but offer huge opportunities. The Legal sector is one of such industries.
There are tons of problems to fix in our legal services industry, such as law firm management software, lawyer discovery platform, document processing system, legal counseling and more. Every one of these is an interesting problem with solid business opportunities.
In the last couple of years, we have not come across any company that is trying to solve any of these problems. [Probably there are companies but we are not aware of any.] Which means the sector is largely unexplored.
Here is an interesting question to ponder upon: why people choose one sector over another when it comes to starting a company? The reason is largely extrinsic for the majority of entrepreneurs. Our ideas are largely shaped by what we see and what we consume. A large number of entrepreneurs are interested in eCommerce because we want to emulate the success of Amazon or Flipkart or Snapdeal. We want to start a transportation app because we know about Uber or Didi Kuaidi. We seldom come across any company in legal tech space which is making the wave. But the sector has been seeing a quiet revolution in recent years.
According to Tracxn, the startup research firm, “over $1.4B has been invested in the sector since 2010, with ~ $540M+ invested in 2015-16 YTD”.
The data shows, the legal industry is pretty slow when it comes to technology adoption but in recent years, the sector is picking up. The year 2014 saw a sudden spike in funding in funding in the legal startups. 2015-16 has also seen a significant increase in funding. There are all kinds of companies that received funding in this sector: software services, B2B and B2C lawyer-marketplace, and more.
There is a steady growth in funding. 2013 saw the biggest spike in the number of deals but subsequent years also experienced a consistent growth in funding.
Here are a few sectors that have received widespread attention from investors. eDiscovery, software as service as well as the marketplace for lawyers received the highest funding followed by legal document services, IP management, and lawyer's marketplace. On another side, online dispute resolution and enterprise legal management sit at the bottom of funding funnel.
If you want to build a big business take an industry which is not digital yet and digitize it, said Pascal Finette of Singularity University. In Dhaka, if you are looking for one no doubt Legal tech is the one.