‘Legal Department as a Service’ Project Wins Funding

A project to build a ‘legal department as a service’ (LDaaS) platform aimed at helping smaller companies without their own inhouse legal teams, has won funding as part of a €191 million package of support for 16 data infrastructure initiatives across Europe. It is estimated the project will receive about €12m ($14m).

The LDaaS or ‘virtual legal department’, which will operate through the creation of a legal data ecosystem, was proposed by the Germany-based Liquid Legal Institute (LLI) – (see story about their work on building an open-source NLP library) – and has been funded by GAIA-X, an initiative backed by European governments to help digital data harmonisation across the Continent.

Or, as GAIA-X explained: ‘[The aim is to] connect centralised and decentralised [data] infrastructures in order to turn them into a homogeneous, user-friendly system. The resulting federated form of data infrastructure strengthens the ability to both access and share data securely and confidently.’

One major reason for this is that European nations speak a large number of languages, and although in theory the European Union is one entity, in reality every country has seen their own mix of data infrastructures evolve at a local and industry sector level. The challenge there is that they don’t necessarily work with each other.

OK, so the need to share data and have data standards across borders makes a lot of sense. But what has this got to do with legal tech and the law? As LLI explained: ‘For companies – especially for start-ups and SMEs without a legal department – legal transactions are associated with very high transaction costs.

‘This is due to several reasons, including the lack of a digital marketplace with non-proprietary and open standards for the collaboration of law firms, legal tech service providers, public administration, and courts.’

So, to that end, together with partners from industry and research, LLI has set itself the goal of creating this ecosystem, initially focused on Germany. This will also have its roots in the ideas behind an earlier project called The Common Legal Platform.

Artificial Lawyer asked Bernhard Waltl, board member at LLI and a Legal Operations Officer at car giant, BMW, if he could expand a bit on what this is all about.

This sounds very interesting, but what exactly are you trying to build here?

It is not 100% clear what it would be in the end. If it would be, we wouldn’t need a research project and with research institutions involved.

But, we can say that from LLI’s perspective it will be a workspace with marketplace functionalities, with a high focus on ecosystem service, such as vendors offering professional legal services.

The pilot will focus on creating a virtual legal department, one could say a Legal Department as a Service, for SMEs and start-ups.’

Got it, so could we perhaps define it this way: that it will be a ‘virtual legal dept where law firms are connected, along with legal tech vendors, to provide a service to companies that are too small to have their own legal teams’?

Yes, we can live with that description.

A company can then contact this platform and ask legal questions and get legal documents, all of which would be supported by a number of tech applications?

Yes, we can also live with that description.

– Companies without legal teams will naturally have to pay for this service?

Yes, we are focused on a freemium model, since some services will be free of charge, and others will be available with a cost model which needs to be defined.

– How much will this funding be for?

The GAIA X initiative funds 16 projects with a total amount of €191 million Euros. We cannot tell you the exact value of our project. However, you can roughly estimate, because all projects will be funded more or less equally. The actual funding is still subject to a budget approval by the Federal Ministry for Economic Affairs and Energy.

How will you spend the money?

The money will be distributed within the project consortium, which consists of nine different partners. The partners within the consortium (see note below) were carefully selected to cover expertise in the legal industry, software technology and development, research and technology transfer, and business development. Furthermore, the consortium covers well-established companies on the market as well as non-profit organisations and start-ups.

The project will start in 2022 and will last for at least three years.

What will success look like?

The project is successful if the consortium develops a Digital Legal Ecosystem as a marketplace that is accepted by supply-side and demand-side.

The proof-of-concept is a virtual legal department that flexibly scales depending on the needs of the company, which is either a start-up or SME for the pilot phase.

Success includes the establishment of a strong community of additional partners in the tech field who are open to collaborate and let the platform grow, either with additional commercial offerings, or by strengthening the federated services, which will be free of charge.

We consider this project funding as an opportunity to kick off an MVP that demonstrates the huge potential for the whole legal industry. The fact that GAIA X is supporting us is a strong signal that Digital Sovereignty is essential for platforms in the legal space – not only for Europe.

Thanks, and good luck!

P.S. the partners of the consortium are at present:

Ebner Stolz Mönning Bachem mbB, ESCRIBA AG, FZI Forschungszentrum, Informatik, Gesellschaft für Informatik e.V., Join GmbH, NAIX Technology GmbH, STP Informationstechnologie GmbH and Unterschied & Macher GmbH