[The Editors' Verdict] Digital Platforms and LegalTech

Even now, it is natural to seek out experts to find answers to questions, but the emergence of search portals like Google and Naver has greatly reduced reliance on experts. In particular, Naver Knowledge iN, a kind of knowledge-sharing service, played a significant role. However, Knowledge iN had limitations in responding to consultation demands that require higher reliability and confidentiality. In response, Naver launched Knowledge iN Expert. In the case of legal experts, users can select the lawyer they want and receive online consultations. Naver acts as an intermediary for lawyers and charges a commission. This is a kind of paid version of Knowledge iN.

Naver has already become a digital platform used by almost the entire nation, equipped with four key strengths: technology, subscribers, deregulation, and an innovative mindset. It is forming a vast digital empire by expanding into real estate brokerage, news, and recently shopping and finance. Now, it is even influencing the conservative and closed lawyer market. The legal community has immediately reacted with opposition. They filed a complaint with the prosecution, arguing that mediating and referring lawyers and receiving commissions violates the Attorney-at-Law Act, which prohibits partnerships with non-lawyers. In response, Naver claims that since the system does not introduce or connect users to specific lawyers but gives users the choice, it is not mediation or referral. Also, the fees are not for Naver’s profit but only cover actual costs paid to Naver Financial, a payment agency, so it is not profit-taking.

Whether this violates the law will be decided by judicial authorities, but following conflicts between the taxi industry and platforms over mobility innovation, and between traditional financial institutions and big tech platforms over innovative finance such as MyData, a conflict has now arisen between the professional qualification industry of lawyers and platforms. This case, one of the conflict types between old and new industries due to digital transformation, offers several implications.

First, underlying the platform’s entry into the lawyer market is the trend of LegalTech. LegalTech is a new form of legal service combining law and technology. As the internet has become widespread and information technologies (IT) such as big data and artificial intelligence (AI) have advanced, convergence with these technologies is accelerating in the legal market. Examples include AI-based case law analysis and provision, legal document drafting support, and online legal consultation services. This conflict shows that the legal market has reached a point where it must choose whether to adopt 4th Industrial Revolution technologies.

Second, it concerns improving consumers’ accessibility to legal services. Since the introduction of law schools, an enormous number of lawyers have entered the market. The number of lawyers has surpassed 20,000 and is heading toward 30,000. However, consumers have no way to find capable and diligent lawyers other than through word of mouth or relying on former high-ranking officials. LegalTech resolves this information asymmetry and enhances consumers’ access to legal services. It is like choosing a lawyer as if shopping. Ratings and reviews attached to each lawyer induce service competition, enabling high-quality services.

Third, according to the Attorney-at-Law Act, lawyers are legal professionals with public nature, and their mission is to uphold fundamental human rights and realize social justice. While this noble and righteous image of lawyers is undeniably important, it may be time to ease excessive public regulation to fit the digital age. For example, the prohibition on partnerships is criticized for blocking the participation of non-lawyers in LegalTech, ultimately hindering the development of related industries.

Recently, the transition to an untact economy due to the novel coronavirus infection has inevitably accelerated the online and digital transformation of the legal market. Now, digital innovation in the legal profession is not a choice but a necessity. It is hoped that the conflict between platforms and the legal industry will be wisely resolved from a consumer-friendly perspective so that the fruits of innovation through LegalTech can benefit consumers.

Seong-Yeop Lee, Professor, Graduate School of Technology Management, Korea University / Director, Center for Technology Law and Policy

This content was produced with the assistance of AI translation services.