Legaltech battles Brazilian bureaucracy to streamline industry

Startups pursuing technology-centered approaches to legal work are blossoming in some of the world’s most lawsuit-heavy countries, but the burgeoning industry is finding a particularly steady foothold in Brazil. Although the number of legaltech companies has grown by 38 percent in the U.S. and 34 percent in China during 2016 alone, the industry’s development has the potential to revolutionize Brazil’s notoriously complicated legal sector.

Legaltechs are finding that there are plenty of areas where technology can be applied, allowing the legal system to operate more smoothly and more fairly. In addition to complex legislation, there’s also the challenge of bureaucracy for those seeking legal services.

Moreover, Brazil’s courts are overloaded: the National Council of Justice found that in early 2014, there were some 70.8 million pending lawsuits. A further 28.5 million were filed over the course of the year, leaving the judicial branch with 99.7 million cases to review. Cases are rarely quick to resolve, therefore incurring high costs. In 2016, the judiciary system cost more than BRL 84 billion—approximately 1.3 percent of the country’s GDP that year.

Consequently, the legaltech sector has grown rapidly in Brazil, increasing fivefold from 30 companies in mid-2017 to 150 in early 2019. Currently, legaltechs have begun expanding into eight specific fields including automation and document management, public data monitoring and...