Where Is China Heading With Legal Tech?

By Tianyu Yuan and Michael Wang

China is not only one of the world’s biggest economies, but has also evolved from merely being the workbench of the world to a global AI and tech superpower. One reason for China’s technological success seems to lie in the active governmental support of the development of advanced technologies.

Take, for instance, the judiciary: in 2017 the Supreme People’s Court launched the China Judicial Big Data Service Network, a platform which aims to improve judicial decision-making and trial efficiency through the use of judicial big data and artificial intelligence. This is one of many steps envisaged by Supreme People’s Court President Zhou Qiang to integrate advanced tech into the justice system.[1]

While there is much Western coverage about China’s rise in AI, little is reported on China’s legal tech developments. And yet, China is already a growing force in this domain. Just last year, 51% of all legal tech patents were filed in China.[2] Moreover, Chinese legal tech companies have received massive fundings in the last years. However, legal tech in China did not leapfrog into its current position, but gradually evolved over the years.

From ‘Internet+Law’ to ‘LawTech’

The development of legal tech in China can be divided into three stages: ‘Internet+Law’, ‘Legal e-commerce’ and ‘LawTech’.

Legal tech was first known as Internet+Law. It primarily involved innovation in project management, billing and legal research. Furthermore, there were online platforms which allowed users to ask legal questions – though lawyers would usually tell users to visit a law firm for detailed legal advice. Around 2010, the combination of legal services and the internet evolved further.

A wave of e-commerce companies providing legal consulting services, such as Yifa or Green Dog Network, began to emerge. This wave of legal tech became known as Legal e-commerce. In 2015, legal tech in China then underwent a shift away from Internet+Law to LawTech.

The Legal Tech Landscape

Better access to justice for clients

Because China’s legal services market is quite young, it suffers from a shortage of legal professionals. As opposed to one lawyer for every 300 citizens in the US, there is only one lawyer for every 4,500 citizens in China. Thus, a major application of LawTech is to use technology to make legal advice and proceedings accessible and affordable for ordinary citizens.

An example of this is Fagougou, an AI-based system that offers affordable legal advice on areas such as traffic accidents and employee disputes. It also provides case prediction and precedents analysis.

A different example pertaining to court proceedings is the WeChat based app Weisu (created by Gridsum). It allows users to attend trials from home via video call, submit court files and give testimonies which are transcribed by Wechat’s voice-to-text technology. Weisu was first used in the Beijing Intellectual Property Court in 2017 and is frequently used in intellectual property trials.

Process Automation for Lawyers

Shortage of Chinese lawyers is not only a problem for clients, but it also means that to meet the demand for legal advice, lawyers need to make the provision of legal services more efficient. In addition to digitalizing legal research with online databases such as pkulaw.cn, Legal Tech is now also being applied to process and workflow automation.

‘There is only one lawyer for every 4,500 citizens in China.’

One such workflow automation tool is Alpha developed by iCourt, a practice management and office automation system which includes case management, document management and client communication. According to iCourt, more than 15,000 individual lawyers and 900 law teams have registered with Alpha.[3]

Legal Tech Platforms

A third flavour of LawTech in China are platform-type services known as O2O (online to offline). These platforms are the Uber-equivalent for legal services as they enable clients who are seeking legal advice to find a suitable lawyer more efficiently.

China is said to have more than a hundred of such services, but the most representative one is Yingle which is backed by Tencent.

Digital Justice System

Because of the shortage of legal professionals, Chinese courts are overworked and judges are reportedly leaving the profession due to low salaries. Moreover, Chinese courts are accused of being intransparent. To improve transparency, China has started live-streaming trials with the Supreme People’s Court having live-streamed over two million trials.

The digital transformation of China’s judicial system is further exemplified by the growing presence of online dispute resolution in China. 2017 saw the creation of internet courts in Hangzhou, Beijing and Guangzhou, with the Hangzhou court having heard over 26,000 cases since it was founded.[4]

Legal tech companies such as Thunisoft are also powering the digital transformation of China’s justice system. The company helped to construct a big data management and service platform for Chinese courts, which has aggregated data of 140 million cases from 3,525 courts.

Driving The Change

With virtual courts and AI lawyers, China has been making large strides in legal tech. To understand China’s legal tech growth, it is important to keep in mind the two main factors driving the change, which are unique to the situation in China.

What sets China apart from Western countries is that the advancement of Chinese legal tech is largely state-backed, as can be seen from the founding of internet courts and the progressive integration of legal tech into judicial processes. The government’s active support of legal tech seems to be motivated by a desire to improve the quality and transparency of judicial decision-making.

A second major difference between China and the West is that the modern Chinese legal industry is only about 30 years old. This has two significant implications for legal tech development in China. Firstly, as China’s legal industry is quite young and under-developed, the Chinese legal community as a whole is generally forward-thinking and open towards innovation.

Secondly, there is a severe lack of experienced local lawyers. In this situation, using legal tech is not only necessary to deliver legal services with greater efficiency and reliability, but having the latest legal tech also means gaining a competitive edge.

[This is an educational guest post for Artificial Lawyer.]

About the authors

Tianyu Yuan is a German lawyer, legal tech founder and research associate at the Heidelberg University Faculty of Law in the domains of computational legal studies, legal automation, and AI and law.

Michael Wang is an advanced student at the Heidelberg University Faculty of Law.

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Notes:

[1] Press conference regarding the launch of the China Judicial Big Data Service Network, 2017-11-30, https://www.chinacourt.org/chat/fulltext/listId/48766/template/courtfbhcommon/subjectid/courtfbh20171130.shtml.

[2] Financial Times, 2019-02-17, https://www.ft.com/content/13ec27bc-304c-11e9-ba00-0251022932c8.

[3] Caixin Global, 2017-12-11, https://www.caixinglobal.com/2017-12-11/could-ai-transform-chinas-legal-system-101183154.html.

[4] Legal Daily, 2019-08-15, http://www.legaldaily.com.cn/IT/content/2019-08/15/content_7965913.htm.

[Main photo – iCourt, legal tech company, China.]