Spain may be the legal tech underdog in Europe. Indeed, its neighbors and compatriots, including France, the U.K., and Germany, are known for having significant and innovative legal tech markets catering to attorneys around the world—and Spain has historically relied on them for the same solutions.
However, that began to change about two years ago, catalyzed by COVID-19 and the pressure Spanish law firms faced from from international clients looking for better tech solutions.
Laura Fauqueur, Spain’s ambassador for the European Legal Tech Association (ELTA), told Legaltech News that since then, the country’s legal tech market has taken off, with flocks of law firms developing their own tools on the side, and local legal tech startups proliferating.
While many of these startups have shuttered or consolidated, the burst of activity lit a fire under legal tech entrepreneurship in a country that boasts the fourth largest number of lawyers in the European Union.
Of course, Spain has an upper hand in Spanish-speaking regions, giving the country’s legal tech market the potential to target native Spanish-speaking markets that others, such as the U.S., have attempted to enter.
“The interesting thing is that many of the Spanish-speaking Americas have [legal] systems similar to ours in Spain, much more than the U.S. [legal] system,” Fauqueur said. “They had the first direct contact with the U.S. and the U.S. [legal tech] tools, and, the [U.S.] tools have been marketed in their countries. But they also saw that that was not working for them. So they started looking at us.”
Legal professionals from countries like Mexico, Peru and El Salvador often reach out to ELTA, and are increasingly curious about Spanish legal tech solutions, she said.
Additionally, Argentinian legal professionals and tech providers tend to travel to Spain to market their tools and sometimes bring Spanish tools home with them. What was once a great dependency on U.S. and U.K.-based legal tech solutions is slowly shifting, Fauqueur noted, with the barrier to language being a large reason as to why.
“Spain has kind of become a [bridge] between Europe and South America, that’s the place you want to start if you are a European legal tech tool that wants to expand to South America and [vice-a-versa],” Fauqueur noted. “I’ve been contacted by legal tech [companies] from the Baltic countries for example, which natively grow outside of their frontiers because they’re very small countries… they will want to go to Spain, and then South America.”
Of course, Spanish legal tech represents a small portion of all the legal tech that attorneys in Europe, or even within Spain, use.
For example, Paul Handal, a legal tech partner at Spanish law firm ECIJA, said his firm, and many others in the country still rely primarily on the U.K. and the U.S. for their legal tech solutions.
“I think this legal tech market is still dominated by foreign legal tech companies, like Thomson Reuters’ HighQ, ContractPodAI and Icertis,” Handal said. “But we do have small, tiny startups that are beginning to rise [in Spain].”
For Handal and Fauqueur, one main obstacle stands in the way of Spain’s legal tech solutions rapidly expanding beyond the country: the General Data Privacy Regulation (GDPR) and its impact on AI.
To be sure, the country is investigating OpenAI’s data privacy practices, and the AI company’s popular tools, such as ChatGPT, are avoided by many in Spain’s private sector. What’s more, there is a general inertia around AI use in the Spanish legal market, without which, the country could harness its Spanish data to train generative AI solutions, Handal said.
“Unlike what you do in the U.S., I think data is something that still stays underused everywhere in Europe, and [certainly] in Spain,” Fauqueur noted. “In terms of legal tech, what I want to see [in Spain] is more data analysis. It’s something we are not good at. I think we are good at protecting [data], but we protect so much that we don’t even get it ourselves.”
This doesn’t mean that things aren’t changing. With increased demand for Spanish legal tech, its providers are cultivating their tools so they are marketable in other Spanish-speaking countries. What’s more, there is no dearth of attorneys in Madrid to test these new solutions on, she added.
