SUMMARY
LegalDocs started off with no investment except for a laptop and $7,085 for marketing
It aims to be a one-stop shop for all documentation and accounting requirements in India
LegalDocs gets about 500 orders a month, bringing in a monthly revenue of $21,256
In July 2016, India got its first e-court, which was opened at the Hyderabad high court. Also in July 2016, brothers Gaurav Kumar and Makarant Kumar, along with their friend Shrishail Phope, embarked on an entrepreneurial journey in the legal tech domain. Their startup — LegalDocs — is an AI-powered online service that enables its customers to create, validate, and receive legal documents such as rental agreements, affidavits, wills, property registrations, etc, without stepping out of their homes.
It was a personal experience that made Gaurav come up with the idea of a legal tech startup. “I was the first of the three founders to get married. As a newly married couple, we faced a lot of trouble in getting our marriage certificate and filing affidavits to change our names/marital status on our passports and other documents,” says Gaurav.
The founder believes that the main problem was lack of knowhow about legal processes and documentation — something a majority of Indians have to contend with. Also, there is no legitimate process, with reliable professionals and standard pricing, for people to obtain legal documents.
Thus, the trio launched LegalDocs, with an aim to make it a one-stop shop for the documentation needs of enterprises/businesses as well as individuals. It provides services such as company incorporation, ROC filing, GST registration and filing, MSME consultation, notarised and registered rental agreements, apart from consultations with industry experts.
“For a long time, fragmented agents with small kiosks were the only means for people to obtain legal documents. With LegalDocs, we aim to standardise the legal documentation process and make it extremely accessible to the masses,” explains Gaurav.
Mentored by startup accelerator and seed fund Axilor Ventures, LegalDocs claims to deliver 3,000 documents and reach about 10,000 users per month. It also claims to be the biggest collector of stamp duty in Maharashtra.
The startup has tieups with well-known real estate platforms, a strong B2B network of 500 real estate brokers, and around 100 chartered accountants on board, who refer their clients to LegalDocs for their documentation needs. It is also collaborating with food delivery services to help them meet their compliance requirements, says Gaurav.
LegalDocs: Creating An Edge With AI And Automation
Like all other domains, the legal sector has been disrupted in recent years by tech-enabled solutions. There are quite a few startups in this space — including Legaldesk.com and Legalraasta among others — trying to change the status quo and take on a brigade of traditional small agents.
“These agents conduct all their operations manually. They charge $78 – $85 (INR 5,000-INR 6,000) for a food license which we provide for $7 (INR 500) only. Our USP is automation and we will leverage it fully as volumes increase in the future,” says Gaurav.
He explains that the three steps in the legal documentation process are drafting, paying stamp duty, and getting documents validated. All the three steps are taken care of by LegalDocs. Customers can go online and can create documents such as rental agreements, affidavits, wills, property registrations, etc, and receive the documents at their doorsteps.
Here, the backend heavy lifting is done by automated machines and the drafting of documents is done using AI.
Based on a customer’s geographical location and the data provided, the AI categorises all the relevant data. It then identifies the customers’ requirements and prepares the relevant documents in a manner that they’re in the customer’s favour.
For example, if a tenant and a landlord have an agreement, and the tenant employs LegalDocs to prepare the documents, its AI system will identify any clauses in the agreement made by the landlord to exploit the tenant. The AI also notifies the customer when he/she has any payments due.
The second vital service provided by the startup is accounting services, which it is building an AI for.
“Our main goal is customer satisfaction since our customers are our primary marketers. We aim to fulfil customer needs efficiently so that they’re happy and keep coming back to us,” says Gaurav, adding that 30%-40% of LegalDocs customers learnt about the company through word of mouth.
Just A Laptop And A Lot Of Hard Work
The total initial capital required for the startup was minimal — just the cost of a laptop. “Our only investment was a lot of hard work,” says Gaurav.
The founders did invest about $7,085 (INR 5 Lakh) towards marketing, which came from their personal savings. They also marketed their brand through Facebook, Quora, real estate platforms, and digital media. The result: Within the first few months, LegalDocs saw a growth of 30%-40% in the number of orders received on the platform.
Although initially, the startup didn’t make any profits, in a year’s time, it was receiving over 500 orders a month and generating a monthly revenue of $21,256 (INR 15 Lakh).
At the time, LegalDocs had 500 users, delivered 500 documents every month, and was operational only in Mumbai and Pune.
Mentored and guided by Axilor Ventures, Legal Docs slowly built its way up. In the first year, it only generated and delivered rental agreements. Later, it moved into other segments and spread its services to Delhi and Bengaluru as well.
An AI-Powered Legal Tech Solution For All
Even though the founders did not have to worry about funding, they faced other teething troubles, akin to any other startup. Having no educational or work-related background in business management, they found it difficult to manage certain areas of the business, like the cash flow for instance. Setting up a team and developing the skills required to run a business were some other initial obstacles.
However, the biggest challenge LegalDocs faced was educating people about online documentation and convincing them to move away from the manual setup. Since most people in India are used to the conventional way of obtaining legal documents — through agents — they were initially mistrusting of an online legal documentation system.
Many doubted the legitimacy of the documents delivered by LegalDocs. “People thought that documents coming from an online service could be fake,” says Gaurav.
The founders say it was an immense struggle to convince customers that the documents were legitimate and that this was a much more convenient and economical way of doing things.
But the startup seems to be going places now — its projected revenue for the month of July 2019 is $2.1 Mn (INR 15 Cr) and it is targeting 1 Mn customers by then.
The market potential can be gauged by the fact that this number comprises less than 0.1% of the total market. The potential demand for documentation in India is roughly 70 Mn documents annually. And the CA services potential market is valued at approximately $2.8 Mn (INR 20 Cr) annually.
And the legal documentation industry could definitely do with some technological intervention. A very small percentage of Indians has insurance and basic documentation like wills, property registrations, etc. With awareness increasing and laws becoming tougher, the market for documentation and financial accounting will only grow.
Ask Gaurav where he sees LegalDocs in five years and he replies: “We see ourselves as the one-stop shop for all documentation or CA requirements. Since we’re driven completely by AI, our prices will be affordable for all segments of society. The masses will have access to services which they could not afford till now.”
With AI on his side, Gaurav’s claim seems completely legit!
