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Is Singapore the Next Center for Legal Innovation?

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(Photo: xtock/Shutterstock.com)[/caption] The Singapore government is making a big push to promote legal sector innovation, fostering programs and initiatives that encourage the development of legal tech and other advancements in law. But in other parts of Asia, including Hong Kong, legal innovation has been largely left to the market. Lawyers say Singapore has made noticeable progress in legal innovation largely because of the role played by the government, which has rolled out several initiatives designed to help build an ecosystem that fosters cooperation in the local legal community. In 2016, the Singapore government announced a five-year overarching plan to develop an innovation-driven economy and pledged a $13.6 billion public investment in research and innovation over the five years ending 2020. Last year, the city-state said that an additional $110 million will be invested into artificial intelligence startups and products over the course of five years. That commitment to innovation is starting to translate into action within the legal community. In May, Clifford Chance announced a plan to launch a Singapore-based Asia Pacific Innovation Hub—the city-state's first innovation center coming out of Big Law. The hub was created with support from the Singapore government, Clifford Chance said. In fact, the firm's Singapore innovation hub, which is designed to drive regional legal project management tech programs that improve innovation and efficiency, is directly in line with the Singapore government's Professional Services Industry Transformation Map—a set of initiatives launched in January to encourage new business solutions among professional services firms, including law firms. For the legal sector specifically, the government has launched the Future Law Innovation Programme, or FLIP, a series of initiatives that aim to bring together lawyers, tech entrepreneurs, investors and regulators on legal technology and innovation projects. Linklaters and Baker McKenzie are among the global firms participating in FLIP. Linklaters partner Sophie Mathur, a member of the FLIP steering committee, said Singapore has done a good job of bringing together the public and the private sector, with the government acting as a catalyst. "The end goal is to make Singapore a hub for legal tech," said Mathur. "But you need to have the ecosystem first." Mathur said the Singapore Academy of Law, the government body that oversees the FLIP program, has been helpful, talking to industry participants, including global law firms, and hosting events like Hackathons to build up technology literacy in the profession. But the Singapore government's contribution to legal innovation goes further, lawyers say. It is also promoting legal innovation through legislative change. The market drives innovation — but public policy helps Mathur, who co-heads Linklaters' global innovation program with London partner Paul Lewis and Frankfurt partner Christian Storck, said that client demand is always the number one driver behind legal innovation. But she also noted that government-led change in policy and legislation can have a huge impact. For example, the nation's central bank, the Monetary Authority of Singapore, has been making efforts to regulate cryptocurrency offerings—a move that should impel lawyers to improve their technology literacy. It has been widely noted that Singapore is fast becoming a global cryptocurrency hub; it was the third largest market globally for token sales after the United States and Switzerland in 2017. "The MAS is actively pushing a fintech agenda and that type of work is coming in," Mathur said. "If law firms want a piece of that, they have to be educated in technology." Ben Allgrove, Baker McKenzie's research and development partner who oversees the firm's multiple legal innovation projects, also says the government of Singapore is taking action that fosters innovation. "Legislative change is key," Allgrove said. "Regulations are usually inflexible to innovative disruption [but] Singapore is building the infrastructure to allow innovation in law to happen." The situation is quite different in Hong Kong, Singapore's rival regional financial hub. While the private sector and academia have been active in Hong Kong's legal tech and innovation initiatives, the territory lacks a concerted effort from the government side. Like Mathur, Sebastian Ko, a senior in-house counsel and Asia Pacific director for the e-discovery firm Epic, said client demand is the main driver behind legal innovation programs. Most legal innovation activity in Hong Kong is produced at the grassroots level because the market is demanding it, he said. "There is a business case when you have robust demand from corporations and the banks to invest in technology," said Ko, whose firm recently developed a cloud-based court services tool out of Hong Kong. "How else are you going to meet all the discovery requirements within a tight deadline?" In addition to innovation in commercial law, Hong Kong lawyers also apply tech-enabled solutions to issues such as access to justice. Ko, who is also a member of the Law Society of Hong Kong's InnoTech committee, helped organize a two-day access-to-justice hackathon in April. And earlier this year, a group of local law students who emerged from Hong Kong's first-ever legal hackathon won the public sector solution competition from the Global Legal Hackathon with a machine-learning powered browser extension that deciphers local legislation. The Global Legal Hackathon's winning team was made up of law students from the University of Hong Kong and the Chinese University of Hong Kong—two of the three universities in the city that offer law degrees. The University of Hong Kong Law and Technology Centre, a collaboration between the law and computer science faculties, has helped host a series of legal innovation-related seminars and conferences among private practitioners, scholars, and alternative legal vendors. In January, CUHK law faculty's Centre for Financial Regulation and Economic Development launched the Machine Lawyering blog, which analyzes the interaction between law and technology. However, despite efforts by the law society, a professional body, and the universities, Hong Kong has not seen any major government-sponsored programs such as those that exist in Singapore. And lawyers have taken note. In his annual address in January, former law society president and Mayer Brown JSM partner Thomas So acknowledged that efforts made in other jurisdictions to incorporate technology, such as artificial intelligence, in legal practices will contribute to the competitiveness of the profession. "Law Societies from a number of jurisdictions had published comprehensive roadmaps, which set out blueprints on how legal technology must be captured in their services," So said. "In this regard, it would seem that the legal sector in Hong Kong has got some catching up to do." The catching up appears to have started. In the 2018-19 budget released in February, Hong Kong Financial Secretary Paul Chan said the government will invest $6.4 billion in biotechnology, AI and fintech. Thomas So mentioned in the speech that the law society is proposing several initiatives including cyber law firms and the development of a mobile app that facilitates online payment for legal services. "Our wider aim is to encourage more in the profession to raise their technology competencies," he said. The law society is also working with the Department of Justice of Hong Kong to develop an online dispute resolution platform for cases arising from China's Belt and Road Initiative—the Chinese government's massive economic plan in which hundreds of billions of dollars worth of projects have been initiated across Asia, Eastern Europe and Africa. The online platform is called eBRAM.hk, an acronym for Belt and Road Arbitration and Mediation. "Innovative technology has greatly helped the development of dispute resolution services. I believe the establishment of a safe, reliable and credible platform to provide...convenient and cost-effective online dispute resolution will become a new trend," Hong Kong Justice Secretary Teresa Cheng said in May as she announced the project. Epic's Ko said the eBram system, once launched successfully, would put Hong Kong on the legal innovation map. Meanwhile, the programs in Singapore are moving forward. It's still too early to know whether they will propel Singapore's innovation. Market demand will always be a key factor. But government programs can foster ideas and create a climate for inventiveness, lawyers say. Baker McKenzie's global innovation committee held its first Asia meeting in Singapore last week. The Southeast Asian city-state is among the location options for the firm's first Asia Pacific innovation hub. The firm currently has two innovation hubs in Toronto and Frankfurt. Allgrove, who is based in London, said he was impressed by the government of Singapore's forward-thinking approach to innovation in the law. "I'm not a believer in innovation from the top down," he said. "But having sponsorship and leadership helps."