For many young startup Founders, navigating the legal minefield can be a time-consuming and hair-tugging task.
Legalese, a new Singapore-based legaltech startup established by JFDI Asia founders, wants to disrupt the legal solutions paradigm and reduce reliance on lawyers by creating smart and secure legal templates.
It is currently working on developing a new open source programming language for contracts called “L4”, which aims to make it possible for contracts to be formally verified as correct, consistent and complete.
How will L4 relate to traditional law? Wong Meng Weng, a co-founder of Legalese and computer scientist said that they’ll “compile to English”
Referring to the current template solutions, he explained that semantics are the next step: if computer understands the content of a contract, it can say, `this clause contracts that.’ With semantics, one will program in L4, and then compile into English or any other natural language. In the future, contracts will no longer be written by hand by junior lawyers, but will be compiled by computer.
“We’re part of a worldwide movement to marry legal code and computer code, with real-world, commercial consequences. It’s a movement that intrigues some of the biggest banks in the world,” he added.
Weng referred to L4 as “deep tech”, and it will be to contracts what SQL is to databases.
“Today’s approaches to writing contracts – whether English contracts written in Word, or Ethereum contracts in Solidity – are dangerously low-level, and a breeding ground for bugs,” he said.
L4’s development comes in the wake of security risks that surfaced in the development of experimental smart contracts in the blockchain economy. In June, US$100 million worth of the Ether cryptocurrency was put at risk when a security flaw in an experimental smart contract was discovered and exploited by an anonymous attacker.
In layman’s terms, blockchain technology enables people to sign contracts electronically — without the requirement of a trusted third party (such as a government or a lawyer or a bank) to verify the contract as valid and legal.
“Lawyers’ toolkits haven’t really changed since the 1980s. Corporations and banks are already experimenting with the blockchain to bypass the existing financial system — how much longer will clients be willing to pay $500/hour for associates to customise a template? Lawyers justify their price tag by talking about the years they spent in law school and in practice,” said Alexis Chun, co-founder at Legalese, in an official press statement.
Legalese was spun out of JFDI.Asia, Southeast Asia’s first startup accelerator, in 2015, and is currently based in Singapore. The startup has recently been granted US$8,888 by String Labs to fund the development of L4.
The company plans to develop a suite of SaaS applications aimed at tech-savvy end-users. The flagship app, which helps entrepreneurs configure and produce all the paperwork for an angel or seed round, has already processed over US$1 million in deal volume to date.