Abstract: On October 14, 2017, “New Intelligence·New Brand·New Alliance——2017 2^nd China Emerging Legal Service Industry Forum” was successfully held in Shanghai. In the meeting, the first legal service industry investment fund (under preparation) in China were established by Green Legal Global Alliance, ECUPL China Legal Service Industry Research Center and lvxinnews. Liu Guangchao, Secretary General of Green Legal Global Alliance and Director of Beijing DOCVIT Law Firm, was invited to attend the Forum and delivered a wonderful speech of How Investors Treat the Start-up of Legal Service Industry. The following is summarized according to the speech of Secretary General Liu on the forum with slight adjustments.

I’m a practicing lawyer, but another identity of mine is Secretary General of Green Legal Global Alliance. Next, I want to share several issues with you from the perspective of investors or how the legal persons hope the investors treat the legal service industry.

First, what is the legal service industry? Many persons have their understanding, but they may be hard to tell, including myself. Where is its boundary? How big is it? How to define it? What is the industrial logic……These are fundamental issues to be solved by us, and may be considered from the following dimensions:

First, what are the service objects of this industry? I think, in addition to those requiring legal service, the organizations even individuals providing legal service are also one of the objects. Certainly, this “Legal Service” might be in a broad sense, including some frontier and crossing legal service types.

Second, in which form does it exist? The form of legal service has experienced a process from individual to workshop, enterprise and even industry. The final form must be a community formed by various industrial patterns. The whole legal service industry ecology might contain five patterns: service, technology, platform, investment and production.

Third, how is the whole industrial chain? From the perspective of the whole industrial chain, it may determine the position of an enterprise or organization in this industry as follows: some enterprises or organizations are at the fore end of this industry, such as production or R&D, and some are at the market or service end, and some are at the rear end, like investment and management.

Fourth, what are the core elements of industry? They may be summarized as follows:

legal service

The combination of legal service and other service

The combination of legal service and technology

The combination of legal service and finance

This is also a kind of classification of the major industrial patterns. It is just these patterns of different dimensions that form such a three-dimensional and networked industry.

Objectively, current legal service industry is not mature in terms of scale, quality and order. China has over 30,000 law firms and 300,000 lawyers, but the legal service output value is only RMB 70billion. Why? I think it is because the lack of two things.

One, it is lack of the entrepreneur spirit. Different from professional service providers, technological providers and investors, an entrepreneur has two important features: creating value and innovation. If an entrepreneur has no such spirit, he is unworthy of the name of “entrepreneur”. So many persons running enterprises but they are not entrepreneurs.

Why can some friends here be recognized by this industry and investment circle? It is because they are doing things that entrepreneurs will do. They are creating a kind of mode or some value, and are truly doing industrial innovation.

But the legal service industry is often contained by the professionalism, and always thinks the market, management, investment and other issues by using technology, and is deficient at the level of the entrepreneur spirit.

Two, it is lack of the common understanding of investors. How investors view the legal service industry, determine its investment value and enlarge its value? I saw a data, till September this year, the investment in the legal service industry, including pan-legal industry, accounted for only 1.67% of total investment, a quite small ratio. It indicates that people needs a process to recognize this industry, and there are some restrictive provisions in the laws and regulations.

Then, whether the legal service industry is worthy of investment, and are there one or multiple funds specifically invested in the legal service industry? What roles does investment play in it?

I think it has at least four roles. First, it might give birth to more entrepreneurs of this industry. Since many start-up modes in the legal service industry are spontaneous and random, unlike the investment community so constrained; if there is investment, the operation modes of plenty of enterprises would change, and would truly achieve enterprisization.

Second, investment may accelerate the development and integration of this industry. According to my initial statistics, there are not less than 500 Internet+law companies and institutions now. Whether they all have the value of existence? There is no market to determine or test since no investor does evaluation. Once there is investment, these enterprises will determine the modes and value, which might push the development of this industry.

Third, the intervention of funds might enlarge the industrial boundary and content, and might let it truly have the industrial logic. At present, as compared with some relatively matured market, developed countries and regions, China’s legal service industry still has a big gap, and its boundary is small and relatively blurred.

Fourth, the integration with other industries lets the legal service products be able to dialog with other industries. Now, a lot of people don’t accept the legal service industry. But, with the input of investment, they would do the integration of resources, would consider the grafting of the whole market, even some buffer space between industries. If an industry has the concept of investment and can ascend to the integration of production and finance from enterprises, it is mature.

As the first domestic cross-border alliance centering on law, Green Legal Global Alliance will continuously promote the integrated development of law and other social industries during its operation, It will also explore and stimulate the release of huge energy of law in cross-border and build a green three-dimensional legal ecosphere by pooling the efforts of the whole industry. The first legal service industry investment fund in China established today will provide guarantee for further development of vast excellent emerging legal service institutions in China and stimulate new dynamics for exploring the legal industry blue ocean at a deep level, boosting the industrial innovation and breakthrough and leading the new direction of China’s legal cause.