New website lends legal helping hand to start-ups
Dragon Law provides access to documents at affordable cost and free database of information
A web service aims to help small businesses access legal documents more affordably, joining a growing number of start-ups in Hong Kong trying to make it easier for new businesses to thrive.
With basic legal documents costing upwards of HK$40,000 each, some business owners say they cannot afford to protect themselves from the legal risks of operating in the marketplace.
Launched on Thursday, the Dragon Law service provides customised legal documents from HK$100 each and a free database of legal information for entrepreneurs. It is powered by virtual data room technology, which allows companies to securely store and share legal documents, such as partnership agreements and employment contracts. The site can also be used to write personal wills.
Local start-ups say the service is a welcome addition to the expanding support network for new businesses in the city, which now also include options for shared work spaces and incubation programmes.
"It is still very hard in Hong Kong to convince law firms to defer payment on legal costs, so what a lot of entrepreneurs do is share the same legal documents. That, of course, puts us at risk because one document can't fit everyone's needs," said Jonathan Buford, founder of Makible, a company that ships 3-D printers.
The United States is at the forefront of technology services for start-ups, with various low-cost legal document builder websites available. British crowdfunding platform, Seedrs, recently became the first to operate across Europe, offering equity for investing in start-ups.
In Hong Kong, however, start-ups complain of significant barriers to entry.
"Not only is the cost of living very high, it is difficult to attract investors and law firms generally demand cash upfront. Especially for start-ups, whose businesses involve complicated financial transactions, the legal costs can be debilitating," said Asif Ghafoor, co-founder of Spacious, a website that helps users find homes in Hong Kong.
Lawyer Daniel Walker, who co-founded Dragon Law with Jacob Fisch, said: "It does not seem fair to us that small enterprises should suffer either high legal costs or not have protection because they are a segment of the market that law firms feel are insufficiently lucrative. We want to be part of the process in Hong Kong where legal services are democratised through technology."
In May, Hong Kong saw the launch of Colony88, the first online crowdfunding platform that helps entrepreneurs attract investors.
"Investors in Hong Kong tend to be more conservative but we've seen that people are starting to become tired of traditional avenues of investing," said Jono Lilley, co-founder of Colony88.
"Given that the start-up community here is very mutually supportive and given the cash pool in Asia, I can really see entrepreneurship taking off in Hong Kong again."