Changing laws to make legal tech accessible to all
Traditional law services appear not only exclusive but also challenging to comprehend. It has been the customers’ responsibility to figure out what legal services they need and for what purposes. Traditional law firms have remained surprisingly stagnant during the digital revolution; so far digitality has been characterized merely as a tool for lawyers to increase their performance. In this blog article, Aku Pöllänen, CEO and co-founder of Aatos, provides his views and experiences on how legislation could improve the operating environment of startups.
Aatos is a Finnish startup reshaping the legal industry with fully automated legal services for consumers. We established the company in 2020 in Helsinki together with a group of close friends, who combine unique expertise in law, technology, and business. We currently operate in Finland, Sweden and Denmark.
Nowadays, solely combining legal expertise with technology isn't enough to change how legal matters are dealt with. Instead, we need to employ a more proactive and holistic approach. This means that we actively gain an understanding of the customers’ situation, provide them with tailored solutions, and aim to foresee issues before they become problems.
What makes Aatos a unique company is the way we combine innovatively expertise in law, technology, and user experience design. The approach is not only user-centric but also human-centric. We believe that in the future, digital law solutions will bring personal law assistance to everyone’s pocket. People will receive legal support that is both continuous and proactive – and cost-effective.
When discussing innovations, the conversation inevitably touches upon legislation and how it can enable innovations to become reality on a wide scale.
Legislation improving the business environment
Legislation can improve the environment that we, as a legal tech firm, are operating in two ways: 1.) by providing assets for recruitment, and 2.) by supporting digitality and innovation in public administration.
1.) Providing assets for recruitment
To grow as a company, we need to keep on attracting talents abroad – as do many other Finnish startups.
In Aatos, we consider employees as highly valued members of our team and skilled individuals. Therefore, we need to take into account the individual’s perspective in recruitment. Moving and settling in a foreign country requires quite a lot of effort from individuals, not to mention their families.
The same reasons why the candidates are not willing to move to Finland come up during the recruitment process. Based on those discussions, we have formulated four solutions on how legislation can improve recruitment abroad.
Four ways to improve recruitment from abroad:
- To support the families in moving as well as the spouse in getting a job in Finland.
- To ease legislation so that candidates can flexibly work within the EU.
- Augmented tax incentives for a longer period of time.
- To make dealing with practical things, such as opening a bank account, getting an electricity contract and a telephone subscription easier.
The biggest reason for candidates to turn down a job offer is the family. Even though we have affordable daycare, it often means more expensive private daycare for English-speaking families. For example, the municipality of Helsinki doesn’t provide any English-language daycare. Moreover, it is usually challenging to find a job for the spouse in Finland if they don’t work in the technological sector.
The salaries in Finland are not as competitive as in other countries because of the high living costs. Many countries, such as the Netherlands and Denmark, offer tax relief for a longer period of time. This not only brings additional incentives but also allows the new startups to compete with salaries.
Did you know that Denmark offers a special tax regime to highly paid talent recruited from abroad? Employees may elect to be taxed at a rate of 27 % on employment income and other cash allowances, for up to 7 years. The effect of the tax reduction was later examined in the research literature, which looked at the migration of people just below and just above the earnings limit. The test resulted in doubled immigration movements to Denmark over the next couple of years, by highly paid talent, such as researchers.
Tax reliefs are a proven way to enhance the attractiveness of countries as possible working environments. The Finnish Startup Community has promoted the benefit of so-called “tax carrots” (tax benefits) to attract talent to Finland. When companies invest, the biggest factor in terms of location is where skilled labor is available. Taxation would be one way to increase incentives.
Lastly, it requires a substantial amount of effort from the employee to get practical things sorted when all the official documents are either in Finnish or Swedish. It should be easier for a foreigner to deal with the basic contracts and to settle in Finland.
Many large corporations have internal processes for recruitment and settling. However, these issues are emphasized in small companies and especially in startups. It takes a leap of faith to relocate to a new country and start a position in a small company. Therefore, we need to create conditions that help both companies and employees. This can mean for example tax reliefs if startups hire young professionals from abroad.
2.) Supporting digitality and innovation in public administration
Public administration forms the backbone of our society and companies cannot exist apart from it. Legislation needs to ensure that public administrations keep up with digitalizing their processes. Most importantly, the key role of public administration is to enable rather than actively lead innovation.
Currently, the legislation doesn’t always make digital solutions available. For example, the majority of legal documents still require printing and handwriting signatures because the current legislation doesn’t allow e-signatures to be used.
Deploying digital ID in 2023 is great news already, which is a good example of how the legislation can support ongoing digital progress. By doing so, new ideas and solutions can flourish in our society when public administration already offers interfaces for companies like Aatos.
The future happens only after innovation is available in households. Therefore, innovations cannot thrive in a vacuum. The future of law requires changes in current legislation in order to happen in its full potential.
CEO & co-founder