Legal Matters

3 months ago . 5 min read
EC
Ester Christine Natalia
Senior Writer at Forbes Indonesia
Legal Matters
Rieke Caroline. (Photo by Agoes Rudianto for Forbes Indonesia)

A sales and marketing strategy is a focal point when one plans to run a business. However, entrepreneurs should also include proper legal representation in their priority list so they can avoid financial losses caused by any legal problems. Unfortunately, legal terms and systems tend to be complicated, especially for entrepreneurs who are just starting their small and medium enterprises (SMEs) and startups.

Indonesia Investment Coordinating Board (BKPM) data show that as many as 2,017 startups had been established as of February this year. The country was also home to 62.92 million SMEs, according to Cooperatives and SMEs Ministry data in 2017. Those numbers are rising and appear as a major opportunity to 30-year-old Rieke Caroline. She seized the opportunities of flourishing technology by founding PT Legal Tekno Digital, a startup that provides legal services through a digital platform, in March 2016. Her goal is to make legal services easier to access and less complicated for entrepreneurs, especially newcomers, through utilizing technology.

With capital of less than Rp 100 million from her own savings, Rieke developed a platform named Buat Kontrak (later rebranded as Kontrak Hukum) that offers a package of up to 10 draft contracts for small and medium enterprises (SMEs) and startups. The platform works as a connector between client and selected lawyer, as well as a referee in overseeing the legal drafting process. And the entire process is quick, she claims the company can deliver the first draft of a contract within three days. During the initial phase of the business, she carried out the administrative, sales and marketing tasks all by herself, while partnering with three lawyers using a project-based payment system. To her surprise, the company received orders for at least contract-drafting packages within the first month of operation.

“From that point, I understood that there was a market demand for legal services, which could not be served by conventional law firms,” she says.

Helping others cope with legal matters was Rieke’s dream since she was young, which was triggered by a bitter experience in her childhood. Her family went through a relatively difficult time after her father’s automotive business turned sour because an important business contract was annulled unilaterally. That unfortunate event led her to gradually develop a curiosity and passion for legal matters. She studied law for her undergraduate degree at Pelita Harapan University and continued her master’s degree in law (notary) at the University of Indonesia.

Yet, Rieke did not start her career working in the legal sector. Instead, she worked as a news anchor at Metro TV for five years, which enabled her to interview numerous prominent figures like Steve Forbes and William Tanuwijaya of Tokopedia. Working as a journalist did not mean she forgot her passion for legal matters. In fact, the combination of having a knowledge of the law and experience in exploring business issues made her realize that the old-fashioned, niche legal sector had not yet been disrupted by digitalization. The discovery led her to decide to resign from journalism to focus on growing her own business.

In mid 2017, the company rebranded the platform as Kontrak Hukum given that it had expanded into, among other services, bilingual contract drafting, entity setup and intellectual property (IP) rights registration. The fees range from Rp 1 million to Rp 22.5 million for contract drafting, Rp 7 million for entity setup and Rp 1.5 million for IP rights registration. The company’s decision to expand its service was supported by Martin Hartono’s GDP Venture, which also saw a bigger business opportunity. Kontrak Hukum was connected to GDP when it approached human resource solution Catapa, a subsidiary of GDP, for a business partnership. It took about a year for Kontrak Hukum to test the market and develop its platform and business model before going back to GDP. Eventually, the company received an unspecified strategic investment from GDP through Kaskus. Kontrak Hukum keeps its eye on SMEs and startups as its main target market.

“We see that no one cares about SMEs and startups in terms of legal issues because they stand on many grey areas, whereas they have legal-assistance needs and are often clueless in legal matters. There are many startups that have good products and unicorn-potential business ideas, but they don’t do it right. I think if we grow with startups, they will always remember and stick with us once they have become established,” she explains.

As of February, Kontrak Hukum provided legal services to 866 companies, almost double last year’s achievement of 459 companies. The clients are spread throughout Jakarta and across Indonesia in places like Yogyakarta, Surabaya, Bali, Medan and Papua - currently the company has representative offices in Bali and Surabaya. It also receives orders from overseas clients in countries such as Singapore, Hong Kong, Belgium and the United States. Kontrak Hukum partners with over 100 legal practitioners. The company shares the profits with proportions ranging from 50:50 to 30:70. The largest profits go to the legal professionals, depending on the utilization level of Kontrak Hukum’s platform. Looking at the number of clients, projects and service fees, Forbes Indonesia estimates Kontrak Hukum’s revenue is close to Rp 5 billion with profits of up to 40% from revenue. The company aims to have 1,300 clients and 2,000 projects in 2019. It will also launch two digital products on the platform this year, one of which will be online legal consultation.

However, Rieke admits that it is challenging to change people’s habit of meeting face-to-face to using a digital platform. Currently, up to 20% of Kontrak Hukum’s clients still demand a face-to-face meeting with legal practitioners, but the company plans to reduce this figure to around 2%-4% by directing all processes to the platform. Another challenge is increasing businesses’ awareness about seeking legal assistance from the earliest stage. In an attempt to tackle this, Kontrak Hukum will launch a TV series discussing legal issues in partnership with Kaskus.

“It’s a never-ending challenge to change the culture of seeking legal assistance once a problem arises. The law should be anyone’s best friend if they want to be comfortable in doing business,” Rieke says.

EC
Written By
Ester Christine Natalia
Senior Writer at Forbes Indonesia
Topics
Entrepreneurs