I'm the lead developer at Contractually (a Vancouver-based startup): http://www.contractual.ly. We take contracts out of Microsoft Word and email and put them in an online format that understands the business data and process that is involved. We're solving problems form the low level (version tracking, redlining, commenting) to the high level (renewal reminders, workflows, tagging, reporting). We're currently focussed on large businesses and enterprise.

To answer your question, there's not many startups in the legal space because people and businesses are really worried about their contracts. The conservative nature is one that needs to slowly be eroded, and that's where we're at now. E-signature providers have taken away a lot of concerns and we're starting to see opportunities in areas outside of just signing.

At Contractually, we're seeing more competition (a good thing, of course) targeting small businesses right up to enterprise. Typically, they solve some small part of the contracts problem: Assembling documents, or e-signatures, or workflows, etc. The competition isn't just coming from startups (e.g. glider.com, acquired last year), it's also coming from large incumbents (e.g. Merrill DataSite for contract management, launched last month).

It's an exciting time and I think we'll start to see big chunks of the problem solved over the next few years.