If technology is going be a prominent solution to help the 86% of low-income individuals who need legal help but never get it, then the legal industry needs to better support for-profit access to justice (ATJ) initiatives.
Currently, nonprofits, legal aid organizations, and funders like the Legal Services Corporation are the backbone of the access to justice ecosystem; their work is absolutely vital to helping those in need. Given how under-resourced and over-stretched these organizations are though, there’s limited room for them to develop their own tech or pursue innovation. If we’re serious about creating sustainable, modern, and network-effect driven technology, the legal industry must help ATJ entrepreneurs tackle barriers to entry and growth.
For-profit models have unique advantages in helping close the justice gap. First, because they are fueled by private investment and revenue, ATJ-driven companies are not competing with existing organizations for valuable (and limited) public interest funding. In turn, that investment and revenue must directly correlate with how many people they serve (and the value they add to their clients), which aligns business and community incentives. In order to stay competitive, these startups must hire top technical talent, iterate quickly, and collaborate with other systems through modern tech platforms.
Focus needed on ATJ technology
Despite these advantages, less than 5% of legal tech companies focus on ATJ technology, primarily due to the complexity of ATJ issues and a lack of capital and business models to support them. “There’s actually a ton of ATJ tech, but there aren’t more individual companies because everyone is still trying to figure out how to make money and sustain a company in this space,” says Nicole Bradick, Founder of Theory and Principle.
ATJ tech in general has a complicated history given the sheer number of parties and regulations involved that have shaped how justice is accessed. Aurora Martin, Founder of popUPjustice, explains that “the trajectory of innovation in ATJ has, in some ways, focused literally on access, and so the development of case management systems, centralized hotlines, forms, etc. has created challenges in resource management.”
ATJ issues are also inherently nuanced based on practice area, community served, and jurisdiction, which requires that entrepreneurs have a higher level of product awareness. “Access to the resources required to start a tech company is generally more available to those who are not likely to be familiar with the barriers that low-income folks face when seeking legal support,” says Gabriel Leader-Rose, Co-Founder of GoodCall. “In order to succeed, ATJ companies have to be designed with people in communities they aim to serve, not just for them.”
Employing public benefit corporations
Newer ATJ startups like Community.Lawyer and Paladin are taking a unique approach to funding by incorporating as public benefit corporations (PBCs) to combine the traditional startup model with their missions for good. “You can’t presume the commitment an organization has to social impact from its business model,” says Linda Tvurdy, Founder of DaisyDebt. “In other words, you can’t assume that all for-profits are only about generating revenue for themselves, any more than you can assume all non-profits are entirely mission-driven. You have to look at what the organization is doing and why.”
Even with a hybrid approach, traditional tech VCs haven’t exactly been viewing ATJ tech companies as the next startup unicorns. “There is a common misconception that ATJ tech solutions are not worth the investment dollars,” says Miguel Willis, Executive Director of ATJ Tech Fellows. “However, this couldn’t be farther from the truth.” The pattern is cyclical: if more ATJ startups can find profitable paths forward, the more investment they’ll receive to scale, and the greater impact they’ll have.
The good news is that between the influx of capital to newer PBCs and incubators like Blue Ridge Labs, we’re starting to see ATJ innovation focus on sustainable, independent solutions. Blue Ridge is unique in that it provides funding and resources to help launch platforms that address economic inequality. “Rather than choose existing projects, Blue Ridge chooses people” Tvurdy, a past Fellow, explains. “They recruit technology and subject-matter specialists around a particular problem and teach us how to understand and begin to solve problems in that space.”
With dedicated incubators, investment, and entrepreneurs, legal tech is now better poised than ever to tackle ATJ in a sustainable way. Felicity Conrad, Co-Founder of Paladin, notes that the industry should start “shifting our attitude from skepticism to curiosity and celebrating folks who take an innovative approach to solving ATJ issues, even if they don’t get it right every time.”
Recent developments have set an exciting precedent for new ATJ companies, and with the right support, they can be a game-changing force to help close the justice gap.