Opportunities in LawTech in Africa

Business leaders in South Africa might be feeling a bit depressed at the moment, but it does feel as though the startup ecosystem in South Africa is beginning to come of age – a decade’s worth of work all coming together to refine the models that work here.

And yet, there’s so much more to do.

We have strong stories to tell about fintech, insuretech, agritech, regtech and even some emerging ones in media: yet there’s one area which is being almost entirely overlooked, despite the opportunity it presents. People are crying out for high quality legal services and access to justice at an affordable price, and facing daily battles with a system that is stuck in a legacy mindset that is resistant to change, but ripe for disruption.

Sound familiar?

Africa emerged as a fintech leader because in the modern world it’s more or less impossible to function without some way of being able to transfer money electronically. Whether it’s receiving wages, sending remittances or building savings, in hindsight the gap between the banked and unbanked – and its implications for quality of life – was a vacuum waiting to filled.

There is a similar gap now that needs filling in justice services. Big law firms and the formal legal infrastructure are dinosaurs when it comes to service provision for end users. There’s some modernisation happening in the commercial sector, where big money clients are demanding it, but even services for the middle class (like house buying) are decades behind the ease of use and cost overseas.

If you’re poor and trying to formalise a business, sort out a tricky divorce or even looking to get a land claim processed, chances are you’ll either have to deal with hack attorneys or have to make do with whatever pro bono legal assistance is available.

That’s not to knock pro bono or paralegal services, they do amazing work. The problem here in South Africa is that instead of providing a stopgap measure for those in most need, they’re front line services for the majority, and the gap between justice need and service supply is growing, not closing.

Everything about the justice sector says that it is ripe for innovation, and full of opportunity for the right entrepreneurs and investors. Changes to the law, which are currently working their way through the system, are designed to encourage progress and overcome institutional resistance in a world where – so we’re told – senior partners still dictate correspondence and refuse to email.

Most of the lawyers I speak to, however, agree that the end is in sight for the “billable hours” model. Just as the banks had to learn that historical high margin services were doomed to be destroyed by digital competition, so law firms will come to accept the inevitable.

But we have to speed the process up, for the sake of the people who need these services. We need unusual thinking people prepared to take on the challenge of building an ‘M-PESA for law’ — who can see highly scaleable business models providing low-revenue services. Services which will ultimately have as wide an impact on people’s lives as all of the fintechs put together – and can see that first mover advantage will be a key part of sustainability.

For full disclosure, I work for an international business accelerator in this field that supports for-profit and non-profit social entrepreneurs with access to justice solutions. But the opportunity is bigger than we are, and is still being grasped by very few on the ground. Over the last three years I’ve seen hundreds of applications for our programme, and worked with dozens of inspiring innovators, but even so we’ve only just scratched the surface of ideas that are viable, disruptive and address real needs.

What I’m convinced of, however, is that someone will strike it big with a ground-breaking new startup in the next 18 months. The challenge for wannabe entrepreneurs is, will it be you?

Adam Oxford is a freelance journalist with two decades of global experience in the tech sector. He is also a local representative for The Hague Institute for Innovation of Law (HiiL) and the Justice Accelerator.

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