Bridging the digital funding gap

At the end of April, Gartner predicted that the value of the global legal technology market would reach $50bn by 2027 as a result of generative AI. But while law firms are more profitable than ever and lawtech AI start-ups and scale-ups are attracting seven-figure investments, funding for non-profit justice tech is drying up.

Numerous discussion forums and research findings have highlighted the need for more investment in access to justice (A2J) applications that help individuals and businesses access legal advice. Yet the vast majority of funding is still going to lawtech products for corporate law firms and their clients, and founders with a corporate legal background.

At LawtechUK’s Access to Justice event earlier this year, Maya Markovich, executive director at the Justice Technology Association in the US, said: ‘Those who are closest to the problem are closest to the solution, but are farthest from resources.’ And there is no sign of this changing, notwithstanding a few investments in consumer lawtech start-ups founded by former corporate lawyers.

Last month, Alex Charles, head of IT and data at the Law Centres Network (LCN), told the Tech for Good panel at Bristol+BathLegalTech’s WE R LegalTech Conference how a lack of funds for tech and digital resources was limiting the capacity of the LCN and the law centres it represents to help those who come to them for legal advice.

LCN is the national membership body for law centres with the remit of helping them set up and grow, and supporting their work. It coordinates collaboration between law centres so that they can work together on joint projects and share best practice, and amplifies their collective voice and profile. There are currently 42 law centres across the UK, serving upwards of 120,000 clients each year.

Julie Bishop, director of the LCN, explains that the funding gap is undermining the rollout of its digital programme, which is mostly focused on internal efficiency. She highlights three major projects. A national IT upgrade envisages replacing computer equipment and networks and transitioning all law centres to Microsoft 365 cloud computing. There is also a back-office project that leverages free software licences for charities, configuring the Salesforce Platform to track funding, office management, HR and contacts. This is being piloted in three law centres. Another project involves EnquiryDesk, a browser-based tool that is being piloted by the LCN and two law centres to manage enquiries across all channels, capturing critical data on need and demand. Additional funding is needed to develop the back-office system and EnquiryDesk and roll them out beyond their initial pilots.

Another ongoing initiative, funded by a grant from the Law Society, is improving LCN’s case management system and encouraging law centres to engage with it more actively. For example, increasing collaboration, and sharing templates and other resources.

The main problem is that with a few exceptions (notably the Law Society) investors are moving away from the charitable sector. Bishop says: ‘Five or six years ago, a lot of funders put money into digital projects for the not-for-profit sector, but now the funding is drying up. Digital development is costly in terms of skills, time and resources. And the fact that we are completely dependent on short-term funds is a big impediment to the extent that we can use digital tools and systems to deliver access to justice.

‘We had an excellent grant from the National Lottery Digital Fund, but that was a five-year programme and it was not renewed. The aim was to kickstart the work, which it did, but what happens next?’

‘This is not uncommon,’ observes Charles. ‘Investors want to put money into digital, but they are mostly only interested in funding things that are new and innovative, not capital infrastructure projects that need to be maintained and developed.’

Bishop recalls: ‘A few years ago we were generously funded by the Legal Education Foundation who paid for a modernised IT infrastructure for law centres.

‘But now we are on a different journey. We have a few excellent tools, including the Law Centre Members' platform that we are developing thanks to the Law Society. But we now need funds to take it to the next level. We know people will use it – they are desperate to use it – and it will assist other charities as well. So we need private funders to take a leap and partner with us. The difficulty is they need to make a profit.’

Developer challenge

LCN has developed successful partnership arrangements with big tech vendors, benefiting from Microsoft 365 non-profit offers and 10 free licences from Salesforce as part of its corporate responsibility programme. ‘But that is not available for everything, and as software has shifted to subscription models, the prices go up each year,’ observes Charles, adding, ‘we need to raise more funds to cover what used to be affordable. On our IT upgrade, we benefited from Dell’s 20% charities discount on new devices’.

Bishop explains that this was cheaper than using refurbished/donated hardware because of the risk and cost of equipment failure. ‘Dell has a return to base policy which means that if your laptop breaks down you get a new one,’ she says, adding that this is only possible for major upgrades, as you need the economies of scale to get the discounts.

Developing new tools and systems is another challenge, because of the cost and availability of developers. ‘While law firms are often willing to offer practical help as part of their social responsibility commitments, and we are grateful to Freshfields, A&O Shearman and Akin Gump among others, as well as the Legal Education Foundation and LexisNexis, for donations, skills/expertise and introductions, we struggle to get access to legal tech developers,’ Bishop says.

Where is the justice tech?

While this looks like a good opportunity for lawtech start-ups to get involved in justicetech, so far this has proved unworkable. Bishop explains: ‘A lot of funding is directed at start-ups, some of whom come to us with tools that they have developed that they think law centres would love. But the problem is that they don’t come to us until they have a finished product. It’s not that they don’t have good ideas – they do – but they need to monetise them, so they won’t talk to anyone until they have a product.’

Charles says: ‘It’s frustrating when you’re working close to the problems, understand them intrinsically and have a good idea of what would really work. Having involvement [from a legal tech developer] at an early stage to co-produce a solution would be so much better than having someone approach you with something that they have already made.’

In an ideal world, Charles would like to see more collaboration, and of course more investment. ‘I would like to see more funding available for capital infrastructure, so we wouldn’t be struggling to replenish our equipment,’ she says. ‘I would like to find a way for tech companies to understand our world, and our budgets better, as even discounted, their prices are more than charities are able to pay. And I would like more opportunities to bring together law firms and lawtech companies to solve problems together and help plug the gaps.’

Bishop emphasises that ultimately the problems that LCN and its members face are human ones. Many A2J tools do not reflect the complexity of the work, or distinguish between providing information and helping people, who are often in crisis, solve their legal problems. ‘Given our funding restrictions,’ she concludes, ‘we have focused our digital programme on making our organisations more efficient so that our lawyers have more time to spend with the people who need them.’