Innovation in legal services – crowdfunding (first published on Law Society Gazette website)
30th September 2015
Crowdfunding platforms are helping to bridge the gap in public interest law. In this article, first published on the Law Society Gazette website in July 2015, Sue explores the emergence of philanthropic funding through platforms such as CrowdJustice.
I recently read a quote that ‘an award for innovation in the legal profession is like an award for the fastest snail’.
This is a little harsh, but to some extent I would agree. So-called new model ‘dispersed’ law firms, such as Setfords or Keystone, with lots of self-employed consultant lawyers have operated for years in many other sectors, particularly the creative industries. Interim providers such as Lawyers on Demand or Vario might just be called an ‘agency’ elsewhere. Even listing on the Stock Exchange was done by accountants back in 2002.
Recently, I have started to see some really fresh innovation coming into the legal profession that is really exciting in the way that it delivers benefits to clients too. One area of the profession that is crying out for help is that of public interest law. Given the government’s determination to meet its fiscal targets, it appears unlikely that the legal aid budget will grow again until that has been accomplished.
In May this year, a new source of philanthropic funding emerged in the UK with the launch of a crowdfunding platform called CrowdJustice. Similar donor sites have been operating in the US, such as CrowdDefend, Funded Justice and some generic crowdfunding sites have legal categories. There are also commercial sites arising such as LexShares and Invest4justice which promote a financial return for investors. Most recently in June, Lawfunder was launched by some students in Australia.
The CrowdJustice website is the brainchild of Julia Salasky, a non-practising solicitor whose experience includes working at the United Nations in Vienna and The Hague. At the time of writing this website had fully funded two projects to the tune of £5,000 and £6,000 respectively, the latter was raised in just four days to fund initial legal advice relating to state pension inequality for women born in the 1950s.
The concept works for a wide range of potential clients from an individual to a community group through to a national pressure group. Live projects which are part-funded include nearly £3,000 raised to help an elderly gentlemen fight for the right to care for his wife in a care home; nearly £15,000 to fight a property development in Chiswick; and nearly £3,000 to fund the analysis of cases of miscarriage of justice for the first Supreme Court case to consider the question of the harm the concept of joint enterprise causes secondary parties.
The website is very well thought out, and explains the legal issues in each case in a very straightforward and human way for donors with useful information, such as a timeline and videos or audio files from people involved.
At present, while the concept is still in the early stages, individuals must submit their case for acceptance. A key criteria is that a solicitor must have been instructed already. So far, all but one of the cases involve a traditional law firm, so this is creating new work that might otherwise have gone away unfunded.
It is important to note that it is up to the person setting up the page to promote the case and spread the word in order to obtain pledges. This is where law firm marketing departments have an opportunity to get involved in a way that help could be vital to ensuring a particular project is funded within the timeframe. Law firms should also make clear whether they are prepared to take work that is crowd-funded, and think about providing information on the service to clients who are not eligible for legal aid.
Clearly crowdfunding will work best where a case already has support, or the story is sufficiently newsworthy to generate outside interest. Having myself been involved in a village community campaign to oppose a planning application for wind turbines, this type of platform would have provided a convenient and efficient way to collect funds for legal advice, even saving the bother of setting up bank account.
I suspect philanthropic donors will enjoy helping in this way. It will enable them to direct their donations to the causes that are of personal interest and they will be able to see the outcome. They may go back and look for other similar cases to support, and this presents another opportunity for the law firm to generate an audience of regular supporters for certain types of cases
It also appears to be completely transparent, with CrowdJustice taking 5% and the credit card company charging 1.9%+20p. For those citizens with some disposable income and a commitment to access to justice, there is now an opportunity to plug some of the gap.
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