A showcase of revenue models deployed by justice innovations from 4 countries

The main theme of this year’s Innovating Justice Forum organized by HiiL (the Hague Institute for Innovation of Law) is to explore innovative financing models for justice. In one of the breakout sessions, “Explore the best innovations and ways to increase revenue”, HiiL has invited 4 entrepreneurs who were the former award winners of their Justice Accelerator Program to share their experience on how to effectively build revenue models to sustain and grow their innovations.

The breakout session in process (photo credit: HiiL)

Uitelkaar – Better divorce experience (The Netherlands)

Divorce often comes in unexpected circumstances which people are not indeed well prepared for it. Sometimes, even though the plan for the “life after” is well thought out, the legal process, which most couples do not have an adequate understanding about, can cause enormous stress and drain every last ounce of positive energy out of them.

Uitelkaar is an online platform that provides all the crucial information related to divorce, for instance housing arrangements and child custody, as well as step-by-step customized guidance of the separation process in order to empower couples to take control of their divorce agreements themselves and get a better outcome.

The key revenue stream of Uitelkaar is the case fees paid by couples using their online service and case fee varies depending on the complexity of the case and the level of involvement and intervention needed from Uitelkaar’s side. The Netherlands government also provides legal aid to those less well-off. If a user is qualified for legal aid, Uitelkaar would charge as low as 36 Euro for the entire separation process with the rest claimed directly from the corresponding public agency.

While operation costs of the platform is in general covered by the case fees, initial investments, such as online platform development, is secured through social impact investors instead. Social investors have been targeted for fund raising in Uitelkaar’s case since they understand better and more importantly value the social impacts created by the platform which helped them avoid major mission drift and enable them to keep their service accessible to all.

Haqdarshak – showing civilians their rights (India)

In India, there are a myriad of public welfare schemes available for its citizens. Yet many are not fully utilized due to a lack of awareness and access to information among the general public.

Haqdarshak, with “Haq” meaning “right” and Darshak meaning “show the path”, is an online platform that tries to bridge the gap by connecting citizens with their eligible welfare schemes. It uses technology to match citizen profile with scheme eligibility to determine a customized list of eligible schemes. Citizens would then be further supported in applying for the schemes.

Haqdarshak has two implementation models. In the first model, it is implemented on a project basis supported by the sponsorship of the partner organization. The partner organization would select specific geographies where Haqdarshak would work directly with the communities in there. Representatives from the community, preferably women since they usually lack employment opportunities, would be selected and hired as “Haqdarshaks”, who would be trained and serve as Haqdarshak’s local agents to support families in their communities to screen and apply for welfare schemes. The Haqdarshaks would receive a monthly stipend and are usually employed on a contractual basis for 6 to 12 months. Apart from connecting citizens with welfare schemes, this model creates additional impacts by generating employment and improving livelihood at the local level, especially in the rural and remote areas.

The second model is relatively straightforward where Haqdarshak works with corporations in the manufacturing or construction sector that have a large captive labour force and support their workforce in applying for welfare schemes. Companies using Haqdarshak’s service would pay a fixed amount per worker. Employers benefit by having increased employee loyalty as well as lowered risks in unexpected spending such as emergency health care. On the flip side, blue-collar workers are often non-payroll employees who are not registered under the social security system. Hence Haqdarshak helps provide a better social and financial protection to this group.

So far, the latter is contributing to over 90% of Haqdarshak’s total revenue and Haqdarshak is planning to scale by partnering up with more large local corporations or even multi-national companies that have factories or plantations in India. Besides, in order to achieve the goal in reaching 10 million citizens by 2025, Haqdarshak has also been actively reaching out to local partners to develop contents in local languages as well as increasing hiring of local women as “Haqdarshaks”.

Aniket Doegar, the co-founder & CEO of Haqdarshak (Photo credit: HiiL)

LawPadi – the most comprehensive legal knowledge platform in Nigeria (Nigeria)

LawPadi was set up with the vision to educate Nigerians about their rights and duties in order to empower them with the capacity to make informed legal decisions.

The evolution of LawPadi is summarized as “CAROT”, which is explained as follows.

Content – Legal information is made available through lawpadi.com, a free online platform, in various formats, including easy-to-digest articles, explainer videos, infographics and so on.

AI/Automation – Several chatbots have been built to support users on specific legal issues such as divorce and business registration and operation. There are also automated templates which assist users in preparing legal documents.

Referrals – In case users require in-depth consultation with legal experts or service by lawyers, LawPadi is ready to connect them with its legal partners to take on the cases.

Offline – For the lower income groups that may not have ready access to the Internet or are not tech-savvy, LawPadi sends out trained agents and mediators who are supported by LawPadi’s online resources to help solve justice problems.

Training online – online courses are created to educate citizens further on common legal issues, such as civic rights, consumer rights, sexual harassment, domestic violence and so on as preventive measures to avoid disputes. On the other hand, LawPadi is planning to launch compliance training for corporations such as data protection, cyber security and marketing.

LawPadi adopts a Freemium model which keeps some of the basic services free of charge in order to increase the accessibility to justice, especially among the disadvantaged groups.

Currently, online contents that are mainly for the purpose of knowledge dissemination are free of charge. Users may also seek preliminary consultation for their cases for free through lawpadi.com on condition that all questions have to be posted on the platform so that the information generated could be shared with a wider population. Furthermore, users may generate drafts of legal document using the free templates available on lawpadi.com.

The key revenue sources are the business registration service fees and referral fees. As LawPadi utitlizes technology to facilitate document automation and reduce costs, it is able to provide business registration service at a better rate than other existing service providers. As for referrals, with LawPadi’s free services, it had successfully attracted and accumulated considerable amount of users of which many of them proceeded to request for lawyer referrals from LawPadi. An administrative fee is charged for any case connected.

In order to expand its user and customer base, LawPadi is planning to collaborate with universities to get law students as paralegals to reach out to remote areas to support people with justice issues and help them access LawPadi’s platform and resources. In return, LawPadi and the law schools would give academic credits as an incentive to the students. Be leveraging on the universities network, LawPadi is expected to scale nationwide in a much faster pace.

Tunde Ibidapo-Obe, the founder of LawPadi (Photo credit: HiiL)

AXDRAFT – Legal documents automation (Ukraine)

AXDRAFT specializes in producing quality legal documents through automation and their mission is to support corporate customers to improve their efficiency in managing documents.

AXDRAFT has a wide range of document templates available for subscription. They also provide template customization services to better cater to their customers’ needs. Furthermore, a one-stop document solution, including signing, storing and transfer, is provided which further facilitates businesses in managing contracts. So far 50 enterprise customers have already subscribed to AXDRAFT’s services.

Through the development of document templates for large corporations, AXDRAFT saw the applicability in smaller business as well. Thus, Avodocs (avodocs.com) was set up as a sister company to provide free legal document generation service for startups. Templates are partially adapted from those used by the large corporations and can be used free of charge. A fee will only be charged in case legal review by lawyer is requested.

Avodocs has partnered with incubators, accelerators as well as platform that support small businesses, such as Y-combinator, techstars, Amazon Web Services, to reach out to the startup communities. To date, approximately 4,000 SMEs have accessed Avodocs document generation services.

Oleg Zaremba, the founder & CTO of AXDRAFT (Photo credit: HiiL)

Key Learning

1. Partnership with government

Although none of the cases covered had provided products and services directly to public agencies so far, they have maintained close relationship or partnership with the government. For instance, Uitelkaar has been endorsed by the national government as one of the trusted service agencies in handling divorce cases, which raised users’ confidence in using their services. Referral from the government has been crucial in building trust for new solutions.

In addition, oftentimes public sector resources are under-utilized as the general public lack the information and means to claim their rights. Uitelkaar and Haqdarshak thus played the role as intermediaries to bridge the gap. By improving the system’s efficiency, new revenue opportunities may arise as new values are being created for one or more stakeholders.

B2G (Business-to-government) model is still one of the possible revenue sources for justice innovations. However, those who are considering the option should also assess whether they have enough working capital or cash flow to manage extended credit terms that usually accompany government contracts and whether they have enough capacity to mitigate risks associated with policy changes.

2. Impact data

Impact data, as cited by the entrepreneurs, was critical in attracting funding to their innovations. Such data provided evidence and substance to the organization’s theory of change, which made it compelling for funders, in particular social impact investors, to support their case.

Furthermore, by monitoring beneficiaries, it provided valuable insights on the effectiveness of their work and helped identify areas for improvement.

3. Freemium model

The Freemium model may be one of the revenue solutions for justice innovations, especially those who target the lower-income groups. LawPadi and Avodocs have been adamant in keeping some of their basic services free in order to maintain accessibility.

Another upside of Freemium is that it helps attract people to the platform which they could later on convert into customers. According to LawPadi, a broad user base has been helpful in generating useful data and insights which guided them in developing new services.

Yet, the entrepreneurs noted that costs should be carefully monitored in which costs allocated to the free-of-charge part of the business model should be kept to a minimum so that the organization still have enough capacity to grow the revenue-generating part.