Those seeking to secure funding for justice tech ventures have various ways to accomplish this, even during more challenging economic times
In times of economic uncertainty, low-income individuals often face increased legal challenges as they navigate job loss, access to benefits, housing stability, and more. While technological initiatives to address these issues become even more essential during economic downturns, funding for these activities becomes scarcer.
As entrepreneurs consider how to best sustain new justice tech projects, we examine four proven models: non-profit organizations, for-profit ventures, fellowship programs, and law firm subsidiaries, and suggest ways to make each of them successful.
The non-profit model is a natural fit for justice tech organizations because of its focus on impact over revenue. This model also aligns well with the goals of many foundations that donate to justice-related causes, and the established processes for applying to such funding opportunities can provide a clear roadmap for new founders. As a result, getting started with a non-profit may be easier than with other structures.
For example, Upsolve and ImmigrationHelp are two newer justice tech non-profits — Upsolve helps individuals file for Chapter 7 bankruptcy; and ImmigrationHelp helps immigrants file for programs that allow foreign citizens to temporarily live and work in the U.S, such as DACA and TPS, all for free.
Jonathan Petts, co-founder of both organizations, explains that he decided to create non-profits “because we wanted to focus exclusively on impact — helping the most low-income Americans get out of poverty by accessing their legal rights. Venture capital introduces a new motivation — profit — that can distract from scaling impact.” The organizations’ backers include the Legal Services Corporation, the Robin Hood Foundation, and the Stand Together Trust.
In our new column, NextGen Justice Tech, by Kristen Sonday, we will take a look at the people, trends, and technology shaping the future of access to justice.
“We approached our funders by warm introductions from mutual friends,” Petts says. “At the end of the day, people fund people. So, it’s all about building relationships.” And because non-profit funders will often tie their grants to very specific programs or product outcomes, often over limited time horizons, articulating return on impact and relevance to urgent legal issues is essential to securing recurring funding, he adds.
In order to achieve sustainability without relying on grant funding, a founder might want to pursue a for-profit model. Companies that raise capital from funds or angel investors can quickly and efficiently scale their businesses; and by tying revenue to client value, they can reinvest funds into their most impactful products.
For example, Rasa is a new justice tech company whose mission is to make the process of clearing a criminal record simple and affordable. “One-in-three Americans have a criminal record, and to tackle it properly and at scale, I quickly learned that I would need high quality tech talent and access to capital,” explains Noella Sudbury, CEO of Rasa, adding that she chose a for-profit model because she “felt limited by the structure of non-profits and inflexibility of grants. In addition, tech is a competitive field, and I also found it hard to find high-quality tech talent willing to work for a non-profit salary.”
Another justice tech for-profit, Formally, founded by Amelie Vavrovsky, helps people navigate immigration processes. In addition to scalability, Vavrovsky explains that she chose a for-profit model because “it’s important for me to create rights-based relationships with our customers, even those who don’t directly pay us. I have noticed that non-profits have beneficiaries, whereas companies have customers — which is inherently a different power dynamic.”
Vavrovsky adds that at Formally, the company treats everyone as a customer. “When something on our platform does not work for them, they let us know and we fix it,” she explains. “Establishing a rights-based relationship with our customers allows us to iterate quickly and build something truly valuable.”
While venture capital funding can be limited during economic downturns, justice tech is gaining recognition as an investment category, making it an opportune time to approach investors. However, funds will expect a financial return on their investment, so it’s important to have a sound business model, growth plan, and team in place so you can demonstrate a path to success, despite economic conditions.
Another way to minimize the risk of a justice tech project is to choose a fellowship model like the Judicial Innovation Fellowship, which is described as a “pipeline that brings experienced technologists, designers, data scientists, and product managers to state, local, territorial, and tribal courts to innovate justice in America.” Co-founded by legal technologist Jason Tashea, the organization’s Fellows work with courts for a limited time to build scalable, replicable, and open-source projects that increase court transparency, efficiency, and equity. And because one of Tashea’s co-founders is Tanina Rostain, a professor at Georgetown Law, they were able to house the program within the school’s Institute for Technology Law & Policy.
“Fellowships provide this perfect opportunity to inject new talent and perspective into organizations that are hungry for it,” says Tashea. “We’ve seen this model successfully deployed in executive and legislative branches in the U.S., but never the courts. Suffering from the same problems legislative and executive branch offices experience — short staffs and budgets, not to mention legacy technical systems — the courts are primed to benefit from the infusion of technical talent and support in the same way.”
While Fellowships are often structured as non-profits and do compete for funding from similar grantors, their connection to a host organization can be appealing as an impact multiplier.
Law firm subsidiaries
Finally, a rarer justice tech structure is a law firm subsidiary, such as Wilson Sonsini’s SixFifty. Its founders, Kimball Parker and Marie Kulbeth, started LawX in 2017 as a legal design lab at Brigham Young University Law to build software tools for individuals who couldn’t afford attorneys. The LawX lab focused on creating a tech solution for debt collection in Utah, a common issue. The resulting tool, SoloSuit, was highly successful and attracted national media attention, ultimately leading to an invitation from Wilson Sonsini to create SixFifty, a technology subsidiary. SixFifty’s mission is to make the law affordable and easily accessible for individuals, and it offers top-tier automated legal documents to businesses on a subscription basis, while providing free legal help to people in need through its pro bono tools for issues such as housing, debt, immigration, estate planning, name changes, and gender marker corrections.
When deciding on a structure for a new justice tech organization, it’s important to consider trade-offs related to funding access, practical business and impact models, and how the founders think about long-term sustainability.
“Not all companies are a good fit for VC funding, but it makes sense if you’re trying to build something truly scalable, quickly — and that’s why it was a good fit for us,” says Vavrovsky. “As with everything, there are trade-offs. This is why it’s especially important for founders to carefully select their partners.”