Change is coming, and it’s best to embrace it sooner rather than later.
Where should justice innovators look for inspiration in South Africa? One place to start would be the financial services sector. It’s full of examples of creative thinking, innovative technology and how to be locally-specific and world-beating at the same time. Our banks are constantly finding new ways to address profitable but previously unserved markets: in 2013, 67% of South Africans used formal banking services. By the end of 2017, that number had risen to 77%.
Before he left to work for the mobile network MTN, the erstwhile Absa CEO for Corporate and Investment Banking, Stephen van Coller, was a regular speaker on the conference circuit for digital innovation and fintech events.
The common theme of his talks was “disrupt yourself”: African banks, he argued, were used to eye-watering profit margins of 50% or more, but in the digital age, the cost of transacting approaches zero, which means those margins stop looking like a good business model and more like an enormous opportunity for new competitors.
Those competitors are prepared to accept lower returns (and still make a good living), and they have lower overheads too since they don’t have a legacy network of branches and technology to support.
South African banks understood the threat that was coming and worked hard to foster internal innovations and develop partnerships with the upstart fintechs. There’s a reason that no mobile network has managed to make effective inroads into financial services here as they have elsewhere on the continent.
Now it’s time for the legal community to take heed as well.
The Case for Disruption
“Lawtech” isn’t quite as mature or disruptive as “fintech” yet, but there’s plenty of people looking at it as an opportunity and are ready to strike at the heart of billable hours soon. Just like the cost of moving money around five years ago, today’s legal fees contain a lot of processes that can be done more efficiently and still generate profit.
Breakthrough technologies like AI and blockchain are reaching levels of maturity similar to mobile phone at the time of the mighty M-PESA’s launch (which, lest we forget, predated iPhone by a couple of months), but even more worrying is that legal services across Africa have barely begun to adopt the kinds of simple innovations which are common elsewhere in the world. House buyers in the US, Europe and Asia, for example, take one-click conveyancing for a couple of thousand rand for granted – after all, they’ve been doing it for a decade and a half.
The fact is that the current system is fundamentally broken and needs dramatic new thinking. We have a surfeit of trained lawyers, but a huge deficit in access to justice – a situation which simply does not make sense.
The real benefit of justice sector innovation in South Africa will be social impact. Right now, South Africa has a two tier legal model. Part of the reason the legal fraternity has staved off change for so long is that there’s a decent sized and moderately growing market in the middle-class and corporate worlds which is still prepared to pay for yesterday’s service at yesterday’s prices.
Those with access to this world enjoy the benefits of our well-respected courts and institutions, and our talented practitioners. The reality for most people in the country, however, is that we have roughly one tenth the number of practising lawyers per person as there are in the US, and the services that they provide are prohibitively expensive. That leads to an over-reliance on legal aid and pro-bono services and – as Legal Aid acknowledges – the gap between supply and demand in these stretched services is growing.
The effects of lack of access to justice are well documented: from miscarriages of justice to service delivery protests to interminable delays in land reform cases to poor protection of those vulnerable to gender-based violence – it’s a catalogue of everything that we know can and should be better in South Africa today.
What’s more, when there’s no effective access to justice – be that the rule of law or effective customary justice – civil society becomes heavily politicised and frustration leads to anger and violent protest.
We have to think bigger, and we have to think better. Where are the SMS or WhatsApp services that can reduce the cost of legal services to a fraction of the cost but scale to the moon? What social problems could we solve if they existed? How can we enhance the effectiveness of non-judicial systems that are the current sole recourse for many?
Just Copy the Banks
We have models for scalable, mobile services that extend the reach of professional services to those who have previously been denied access – and we have plenty of examples of how to do that it in a profitable manner.
We also know what happens when those opportunities exist and we choose to ignore them – just check the business press for the latest corporate dinosaur to be slain by an opportunistic rebel. How many referrals come to you via the Yellow Pages these days? The South African justice sector is ripe for and in desperate need of innovation and disruption, and if it doesn’t happen from within, there will be those who will do it from without.
And they will take your billable hours, whether you like it or not.
About the Author: Adam Oxford is an Agent for The Hague Institute for Innovation of Law (HiiL)
Adam Oxford has over 20 years’ experience as a writer in the field of emerging technology. He currently works with The Hague Institute for Innovation of Law (HiiL), helping to find and support entrepreneurs who are working to improve access to justice in Southern Africa. HiiL’s current Innovating Justice Challenge closes at the end of May: www.innovatingjustice.com