The XS2Justice Foundation model for growth
XS2Justice Network has operated for ten years in the Dutch market, growing into a network of 30 legal professionals and learning many lessons in the process. Based on this experience, the XS2Justice Foundation was founded in 2010 to develop a special business model for third world countries and an instrument to finance legal services for the poor.
For the proposed expansion, the XS2Justice Foundation will license out the model to an international arm (XS2Justice Network International) which will serve as the franchisor, providing the necessary support and training services, and licensing qualified Master Franchisees in selected developing markets—in particular Africa. The Unit Franchisees in this model will generally be paralegals at the local level. The XS2Justice Foundation has stipulated that 10% of all Master Franchise income will be donated to the Foundation’s Fund as part of the license agreement. The aim is to let the Fund and the number of countries grow so more people can profit from the service. The money in the Fund will be used to back up loans from MFI’s to franchisees and clients and to back up bank loans for further expansion. As means permit, the Fund will also be used to support NGO’s in the local justice sector and to fund research.
Our business model for better access to justice
Mobile telephones are becoming ubiquitous in Africa, though they are typically run with pre-paid cards which can be purchased from various mobile network operators. These operators therefore seek incentives to drive traffic to their products, in particular, value-adding services. The XS2Justice Foundation has held exploratory discussions with two such operators and found a high interest in promoting XS2Justice Network services to would-be mobile phone card subscribers.
Subscribers will receive a limited access (one legal question per card) free with the purchase of a pre-paid card for mobile telephone service. The local XS2Justice Network Unit Franchisees (paralegals) will field these calls, as they do today in our Dutch operation, answering simple questions immediately and identifying potentially legitimate cases. In these instances, the consumer will be invited to take out a small loan offered through a local micro-finance institution (MFI) against the proceeds of an eventual out of court settlement. This helps to insure that the XS2Justice Network concerns itself only with serious as opposed to spurious cases. The paralegals then enter into a short fact finding period, potentially involving local universities and law faculties, followed by an attempt to reach an out of court settlement.
XS2Justice Network’s worldwide lawyer contacts can be seen in this context as a heavy inducement for the defendant to settle out of court. In the event of an out of court settlement, then the proceeds pay the local legal counsel’s fees, provide revenue to the Master and Unit Franchisees, cover royalties to the XS2Justice Network International and XS2Justice Foundation, and, of course, repay the outstanding consumer loan balance. It is certainly envisioned that most cases will be settled out of court. In the Dutch pilot, more than 95% are settled out of court.
In the event of a court case, XS2Justice Network utilizes its tendering capabilities to find the least expensive and therefore most experienced local lawyer to represent the plaintiff. The court case is funded via a crowd funding mechanism run by XS2Justice Network International which utilizes lawyers in the developed world who contribute a nominal sum each and are then promoted by XS2Justice Network International to their own customers as having made a socially responsible contribution to promoting access to justice—public relations on the one hand, but also good advertising to stay ‘top of mind’ on the other.
In this way, justice is served, consumers, employees and small entrepreneurs are empowered, local law firms grow their competencies in defending consumers, micro-finance services expand local credit facilities, developed world law firms can promote their good works modestly while funding legitimate court cases, and the XS2Justice Foundation receives further funding to grow and expand the model.