WODC report: greater scope needed for innovative business structures in the legal profession to improve access to justice

Professors Christiaan Stokkermans (project lead, Company Law) and Xandra Kramer (Civil Law) of Erasmus School of Law conducted the research underpinning the WODC report, in collaboration with researchers from the research firm Pro Facto in Groningen: Heinrich Winter (director, and Professor of Public Administration at the University of Groningen), Erwin Krol and Ernst van Bergen.

According to the research, the accessibility of legal services in the Netherlands is under pressure, particularly for people on low- and middle incomes and for smaller businesses. They frequently encounter obstacles in the form of high costs, limited availability of legal aid lawyers, and a supply of services that insufficiently meets their needs. The research builds on a 2023 WODC report on alternative business structures in the legal profession, conducted by Christiaan Stokkermans and Annie de Roo of Erasmus School of Law. The earlier report focused primarily on the regulatory frameworks of a number of other countries in the field of legal services, as a source of inspiration for the reforms needed in the Netherlands.

Current rules impede innovation

The researchers argue that the existing regulatory framework for law firms is primarily oriented towards safeguarding the independence of individual lawyers. Whilst that core value remains essential, they contend that the system also acts as an obstacle to innovative business structures within the legal profession that would contribute to sound administration of justice. New practice structures, such as collaboration with other disciplines, alternative business models, or external capital investment, are consequently afforded little room, despite their potential to contribute to affordable and accessible legal services.

A clear societal need

The research demonstrates that there is a clear societal need for innovative business structures. These could help to make legal services less costly and more accessible, better attuned to the needs of citizens and small and medium-sized enterprises, and conducive to new forms of collaboration. Legal aid practice in particular is under strain due to low remuneration and an outflow of lawyers, resulting in regional shortages.

Assessment framework and three-phase reform plan

The researchers set out an assessment framework and a phased action plan for determining which new business structures should be permitted. They present a concrete action plan in three phases. The first phase, to be completed by 2028 at the latest, focuses on expanding existing possibilities. For example, further developing in-house legal practice at claims management firms so that they may provide legal assistance to uninsured individuals, and creating greater scope for legal aid and franchise-style models. The second phase, with a horizon extending to 2030, examines more far-reaching innovations, including multidisciplinary collaboration and the possible deployment of external capital. The third phase, running through to 2032, addresses a fundamental overhaul of the sector's regulatory framework.

Independent body proposed

A notable recommendation put forward for the third phase is that the regulation of business structures should not rest exclusively with the legal profession itself. The researchers warn for the risk that the profession may be inclined to protect its own interests too heavily. They therefore advocate for an independent body to decide on the admission of new business structures, with explicit primacy given to broader societal needs.

Access to justice at the centre

The report aligns with the broader ambition of the Ministry of Justice and Security to improve access to justice. The core message: without modernisation of the legal profession, a growing number of Dutch citizens risks being left out.