A 600% increase in clients: Demand for legal startup Anika’s rent reduction tool skyrockets in face of COVID-19

Anika Legal was progressing smoothly, with about five clients per week accessing its free online legal service, which connects law students with renters seeking advice for rental repairs.

Then COVID-19 struck and the “tenancy space was blown away by the pandemic”.

In response, co-founder and chief executive Noel Lim and the Anika Legal team spent about a fortnight building a new function, dubbed COVID-19 Rent Reduction Support, which provides assistance for tenants seeking a rent reduction.

As a result, Lim says Anika Legal has gone from five clients a week to five per day.

And that’s “without marketing as hard as we could have”.

“We envision the number of clients will skyrocket even further over the next couple of weeks,” Lim tells SmartCompany.

“The challenge is that we have this really great service but we need to figure out how to make renters aware of it, in order to help as many people as we can.”

Connecting those who need help with those who need training

Now a registered charity with partners including the City of Melbourne, the Moonee Valley Legal Service and Tenants Victoria, the idea for Anika Legal was formed by a team of six at a legal hackathon in 2018.

The team won the first two rounds before being flown to New York for the Global Legal Hackathon. After placing runners-up in the global final, Lim and his team were told “the idea had legs”, so they decided to “give it a crack”, he says.

“It’s the typical startup journey of having this idea but not having anything built under the hood,” Lim says.

“Over the next few years, we got together a team of volunteers, built the products and raised the funds [including a grant of almost $200,000 from the Victorian Government in 2018].

“Now we have a team of over 50 people with four paid employees,” Lim says.

The team initially flirted with the use of machine learning and blockchain technology to store the cases, however, they are now using “less complex technologies”.

“I wouldn’t consider [what we use] to be high-tech, but we are definitely effective in providing a legal service to people who are otherwise unable to access it,” he says.

“There are 490,000 people each year who don’t get the legal help they need. At the same time, countless law students are desperate for legal training.

“Anika connects people who need legal help, with those who want to help, and a practising lawyer checks the advice to make sure it’s all good.

“The vision is a world where everyone can access justice.”

“The messaging isn’t understood well by tenants”

Anika Legal has been responding to a wave of rental measures enacted by state and federal governments since the outbreak of COVID-19.

These include a six-month moratorium on commercial and residential evictions and a pause on rental increases in Victoria.

According to Lim, both the new and pre-existing residential tenancy laws are not well understood by renters and landlords alike.

“New public policies are not meant to be made that quickly, but I’m not passing judgments on the government as they had to be done,” Lim says.

“I think moratoriums on evictions are a good start in protecting the rights of tenants but if no new laws come out, we’re anticipating a huge wave of renters who will be evicted once the moratorium ends.

“How that debt will be recouped is largely unknown, and the consequences in six-months time will be immense,” he adds.

“The next few months will be challenging”

With the economy expected to recede by 10% over the first half of 2020, Lim says Anika Legal is seeking partnerships with other formal bodies in order to cope with an increase in demand for their service.

He adds that their partnership with Tenants Victoria may enable Anika to collaborate with “other players in this space” in the future, including Consumer Affairs Victoria.

They are also planning to shift their revenue stream from grants and fundraisers to a business model where “universities pay for the training we provide.”

“It’s realistic that we work with bigger organisations so we can go from five clients per day to five clients per hour,” Lim says.

“But we are uniquely placed to help lots of people as a virtual legal service, and our communications were remote prior to the pandemic.”

More broadly, Lim hopes that they will be able to expand their service to consumer and employment law in the future.

“These are pretty straight forward legal areas, but people would greatly benefit from our legal advice and assistance,” he says.

“We were also looking at other projects with different funding requirements, but they’ve been pushed to the back-burner with everything else going on.

“Simply put: our goal is to continue coping with the new demand post-COVID-19.”

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