eLawyering Blog : Online Legal Services : DirectLaw : Document Automation, Web-Enabled Document Assembly, Virtual Lawyering

 

 

Lyceum Capital, a UK private equity firm, has announced a new $500 million Fund to target opportunities in the legal services industry made possible by reform of the UK's regulatory structure that governs the legal profession.   Richard Susskind  an independent adviser to law firms, in-house legal departments, and national governments has been appointed as a Special Advisor to the Fund.  Sussikind specializes in future trends in legal services and the impact of IT and is the author of the seminal book, The Future of Law: Facing the Challenges if Information Technology.

Described as the lawyers’ equivalent of the City’s Big Bang deregulation of 1986, the Legal Services Act will enable law firms to secure private or public investment and will permit non-lawyers to compete in the provision of legal services – together with or separately from legal professionals.  Research by Smith & Williamson published in November last year indicated that nearly a quarter of firms interviewed would be seeking external capital in the next five years, typically of up to £20 million each.  Most of those seeking capital were expected to be small to mid-sized firms and private equity was deemed a more popular source of finance than the public markets.  

Commenting on Lyceum’s expansion into the legal services sector, Managing Partner, Jeremy Hand, says: “The legal services market is large, fragmented and offers considerable potential for continued growth – all characteristics of the sectors in which Lyceum has been successful.  We anticipate consolidation of small and mid-sized legal services businesses and believe that, in spite of increased professionalisation of the legal industry in recent decades, many opportunities remain to improve service standards, efficiency and profitability.  Although the Act does not come into full force until 2011, now is the time to build the early businesses that will have first mover advantage when the Act’s changes come into effect in three years’ time.”

Professor Susskind says: "I believe that external investment in legal businesses will be vital in coming years, not least to support the development of modern systems and processes. I am very pleased to have this opportunity to advise on the most promising IT-related investment opportunities."

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The Irish Competition Authority (the equivalent of our Federal Trade Commission) says the market for legal services is permeated with unnecessary and disproportionate restrictions on competition and is in need of substantial reform. In a report published this week, the Irish Competition Authority recommends  new comprehensive legislation to address the lack of competition in the legal services industry in Ireland. The legislation would establish an independent Legal Services Commission with responsibility for regulating the legal profession and the market for legal services.  This new Commission would be independent, transparent and accountable, involving a wider group of stake holders that the current model of self-regulation. The Competition Authority says that all who have studied the legal profession have reached a similar conclusion -- that the legal profession needs to move towards a modern, transparent and accountable system. 

Perhaps the American legal profession could learn something from this report. Very few state bar associations have adopted recommended reforms to make the legal profession more accountable to the consumer. The US legal profession still operates like a closed guild subordinating the interests of the consumer, over the interests of the profession. It's time for a change. For a summary of this report, click here.

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I recently ran across another virtual law firm in Texas called Texas Law on  Demand .
The law firm is a solo practice run by the Patricia McCartney. Legal forms are offered with legal advice for a fixed fee. Fixed fees are reasonable. A Texas no-fault divorce costs $349.00 and includes a 20 minute phone consultation. Other transactions includes wills, powers of attorney, leases, deeds, and Protective Orders, and LLC formation. The service is designed for pro se litigants and the plaintiff is expected to file his or her own documents. We expect to see more virtual law firms like this in the future offering "unbundled legal services" over the Internet.

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The James E. Keane Memorai Award in Excellence in eLawyering has been award to the Illinois law firm of Cowell Taradash, P.C. for their web site IllinoisDivorce.com. This law firm offers a web-enabled document automation solution that enables pro-se litigants to generate their own divorce documents for $185.00. Wes Cowell, the Managing Partner, reports that that this service, together with an enhanced service where an attorney accompanys the client to a short hearing, which is priced at $500.00, generates about $100,000 in revenue for the firm. More importantly, this feature creates demand for a more full-service approach, as pro se litigants realize that sometimes their divorce is too complicated for a self-help approach. This demand generation feature has resulted in generating revenues in the 7 figure range for the firm that. The Guidelines for the James Keane Memorial Award in Excellence in eLawyering Award can be downloaded from the ABA Law Practice Management web site.

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http://www.illinoisdivorce.com is another web site that offers low cost no-fault divorce forms bundled with legal advice. Operated by the Chicago law firm of Cowell Taradash, P.C., this web site offers useful legal information on Illinois divorce issues, an offer of free consultation with an attorney by telephone, and an offer to answer simple legal questions on family law by email for free. The basic fee for an uncontested, self-help divorce is only $185.00.

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A new web site based in Florida: http://www.idivorce.com     offers a set of automated Florida divorce forms for free. The user scrolls through a set of friendly but numerous screens, and inserts their financial information and other information. Once completed, the forms are instantly available and can be printed out from the web browser. The generated forms are not in Adobe .PDF format, as distributed by the Florida Supreme Court, but they seem to meet all of the court requirements any way, so they should be accepted by Florida court clerks.

The interesting feature of the site is that the forms are not only automated, which requires a capital investment, but also free. Apparently the research, development, and administrative costs will be offset by advertising revenues generated by Google Ad Words and other advertising networks. I see this as a trend in the sense that as legal forms continue to become more transparent in the sense that the legal profession can no longer control legal information distribution, they become commodities and the cost of legal forms themselves goes down to zero.

It will be interesting to see if this site generates enough advertising revenues to justify expansion to other states outside of Florida. Meanwhile it will be a useful site for Florida consumers. It would be useful if the site mentioned on the home page that only Florida divorce forms are available at this time, but there additional states are planned.  As presently presented the site is not in compliance with the American Bar Association's Best Practices for Legal Information Web Site Providers.

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