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

Jay Fleischman, who authors the LegalPracticePro Blog, recently had a blog post where he wished "Death to the Virtual Law Firm." His problem is not with the idea of lawyers practicing law over the Internet, but that the term "virtual" is confusing because it connotes that the lawyer really isn't present. In reality, the virtual lawyer is very present as the producer of legal services, perhaps even more so than a traditional lawyer, because there is the potential for 24/7 accessibility.

He argues that this term confuses the consuming public and potential clients.

In my opinion, the idea of a "virtual law firm"  is becoming a way of describing a law firm that delivers legal services in a new and innovative way. The average consumer whose purchasing behaviour  has changed because of the proliferation of non-lawyer web sites on the Internet, such as LegalZoom, understands very well that when a law firm uses the terms, "virtual" or "online" that the firm is offering a service that is often more reasonably priced, more convenient to use, and often delivered at a faster response time than is usual.  Our market research shows that when consumers see the term "virtual law firm", that it means that a law firm is willing to offer legal services in a non-traditional way, usually  "unbundled legal services," and at a fixed price.

Sometimes a term moves into common usage with unanticipated consequences and a different meaning than its common meaning.  For law firms offering online legal services, this is a way for them to differentiate themselves from law firms that offer legal services in a traditional office setting who eschew digital methods.

It is a marketing message that is powerful, because at the present time there are very few lawyers who have learned to harness the power of the Internet to increase their productivity and keep their prices affordable. "Virtual lawyering" communicates a message to consumers that this is not your "grandparents" law firm.

I doubt that consumers think that a virtual lawyer is someone who is just an avatar in http://www.secondlife.com. At some point in the future, delivering legal services online will become common. At the present time it is not, and the online law firms, that use this moniker, are trying to differentiate themselves from from the rest of the pack. There are very few law firms reaching out to the broad middle class with affordable legal services and too few law firms using the Internet as a platform for the delivery of legal services. "Virtual law firms" represent a new category of law firm that are reaching out to a "latent" market of consumers with a new value proposition.

Because the method of delivering legal services over the Internet is shaped by technology, and the underlying technology needs to be carefully examined and evaluated in terms of whether legal services delivered online are ethically compliant, it is useful to be able to treat this activity as a separate category, at least for the purpose of discussion.

Perhaps in the future, lawyers who deliver legal services over the Internet will refer to themselves as "digital lawyers", or "Online Lawyers", and these terms will become synonyms for "virtual lawyers".  For now, the label, "Virtual law firm" and "Virtual lawyers" is a useful way of framing this emerging activity so its benefits and deficiencies can be further examined. Without precision in definition, it is easy for any lawyer who works from home, and who never sees a client face to face, and who simply uses email, to call themselves a "virtual lawyer." 

I think that the Wikipedia definitions of a "virtual law firm" and "elawyering" , are useful as a starting point for understanding this new category of law firm. The only way to advance the "state of the art" is to recognize that the Internet as a platform for the delivery of legal services is something unique that requires careful examination and assessment. That exploration doesn't get very far if we simply lump all law firms into the same category.

 

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There is a thoughtful discussion going on about the value of adding the capability of offering legal services online to a law firm's business model that was started by Lee Rosen's blog post titled, "What the Virtual Office Advocates Aren't Telling You."  Responses, so far,  include a post by Carolyn Elefant, an astute observer of solo practice, a post from Susan Carter Liebel, the  Founder of Solo Practice University, and a comment by Stephanie Kimbro, the founder of Virtual Law Office Technology, now owned by TotalAttorneys and the author of the recently published book, Delivering Legal Services Online. Lee Rosen is the winner of the ABA/LPM James Keane Memorial Award for Excellence in eLawyering in 2010, and Stephanie Kimbro won the same Award in 2009 for her work in creating her virtual law firm at KimbroLaw. Donna Seyle, a member of the ABA/LPM eLawyering Task Force and a consultant to solo law firms on law practice strategy, also commented on Lee Rosen's blog arguing that there is a great demand for "unbundled" legal services by the middle class.

Lee's argues that in his opinion there isn't much demand by clients for virtual services and that many clients if they want a virtual service are perfectly happy with LegalZoom. He says he has seen, "a survey indicating that many clients prefer a paralegal-provided service to an attorney-provided service, even when both are offered at the same price." Moreover it will be very hard to turn around consumer preferences now that LegalZoom has established a nationwide legal brand.
He also argues that it is very difficult, or not impossible, for a lawyer to generate a stream of income from a purely virtual practice and that a low-end practice doesn't generate the kind of clients that a law firm needs to be successful. Carolyn Elefant makes a similar argument that it is very difficult to generate significant profits from a low end practice unless you have volume which is difficult for the average solo practitioner to create without some capital and the skills to market their legal services on the Internet. I would agree with these points, but whether a solo or small law firm should consider adding a virtual law firm presence to their web site and modifying their business model is really a more complex discussion than can be easily done within the context of a blog post. There is much wisdom in Lee's observations, but the story is more complicated than he makes out.

I would make the following additional points:

1. A virtual law firm as we define it, is one that has a “client portal” where clients can interact with their attorneys online, view copies of their documents, pay their bills online, communicate with their lawyer in a secure space where their attorneys responses are archived and available, assemble documents through an online questionnaire, and access other digital applications. In my opinion, the benefit of using a virtual law firm platform is to increase law firm productivity, law firm transparency, client retention, and client acquisition. These are all positive values that studies of consumers indicate that they want.  It is not the case, as Lee argues, that there is little demand for by consumers for online legal services.  The 1,000,000 wills that LegalZoom claims it has created during the past five years or so, and the dozens (hundreds ?)  of other non-lawyer legal form sites is ample evidence that the legal profession has abandoned the online legal services market to non-lawyer providers.

2. A “client portal” concept is just another tool that enables a law firm to have an interactive presence on the Web which has certain productivity and client communication benefits. It is not a substitute for a law firm developing its own unique business model and market positioning approach which identifies a group of prospects and converts them into clients. Each law firm has to figure out how to integrate these tools into their own business model. For some law firms, this concept is not relevant to their type of practice. For others, it can be another basis for differentiation,  for choosing one law firm over another.  For many law firms, a virtual capability becomes an important adjunct to the regular office based practice, creating efficiencies that only can be created by using the web as a platform for delivery.

Here are a few examples of law firms that are experimenting with online marketing of legal services, offering "unbundled" legal services in a niche area for a fixed price:

• Practical Plans- an On-Line Estate Planning Practice
• Hedeker & Perrilli - SmarterWill - an Online Wills Service of a high end estate planning firm.
• Estate Planning for Single Parents - an Online Wills Service in Tampa, Florida serving a distinct population.
• GranatDivorceOnline.com - an online no-fault divorce service service pro se litigants in Maryland. (one of my web sites).

For other examples, see the Law Firm Directory at MyLawyer.com.

3. If a law firm wants to market to web-based consumers, including members of what we now call the “connected generation” a law firm needs to have a virtual law firm platform in place, as one option for relating and working with clients.  The cost of adding this functionality is now trivial, so there is little excuse for not trying it. We know from our own experience that there are benefits to this approach, as a complement to a traditional office-based practice.

4. LegalZoom and other non-lawyer legal form sites can’t provide legal advice. I can give you many examples from my own virtual law practice where legal advice makes a major difference in legal outcome. Providing just legal forms alone, can sometimes solve a legal problem, but often they do not. The challenge for us lawyers,  is to figure out a way to provide an offering that is price competitive with LegalZoom, but which offers more value.

Moreover, as a profession we should not walk away from the legal problems of moderate income clients. We have skills that will result in better legal outcomes for moderate and middle income clients. As a profession we have an obligation to provide services at a lower price to individuals who can’t afford higher fees and we should figure highly productive methods of serving them. Are we only to serve the wealthy? If so perhaps the legal profession should be deregulated, as it is being done in the United Kingdom, and legal services regulated just like any another service business. This would provide opportunities for many different kinds of providers to provide legal advice and other services which the legal profession now monopolizes. This is the direction that we are heading.

5. Providing a low end, lower priced legal service can be a marketing strategy for providing higher end, higher fee services. A client of http://www.directlaw.com, that is a personal injury firm, is using a low end service to build relationships with prospects so that the prospects turn to the law firm when they have a high value PI case. Some of the DirectLaw law firms give away free legal forms as an inducement to enter into a relationship that results in the purchase of a broader array of legal services.

6. Some lawyers are able to attract a clientele that will be willing to pay $400.00 an hour for a divorce lawyer, but there are not enough of these clients to go around to satisfy all of the divorce lawyers in a state. The broad middle class is seeking less costly alternatives as this level of pricing, and pricing by the hour,  is more than they can afford. There is real demand for "unbundled legal services" at a fixed price. We can see this directly from the weekly increase in traffic at MyLawyer.com , since a Spring, 2010 launch, where virtual law firms offer their services at a fixed price. The success of RocketLawyer , operating in the same market space, is another example that there is real demand for this type of legal service.

7. For many law firms, a virtual offering becomes an important adjunct to the regular office based practice, creating efficiencies that only can be created by using the web as a platform for delivery. It is a component of an office-based practice that can be used to enhance the experience of existing clients with their lawyers.

8. Finally, the cost of adding these technologies to even a solo practice is becoming trivial. We tested a free version of DirectLaw this summer and experienced great demand, so we decided to end it on September 1, 2010, and offer in the future, what we call DirectLaw Basic for a subscription fee of only $49.00 a month for a solo practitioner.

$49.00 a month is not a significant cost for a solo practitioner to acquire a virtual law firm capability. It is low enough for a solo practitioner to experiment and test out the benefits. 

There will come a time, when thousands of solos and small law firms will add a “client portal” to their web sites to power and extend their marketing programs and to enhance the client experience for those clients that are looking for a way to work with their lawyers online. Lee Rosen is correct,  that simply adding a “virtual law firm” capability does not make a marketing strategy, but there are online marketing strategies that can’t be executed without a virtual law firm platform in place.

The delivery of online legal services will continue to expand, I predict, but it is not going to happen tomorrow. As a new generation of clients mature to the point where they have legal problems of their own,  the need of delivering legal services online will intensify.

New innovations take time to reach a tipping point. I remember, very clearly,  when lawyers would not think of using a paralegal, and I remember how long it took for the innovation to mainstream and reach a tipping point. These times are not dissimilar, as the platform for the delivery of legal services is changing, as Jordon Furlong observes.   In all things innovative, patience is a virtue.

 

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Volume IV of the recently released 2010 ABA Legal Technology Survey Report is devoted to Web and Communication Technology. A section on E-Lawyering reports that 14% of Respondents over all, and 19% of solo practitioners, report that they have a virtual law office or virtual law practice. This question in the survey that deals with with the question of whether a law firm has a 
"virtual law practice" was framed in terms of whether the attorney primarily interacts with clients using Internet-based software and other electronic communications software.

In my opinion, these self-reported responses from attorneys are not meaningful and are much too high to be accurate. The reported numbers are not useful in understanding where the legal profession is in terms of adopting the concept of a "virtual law practice." The reality is that the adoption rate is much lower.

The ABA Law Practice Management Section's eLawyering Task Force (disclosure: I am Co-Chair of the eLawyering Task Force),  defines a "virtual law practice" as one that offers to its clients a secure client portal, as part of the law firm's web site, where the client can log in with a user name and password, and interact with their attorney, as well as consume other online legal services. A virtual law practice is more than simply communicating with clients by email and never meeting with clients face-to-face. In order to have a "virtual law practice" by our definition,  you have to have a web site and a portion of that web site has to be dedicated as a secure portal for clients. Without this distinction, many law firms can claim that they are "virtual law firms" simply because they use email extensively, as the ABA Study seems to imply, giving the impression that integration of Internet technologies as part of their legal service delivery system is much higher than it actually is.

For example, in another question, the survey participants were asked whether the firm has a web site. The solo practitioner group responded that only 52.1% had a web site, but this is the same group that responded that 19% has a "virtual law practice."  By our definition, if you don't have a web site you don't have a "virtual law practice." The only explanation for the discrepancy in these numbers is that the question of " Do you have a virtual law practice?" was phrased so broadly that more law firms where included in the category than should be.

Another question that was asked to determine what kinds of online legal services were offered by the firm was: "Does your law firm offer online document preparation?" 11.4% of solo firms reported that they did. Again this number doesn't make any sense. There were 149 respondents in the Solo category. Only 52.1% actually had a web site, or 77 firms had a web site from which online document preparation could be offered. 11.4% would suggest that only approximately 8 law firms could offer this service. Not only is this number too small to make any meaningful projections in terms of the total number of solo practitioners in the US (more than 400,000), but it is also likely to be misleading. Here's why:

The technological options for offering online document assembly for solo practitioners are very limited. One option is to provide fillable Adobe . pdf forms. But you can't easily use a fillable Adobe .pdf to create a text document such as a Will or a Shareholder's Agreement. The major document assembly vendors such as HotDocs, DealBuilder, and Exari have systems that support online document assembly but the price for licensing these systems is much too expensive for the average solo practitioner. Wizilegal, a new entrant to the field, provides a new low cost web-enabled document assembly solution, but our market information suggest that they have only a small number of users. (Disclosure: DIrectLaw, which sponsors this blog, is one of the few web-enabled document assembly solutions that is offered at a price that a solo practitioner can afford.)

In short, the question about the use of online document assembly should have been phrased much more narrowly, with a field in the questionnaire that would require that the law firm indicate what platform is being used to support online document assembly, and whether it is a third party vendor, or whether the programming was done in-house. My sense is that if the question were asked properly, the number of law firms offering online document assembly would be much lower than actually reported.

Finally, 3% of respondents report that their firms offer expert system on their web sites (compared with 1% in the 2009 survey), including 7% of the large firm respondents. Based on our surveys of law firms from solos to large law firms, this percentage seems very high to me. It is very rare that I come across a law firm web site that actually offers an "expert system" for use by its clients, and I review or check out literally thousands of law firm web sites a year.  Most lawyers don't even know what an "expert system" is! I would like to see a more precise question, where the respondent is required to name the kind of "expert system" they are offering and the url of the web site where it is offered, so that a reviewer could more closely examine what the law firm represents they are doing is in fact the case.

I think that it is commendable that the ABA Legal Technology Resource Center now has a separate section of its annual report just on web and communication technology. The platform for the delivery of legal services is gradually shifting from traditional face-to-face office practice to the Web, but my sense is that the the pace of adaptation is much slower than is being officially reported. This is understandable in a profession that views its core identity as one where clients are dealt with primarily face-to-face. 

On the other hand, our own research on consumer preferences suggests that more than half of consumers would like their law firm to have an online virtual component. Thus, the legal profession continues to lag behind what other service industries offer to their clients and customers online.

 

 

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Jason Goita, who operates a Florida state-wide virtual law firm, using our DirectLaw technology,  from his base in Tampa, Florida, has just spun off a second virtual law firm web site that is focused on Estate Planning for Single Parents. This is a good example of how to develop a niche focus within a general area of law. In a crowded market, like the legal profession,  the best way to get noticed is to develop a narrow area of expertise and to focus like a rifle shot on a particular group of clients. When you target a market segment precisely you have an opportunity to gain a client's trust and build a relationship, paving the way for selling other legal services. The site is also very well designed as it doesn't over load the visitor with too much information, guiding the user through a dialogue that leads to purchase of legal services.

A great discussion on the benefits of developing a niche practice as the corner stone of a law firm marketing strategy appears in David V. Lorenzo's Rainmaker Lawyer marketing blog at Law Firm Marketing and the Benefits of a Narrow Practice Niche.  Lorenzo states that there are at least four good reasons to develop a narrow practice niche: (1) perception of expertise; (2) client confidence; (3) experience; and (4) competitive advantage. Lorenzo says:

Focusing your law firm marketing in a narrow niche will help you attract more clients, gain their confidence and respect quicker and it gives you a competitive advantage.  Start thinking of a way you can narrow your marketing focus and you will notice the difference in the clients you attract.

 

In addition to  these four reasons, I would add that if you want to get noticed by Google and the other search engines, the best way to accomplish this objective is to have a narrow focus with targeted key words both on the pages of the website and in the meta-tags on each page of the site.
 

Increasing the firm's visibility in organic search can result in a significant reduction in the cost of pay-per-click advertising. Pay-per-click advertising (e.g. Google AdWords) is, in my opinion, still critical for getting visitors to your site, but a narrowly focused site goes along way towards getting noticed on the web. Moreover, a narrowly focused site is less confusing to visitors because of the singular focus. The mind can only absorb so much text before attention begins to fade. Focus helps keep the Internet-based client focused on the task at hand and streamlines the purchase process.

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This Friday there will be a debate on twitter about virtual law practice between Stephanie Kimbro (@StephKimbro and Brian Tannebaum (@BTannebaum) You can follow the debate at:
 @22Twts and with the Twitter hashtag #22TwDb.

Brian has already launched an opening salvo in response to a blog post that Stephanie wrote just yesterday.  Unfortunately the ABA Journal, which is co-sponsoring the debate, has framed the issue of whether lawyers can dispense with physical office space.

The issue should have been framed in terms of whether on-line legal services delivered through a secure client portal are a valuable adjunct to an existing law practice, and whether a law firm operating purely virtually, with out a physical office can be a viable mode of law practice. It is hard to discuss this complex topic in 140 character sound bites but I am going to try:

Virtual lawyering is about delivering legal services on-line, not about doing away with a physical office, although that is an option.

Virtual lawyering is about relating to clients through a secure client portal where the client signs on with a user name and password.

Within a secure client portal clients can communicate with their lawyer securely, provide data to assemble legal documents, pay bills, etc.

The utility of the client portal concept depends on the type of law practice. I would not recommend it for a criminal defense practice.

Some kinds of law practices require rich face-to-face interactions. Other kinds of practices, can get by with more digital transactions.

One size doesn't fit all, but a physical office is not necessary for some kinds of law practices.

Millions of middle class Americans have turned away from using lawyers to solve their legal problems.

50% of middle income households in the US have at least one legal problem per year. Only 20% seek the assistance of an attorney.

A younger generation with the Internet in their DNA will prefer to deal with their attorneys online.

They prefer to go on-line and use non-lawyer providers like LegalZoom, USLEGAL, USLEGAL and Nolo and other non-lawyer web sites.

These non-lawyer solutions are inadequate but seem to be good enough, for the average consumer.

Unless solos and small law firms wake-up they will continue to lose market share to these non-law firms providers.

Fact: A recent study showed that over half (56%) of consumers expect good law firms to offer legal services online.

The same study revealed that  (47%) of consumers would be more likely to choose a law firm that offered the convenience of online access.

The legal profession is changing. Change is caused by the Internet as a new platform for the delivery of legal services.

@BTannebaum is completely wrong. He doesn't let facts get in the way of his opinions.

@BTannebaum doesn't understand the risks that he is taking by using email to send documents to his clients in his criminal law practice.

The virtual law office issue is not about not having a physical office. It is about providing legal services on-line.

No virtual lawyer that I know has argued that client files should be kept on an IPad while sitting in Starbucks.

There is more danger in keeping records in paper format in the office, than there is storing them in a Tier IV facility in encrypted format.

Does @BTannebaum even know what a Tier IV facility is?  Has he bothered to find out?

@BTannebaum thinks lawyers looking for a better way are whining, when in fact they are looking for a better way to serve clients.

Almost every other industry provides a on-line  client portal for their customers -- except the legal profession.

Virtual lawyering is not for the convenience of the lawyer. It is an approach which is aims to offer legal services at an affordable price.

It is an approach the offers more convenience and a more transparent lawyer-client relationship.

A face-to-face meeting with a client is often optimal, but it is expensive, and clients are looking for cheaper alternatives.

In a criminal defense practice, price is usually no object.

If you are going to lose your license to practice law, price is usually no object.

@BTannebaum is biased because his vision is limited to his kind of law practice. He has blinders on.

@BTannebaum can keep arguing for traditional methods of law practice, while consumers turn away from the legal profession.

Brian Tannebaum (@BTannebaum) stop whining. Wake-up. Its the 21st century.

Stephanie Kimbro (@StephKimbro is a pioneer and a legal rebel breaking new ground in developing new methods of delivering legal services.

 

 

 

 

 

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RocketLawyer, a consumer portal linked to a network of law firms has announced that they have secured $6.55 million out of a $7.55 million funding round, according to a regulatory filing.  This is in addition to an initial $2.9 million investment by LexisNexis. It would be interesting to know RocketLawyer's valuation. If the $7.55 million bought 25% of the firm, then RocketLawyer, would be worth upwards of $30,000,000, post-money. If RocketLawyer is generating $6.000,000 in annual volume, then the valuation would be 5 x revenue. Sounds pretty rich. Typically valuations are confidential, but this information could shed some light on how hot the "Software as a Service" legal industry is. 

Dan Nye, former CEO of LinkedIn, has assumed the role of CEO, replacing Charley Moore, the founder of RocketLawyer., who remains as Chairman. (I guess the old adage that the first thing that a VC does when investing in a company is to replace the CEO is true!).

It will be interesting to see how RocketLawyer scales its operation with this funding, and how it develops a strategy to differentiate itself from AVVO and LegalZoom.  As AVVO adds functions to link consumers with lawyers, and as LegalZoom moves towards expanding its referrals to law firms for consumers that need the assistance of lawyers, one can see a certain amount of convergence in these sites. Of course, neither RocketLawyer nor LegalZoom, actually rate or evaluate lawyers, so in my opinion, gives AVVO an upper hand.

Our own legal consumer portal at MyLawyer.com also offers to link consumers to law firms, but the MyLawyer.com Directory only contains virtual law firms that offer legal services online, a niche which we believe will continue to grow. MyLawyer.com's free legal forms and legal documents service is a disruptive move designed to undercut the RocketLawyer and LegalZoom, approach that a consumer should have to pay for a legal form. (Although, our own experience has demonstrated that consumers really like the idea of a person reviewing and creating a legal document even though the person is not a lawyer and can't function as much more than a "scrivener." )

Like "open source" code we believe that the cost of legal forms on the web will continue to decline until pricing approaches zero, and that the real value add while be an attorney's advice and review when it is needed. For an elaboration on this theory, see generally, Chris Anderson' work on , Free - the Future of a Radical Price.  Once a person's situation becomes a bit more complex that the simplest fact situation, it is arguable that some form of legal advice and guidance is required.

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New Jersey is one of the few states that has what is known as a "bona fide office" rule. A NJ Bar Committee recently endorsed the role and this has created a lively debate within the legal blogosphere. [ See ABA Journal Article ].

“Virtual law offices” violate the state requirement for a bona fide office, according to a joint opinion by the New Jersey Advisory Committee on Professional Ethics and the Committee on Attorney Advertising. See Opinion ACPE 718/CAA 41.

Rule 1:21-1(a) requires that a New Jersey attorney maintain a bona fide office for the practice of law.

For the purpose of this section, a bona fide office is a place where clients are met, files are kept, the telephone is answered, mail is received and the attorney or a responsible person acting on the attorney’s behalf can be reached in person and by telephone during normal business hours to answer questions posed by the courts, clients or adversaries and to ensure that competent advice from the attorney can be obtained within a reasonable period of time.

The purpose, according to the opinion, is to make sure lawyers are available and can be found by clients.

The Committee quotes on a 1994 Opinion:See Committee on Attorney Advertising Opinion 19, 138 N.J.L.J. 286, 3 N.J.L. 1821 (September 19, 1994):

"A so-called “virtual office” does not qualify as a bona fide office. A “virtual office” refers to a type of time-share arrangement whereby one leases the right to reserve space in an office building on an hourly or daily basis. Accordingly, an attorney’s use of a “virtual office” is by appointment only. The office building ordinarily has a receptionist with a list of all lessees who directs visitors to the appropriate room at the appointed time. Depending on the terms of the lease, the receptionist may also receive and forward mail addressed to lessees or receive and forward telephone calls to lessees."

"As noted above, a bona fide office is, in part, a place where “the attorney or a responsible person acting on the attorney’s behalf can be reached in person and by telephone during normal business hours to answer questions posed by the courts, clients or adversaries . . . .” R. 1:21-1 (a). A “virtual office” cannot be a bona fide office since the attorney generally is not present during normal business hours but will only be present when he or she has reserved the space. Moreover, the receptionist at a “virtual office” does not qualify as a “responsible person acting on the attorney’s behalf” who can “answer questions posed by the courts, clients or adversaries.” Presumably, the receptionist can redirect a telephone call to the attorney lessee of the “virtual office” much like an answering service, but would not be privy to legal matters being handled by the attorney and so would be unable to “act[] on the attorney’s behalf” in any matter."

Note that this is a "1994" Opinion that was published before the Internet affected every aspect of American society. Stephanie Kimbro in her post of this topic correctly points out that the Committee is solely focused on "physical office sharing" arrangements and not the concept of the "Web-based virtual office" that is designed to serve clients exclusively over the Internet. A pure "virtual law firm" that operates solely on the Internet, has the capacity of offering legal services at much lower fees, because of less "friction" in the transaction, resulting in increased access to the legal system for clients who can't afford the the high fees of a traditional legal practice.

Carolyn Elefant in her blog, MyShingle.com thinks the rule is moronic because it is out of touch with modern Internet technology, increases the cost of running a solo practice, which therefore increases the costs to consumers who are looking for lower priced legal services. She argues that the ruling discriminates against work at home parents with child care responsibilities, Although "home offices" are permitted, provided the address of the home office is published.

Brian Tannenbaum, who writes the blog My Law License, agrees with the opinion because he states that he is a "traditionalist", consumers should not be telling the legal profession how to practice law, and cites the Florida bona fide office rules where he practices, as another good example of a state that is seeks to maintain high standards of legal practice.

Josh King, AVVO General Counsel and Vice President for Business Development, agrees with Carolyn Elefant, that the impact of this ruling is to increase the overhead of solo practitioners and the cost of legal services to consumers.

This issue has been debated or a long period of time. In a 2002 article in the New York Times it was reported that the real reason for the rule is to keep lawyers who are a member of the New Jersey bar, but who practice elsewhere, such as Philadelphia, from encroaching on the territory of "traditional" law firms in New Jersey.

One Philadelphia lawyer commenting on the rule stated:

"In this age of Internet, e-mail, overnight delivery, and faxes, we're dealing with people all over the world, and this clearly is a protectionist stance," said Leonard Bernstein of Reed Smith, a Philadelphia-based law firm. "The New Jersey lawyer is an anachronism that is out of step with the times, and the rule should be changed."

What was true in 2002, is even more true today. The Internet is changing the way legal services are delivered and for solos and small law firms to remain competitive with non-lawyer online legal service providers like LegalZoom, who continue to take market share from solos and small law firms. This is a blow to innovation in the delivery of legal services. I wish the Committee would have examined more closely developments in Internet and information technology generally as these developments are providing the platform for a new way of delivering legal services.

The Opinion reinforces the market position of established law firms who already have made an investment in physical offices and continue to offer legal services based on a high cost, bill by the hour economic model. The "traditional" model works best for certain kinds of cases and certain kinds of clients, but our market research shows that millions of consumers are turning their backs on the legal profession and searching for lower cost alternatives, often on the Internet. It is interesting that none of these considerations enter into the analysis of the NJ Bar committee. It is as if the Committee is stuck in 1994 and is unaware of the changing patterns of legal service delivery that are being driven by the Internet.

In fact, the ruling is not in the consumer interest. The ruling will raise law firm costs and restrict competition in the legal profession in New Jersey, and raises costs to consumers. The United Kingdom recently reorganized the legal profession by taking the subject of law firm regulation away from the legal profession and putting it in the hands of an official who would be more sensitive to consumer needs and interests. Perhaps it is time to do the same in the United States. If state bar associations make regulatory decisions which in fact are designed to maintain the status quo of established law firms within their states, at the expense of consumer interests and innovation in the delivery of legal services, perhaps it is time for more fundamental change in the way the legal profession is regulated.

Disclosure: I am happy that I am not a member of the New Jersey Bar. I operate a virtual law firm in Maryland, from my home in Florida that has served hundreds of Maryland residents since 2004 over the Internet. We are clear on our web site about the fact that we don't have a physical office, and this hasn't stopped consumers from dealing with us. We do maintain a Maryland address for registration purposes.

 

 

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Wizilegal,  a relatively new company based in San Diego is offering a virtual law firm service to solos and small law firms. The company recently relaunched its web site with a focus on enabling law firms to compete against LegalZoom.  Like DirectLaw, Wizilegal offers web-enabled document automation that enables law firms to offer  legal documents and forms through a law  firm's web site. It is good to see new competition come into this market space  because it is healthy sign that the "virtual law firm" concept is receiving wider acceptance among solos and small law firms.

We have previously defined the "virtual law firm" as a law firm that has a secure "client portal" integrated with its web site that is accessible by a client only with the use of a secure user name and password. From this "client portal", the  law firm is able to offer various legal services online.

A number of companies have emerged during the past two years that offer a "client portal" that can be branded with the law firm's logo and integrated seamlessly with the law firm's web site. Typically, the client portal is provided as a SaaS on a subscription basis. These companies include DirectLaw, Total Attorney's Virtual Law Office Technology, Clio's Web-based Practice Management Software, and now Wizilegal. These companies are to be distinguished from web-based practice management software companies like RocketMatter , that offer just "back-office" practice management tools, but no "client portal." application.

Here is a quick summary of key features of the Wizilegal offering:

• A web-enabled document authoring solution that is claimed to be very easy to use. (But no pre-automated legal documents or forms are included in their package). The document automaton function incorporates intelligent rule-based document assembly and can be applied to both text documents and .PDF forms. Interactive questionnaires appear within the web browser. I have not worked with this system, so I can't tell how easy it is to build out complex documents and forms. We welcome comments from users of Wizilegal about ease of use of the authoring system.
   
• The capability of offering document downloads and reviews;
   
• Integrated payment processing through PayPal. (but not through MC, VISA, or American Express);
   
• The capacity to create a law-firm branded client portal;
   
• Law firms can set up their own system almost immediately using the the company's web tools.
   
• Pricing is based on a $49.00 set up fee, plus $65.00 a month with no long term contract. In addition for every  document created by a client there is a $4.00 per document charge. There is no document charge for documents created internally, but for each administrative log-on there is a separate $55.00 administrative fee.
  

As competition increases in the virtual law firm provider space, it will be interesting to see how much market share Wizilegal will be able to capture with its approach. It will also be interesting to see whether a new cadre of web-enabled "virtual law firms" offering a true legal services  will be able to have an impact on LegalZoom's growth rate. With  LegalZoom's superior capital resources and national branding power, it may be hard for individual law firms operating online to capture mind share. Out of date ethical rules that govern the legal profession don't help the competitive position of law firms when they go up against new non-law firm players like LegalZoom. So the playing field is not level and the legal profession operates from a disadvantage.

It doesn't help when Robert Shapiro of OJ fame, is proclaiming every few hours on many cableTV channels that "The Law  is on Your SIde". What does that mean anyway?

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The Kre8tive Law Group, managed by Solicitor Andrea Riccio in Calgary, Alberta, has become Canada's first virtual law firm using DirectLaw's virtual law firm platform. The firm offers "unbundled legal services" to both individual and small business clients.

Clients can:

• buy completed legal documents together with legal advice
• pay for legal advice at a fixed price
  
• communicate with a lawyer on a secure basis
• upload documents received from other parties for our review
• archive copies of their completed documents

Solicitor Riccio said that he thought that it was important to provide a virtual law firm presence for web savvy clients and clients who wanted to work with their law firm over the Internet.  Riccio said that "our fixed price approach is appealing to clients who want to be able to control their legal expenses."

Kre8tive Law Group was founded in 1994. Andrea was admitted to the Ontario Bar in 1990 and practiced for a Bay Street firm in Toronto, Canada, working primarily on commercial real estate transactions, eventually becoming a partner of the firm. He was called to the Alberta Bar in 1994 and gained extensive experience in a broad range of corporate and commercial matters through his association with a local Calgary firm. His belief that "better people make better lawyers" led him to found Riccio Law. He also provides pro bono legal services to numerous non-profit organizations including the Italian-Canadian community at a local, regional and national level. He previously served as a national director of the National Congress of Italian-Canadians Foundation and President of the Calgary Italian Club.

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It seems like LegalZoom's practices are finally catching up with it. The company is being sued in Missouri on the grounds of unauthorized practice of law and the plaintiff's are requesting class certification. To give an example of how popular LegalZoom's services have become, LegalZoom in its petition for removal to Federal court claims that it has served over 14,000 Missouri residents in a five year period, generating over $5,000.000 in sales. Missouri is a relatively small state, so you can get some idea of what kind of business LegalZoom is doing nationwide. No wonder the legal profession is getting nervous and starting to pay attention to this disruptive player in the legal industry.

A good discussion of the case can be found on the IPWatchdog Blog in an article by the Blog's Founder Gene Quinn.

Click here for a copy of the Missouri Complaint,  LegalZoom's petition for removal to Federal court, and a copy of a letter from the North Carolina Bar requesting that LegalZoom Cease and Desist from operating within North Carolina because it is violating North Carolina's UPL statute when it prepares incorporation papers.

In its defense, LegalZoom in its removal petition,  claims that it is:

" a company whose principal business consists of providing an
online platform for customers to prepare their own legal documents. Customers choose a
product or service suitable to their needs and input data into a questionnaire. Where applicable,
the LegalZoom platform then generates a document using the product and data provided by the
customer."

It this were the case, LegalZoom would be functioning only as a "scrivener" transcribing the client's information into a form. It is well established in some states, including California, where LegalZoom is based, and also Florida for example, that non-lawyers, often called "legal technicians" can help consumers prepare legal documents, as long as they don't give legal advice.

The question of whether LegalZoom's  staff do more than they say, and actually provide legal advice, even if it is limited legal advice, is a question of fact to be determined. It  would be interesting to see what the discovery process turns up and what the  LegalZoom, "platform" actually does and how it works.

For comparison, We the People, a retail chain of 35  "Legal Document Preparation stores  operating in six states, operates under the same principles. Customers complete paper questionnaires which are faxed to a central processing center where a technician simply inserts the client's data into a desktop document assembly program which generates a form. (This is  the same process that many lawyer's use, except lawyers provide legal advice and analysis).  This document preparation process is essentially the same as LegalZoom's except that it takes place off the Internet through a network of retail stores. We the People has been attacked by the Bar in several states for UPL, but the company has worked hard to assure bar authorities that its staff and franchisees don't provide  legal advice.

In theory, We the People, stores are able to reach a market of customers that do not have Internet access and prefer to deal with a human being directly. This market base is likely to have even lower incomes, and ignored by  both attorneys as a target market, and have too much income to qualify for legal aid.  Ironically, however, the We the People pricing is even higher than the LegalZoom pricing, probably because of the cost of maintaining a  retail location. Yet the remaining We the People stores, ( down from a high of 140 stores), seem to be sustainable, if not thriving.

Both companies provide a needed service in the sense that they provide an alternative to consumers who are willing to invest their own time and resources to make sure that the forms offered are the correct forms for their particular situation. Neither company can advise a consumer about what form they should use for their situation, as that would be a form of legal advice. Consumers may be taking a risk when they buy from a self-help document preparation forms company, but it seems this is a risk that consumers are willing to take to avoid what are perceived by many as high legal fees for the same  transaction. For these consumers, what they get is a "good enough" result at a price they can afford.

The other reality is that it is deceptive for LegalZoom and We the People , to claim that using their services will save hundreds or thousands of dollars in legal fees, when two very different category of services are being compared: 
 

• one a legal information service;
• and the other a true legal service from a licensed attorney.
  
  The content of the services are fundamentally different and to compare the services to each other is like comparing "apples' and " oranges". 
  
  Sometimes you get the same legal result when you use a document preparation service, but often you don't.  Apart from UPL issues, it seems to me that this is a misrepresentation in advertising and these claims should receive closer scrutiny from state consumer protection agencies. (Although I am sure that many of LegalZoom's satisfied customers would say that they don't need any protection).

Both companies demonstrate the principle that you can solve certain legal problems by having access to "legal information." Legal information by itself is a problem solver for many consumers, and the access to legal information and legal forms on the Internet, has simply accelerated this trend at a much faster rate in the last five years than the self-help law book industry has been able to accomplish in 30-35 years of its existence. This means that lawyers will have to do more to demonstrate their value to the consumer, particularly solos and smaller law firms that serve the broad middle class.

A better solution for consumers, as we have advocated in these pages, is for attorneys to offer legal forms bundled with legal advice at an affordable price, perhaps slightly higher than LegalZoom, but offering much greater value, over the Internet. This is often called. "unbundled legal services," enabling a consumer to purchase just the legal services they need, and no more.

Using virtual law firm technology, like DirectLaw's virtual law firm platform, lawyers can be even more efficient that the LegalZoom or We the People models, because the entire document assembly process is software driven creating a legal document instantly from the user's input, ready for the lawyers further review, drafting, and advice-giving. The increased productivity that results from a web-enabled document automation process enables the lawyer to offer a very price competitive service that in fact offers more value. The value of each sale is lower, from the attorney's point of view, but volume can be much higher if effectively marketed. (Neither LegalZoom nor We the People have such a technology in place. No wonder there prices are so high for what you get!).

As long as the legal document preparers don't give legal advice, they should be able to coexist with the legal profession, for certain kinds of common legal transactions, but not all.

But lawyers will have to work harder to provide their value and start offering true legal services online over the Internet. Driving non-lawyer legal document preparers out of business on UPL grounds is not an answer. At the end of the day prosecution efforts, will seem to the consuming public as just another attempt by the legal profession to maintain high legal fees for common transactions, while avoiding the cost of innovation.
 

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When we designed the DirectLaw web service we relied on theories developed by W. Chan Kim and Renee Mauborgne in their best selling book Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant .

Our concept is that a technology platform that enables law firms to offer limited legal services over the Internet could tap into the "latent markets" for legal services.

We also used this analytical approach to develop our online non-lawyer document preparation service approach and our approach to offering automated legal forms over the Internet which are also designed to serve the "latent market for legal services". LegalZoom is demonstrating that there is a huge latent market that is satisfied with a "good enough" solution.

Nicole Garton-Jones, a lawyer based in Vancouver, Canada, and a user of our DirectLaw platform has posted a detailed analysis of how her law firm development strategy is an example of Blue Ocean Strategy in action. See her blog post on this subject. Its worth reading.
 

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DirectLaw is pleased to announce the opening of a new virtual law practice by Tim Ferraris in Knoxville, Tennessee.   The firm will provide services in the areas of business, family and divorce, estate planning, landlord/tenant, and name changes over the Internet throughout the state of Tennessee.

Tim founded Ferraris Law Group and its unique On-Line Office with the mission of providing convenient and cost-effective legal services to people throughout Tennessee. Tim is passionate about being his clients' trusted legal advisor throughout their lives.

A resident of Knoxville since 1984, Tim obtained a B.A. in Political Science from the University of Tennessee and graduated with high honors from the U.T. College of Law.

In addition to his law practice, Tim serves as Director of "Hit the Road, Leukemia," an annual event that raises funds to benefit blood cancer research efforts.

The online service allows the firm to provide cost-effective legal services so that everyone in the state can have access to affordable legal services.

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The Law Practice Management Section of the American Bar Association is sponsoring a Teleconference on the The Virtual Law Firm: Benefits, Costs, and Ethical Pitfalls to Avoid, on Thursday, December 17, 2009 between 1:00 P.M. and 2:30 P.M.

The program is a Live Audio Webcast with PowerPoint support.

I am participating in the program, together with Stephanie Kimbro of KimbroLaw Services and Marc Lauritsen, President, Capstone Practice, and Co-Chair, eLawyering Task Force, ABA Law Practicement Section .You can register online.

 

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DirectLaw is pleased to announce the opening of a new virtual law practice by Montreuil & Associates in Macon, Georgia.   The firm will provide services in the areas of business, family and divorce, estate planning, landlord/tenant, and name changes over the Internet throughout the state of Georgia.

The firm provides both traditional legal services and an online legal solution platform to serve new and existing clients. The online service allows the firm to provide cost-effective legal services so that everyone in the state can have access to affordable legal services. Ms. Montreuil says that she is committed to the idea of using the Internet to providing increased access to the legal system.

Renay Bloom Montreuil has an undergraduate degree, magna cum laude, from Youngstown State University and a law degree from Mercer University School of Law. Renay has been a Pro Bono Volunteer for Georgia Legal Services and has worked with Life support as a mentor for woman and youth.  She is licensed to practice law in Georgia and Florida.

For more information see website.

 

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The eLawyering Task Force,  which is part of the Law Practice Management Section of the American Bar Association has been developing a recommended set of minimum requirements for law firms delivering legal services online.  The draft that has been published is a working draft and we are soliciting comments as we move towards a final document. The draft document can be downloaded here.

The ABA does not have a comment facility on their web site, but comments can be contributed on this blog, well as a discussion group  that has been set up on LinkedIn called Virtual Lawyering.

Any comments that are submitted will be circulated among members of the Task Force.

Disclosure: I am Co-Chair of the eLawyering Task Force

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 DirectLaw is pleased to announce the launching of SlatterLaw its third virtual law firm in the State of Georgia. SlatterLaw will provide online legal services to small businesses and individuals throughout Georgia.

Kerry Slatter founded the law firm with the goal of providing convenient and cost-effective legal services to small business owners and individuals across the state of Georgia. In addition to small business legal services, the Slatter Law Firm also provides counsel in various other areas, including estate planning, corporate law, and employment law.

From the web site:

 "Slatter Law provides the following core values for its clients:

• Customer Service – Provide value and legal solutions to exceed client’s expectations.
• Cost Efficiency – Provide cost efficiencies to enable clients to obtain more value from their legal budgets.
• Responsiveness – Limit attorney workload and the number of clients. The motivation to build long term relationships with clients drives this goal.
• Convenience – Utilize excellent customer services and technology to provide legal services in a convenient manner for the client (via secure online website client space, by email or by phone as needed).
• Innovation – Promote innovation for all aspects of client legal services, including the use of cutting edge technology, resources, and fixed fee arrangements."

Mr. Slatter has an undergraduate degree from Morehouse College and a law degree from State University of New York at Buffalo School of Law and is licensed to practice in Georgia.

 

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We are pleased to announce the launch of the law firm of Pfau and Associates that will provide online Estate Planning services to Nevada residents. This is the first DirectLaw law firm in the State of Nevada.

Pfau and Associates concentrates solely on the areas of estate planning and probate to ensure the highest quality of legal representation. The firm offers both online digital estate planning solutions and in-office services to provide for the client’s estate planning needs. Among the online offerings are simple living wills and trusts, durable powers of attorney, and advance healthcare directives.

Matt Pfau says that his philosophy is, “We make sure that we are always available to our clients for any type of support that they need. Since the choices that you will make are deeply personal, we will provide you with individualized, one-on-one attention"

Matthew Pfau has an undergraduate degree from the University of Nevada, Las Vegas and his law degree from Wittier Law School. Matthew is admitted to practice before all courts in the State of California and Nevada.  He is also admitted to practice before the United States Court of Appeals for the Ninth Circuit.  For more information visit his website.

 

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The Law Practice Management Section of the American Bar Association awards the James I Keane Memorial Award in Excellence in eLawyering, annually at the ABA TechShow in Chicago. Nominations are now open for the Award to be in March, 2010. Candidates can self-nominate. The Award Requirements can be found here. The nomination form can be found on-line here.

Here is a brief summary of the Award criteria:

• The project or law firm must demonstrate the use of the Internet to deliver legal services.
• It must be unique. It should be an on-line legal service that has never been done before, or not quite this way before.
• Absence of precedent - Never been done or done quite this way before.
• There should be some measurable outcome that would indicate that the innovation is accomplishing what it was intended to do.
• Action must have taken place no more than three years prior to this entry, and the legal service must be operating for at least one year prior to submission of the Application.
• Additional consideration will be given to projects that focus on the delivery of legal services to individuals of moderate means.
• The nomination should describe how the service was developed, how it is managed, and how it has been evaluated.
• The nomination should describe how the service can be replicated by other law firms in terms of development costs, required technology, people requirements, and ongoing maintenance costs.

 

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On Friday, October 2nd, I presented at Vancouver’s Pacific Legal Technology Conference on the topic of Virtual Law Practice with Simon Chester of Heenan Blaikie and Nicole Garton-Jones of Heritage Law.

 

We discussed the two heads of the definition of virtual law practice:  practising law over the Internet through a secure online portal and practising law under one brand through satellite offices (which are often home offices).

 

Nicole is an early adopter who described her experience in managing Heritage Law, a paperless office where most staff work from home.  Some staff are located in places such as Victoria and the Sunshine Coast that are remote from Heritage Law’s central office in West Vancouver.  Heritage Law soon will be implementing DirectLaw through a separate business model called Heritage Law Online, subject to regulatory approval.

 

I analyzed Web-enabled virtual law practice using the Eliminate-Reduce-Raise-Create grid, which sets out a framework for contrasting innovative value propositions with conventional value propositions.  It comes from a book called Blue Ocean Strategy.  Among other things, Web-enabled virtual law practice eliminates the visit to the lawyer’s office, reduces cost and waste, raises a lawyer’s reach beyond his or her immediate geographical area, and creates a packaged solution.  I also discussed Chrissy Burns’ PhD thesis, entitled “Online Legal Services—A Revolution that Failed?.”  It is found at http://tinyurl.com/kvtden.

 

Simon discussed the regulatory issues involved in setting up a virtual law practice in Canada.   Canadian regulators have not addressed virtual law practice specifically but there are issues with regard to limited scope representation, preservation of data, and the client identification and verification rules.

 

Our PowerPoint slides from the presentation are located here:

 

http://www.pacificlegaltech.com/download/SSF2.pdf

 Reported by Darryl Mountain, President, Ontago, Inc.

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Virtual Law Office Technology, LLC, (VLOTech) based in North Carolina has been acquired by TotalAttorneys, a well-regarded law firm marketing and management services organization based in Chicago. VLOTech should do well and flourish under TotalAttorneys management umbrella, and with TotalAttorneys' financial backing, VLOTech will continue to be a major player in the emerging market for web technology that enables law firms to deliver legal services virtually. Stephanie Kimbro, the co-founder of VLOTech,  was the winner last year (2009) of the James Keane Award in Excellence in eLawyering, awarded by the Law Practice Management Section of the American Bar Association, for her work in designing and operating her virtual law firm in North Carolina, (which was the prototype for the VLOTech technology).

As many of our readers know, we have been a friendly competitor of VLOTech , through my company, DirectLaw,  a client-centered hosted web service for solos and small law firms , in the sense that the more vendors that are in this space, the less time it will take for these ideas to move beyond early adopters to capture the interest of the mainstream of the profession. My view is that the more competitors in this market space the better, as each will come up with their own unique innovation to respond to the differing needs that law firm's have as they migrate their practices to the web. Our experience is that it always takes longer than we can predict for these innovative ideas to catch the interest of the bulk of practicing lawyers.  Congratulations to Stephanie and her team and good luck with their new partner. Click here for more details.

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We have been observing the dip in employment of recent law school graduates and the number of lawyers being terminated from mid and large size law firms. We think this will result in a resurgence of start-ups of solo and small law practices, as traditional employment opportunities for lawyers dry up.

To help these lawyers get their law practices up and running with a virtual law firm component, DirectLaw, our company which offers a turnkey virtual law firm solution for solos and small law firms announced today a new discounted program for new lawyers during their first year of practice, and lawyers who are leaving their law firm employers to start up their own law firm. The program is described in detail here.

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There has been some recent blog comments [See: Carolyn Elefant 's Blog  [about  the meaning of Robert Capps article  in this month's WIRED Magazine, (September 2009) about the concept of "Good Enough",  "Good Enough" solutions, (when cheap and simple is just fine). , and my quote about how this concept applies to the legal profession.

When I was interviewed for the Wired Article, I didn't know the focus of the article, and I was simply reporting my experience in offering limited legal services to consumers for a fee they can afford. I wasn't saying at all that lawyer's should do less competent or less excellent work. Rather I was thinking about how legal transactional events between consumer and lawyer can be restructured to get to the "good enough result" that many consumers seem to want.

My best example is one that I participate in daily, and which I mentioned in previous blog post. Divorcing couples opt for a quick settlement, even if they don't get "every right" they are entitled to in the interest of reducing their legal fees and getting on with their lives.

Divorce lawyers can charge from $5,000 - $10,000 (low-end of fee schedule) for even a relatively simple divorce. case. The lawyers will say there are no simple divorce cases. But that is from the the viewpoint of the lawyer. From the consumer point of view, they have a choice to spend $5,000 for each counsel who is representing either party- or to take the money and use it to get on with their lives. The question is--  what is the ROI from the consumer's point of view?  Sometimes the investment of $5,000.00 in legal fees is worth it. ($5,000.00 is really a low end estimate). Consumers don't think so, or there would not be thousands of pro se litigants representing themselves in family court. Pro Se Representation is a good example of a restructuring of the lawyer/client relationship to get a "good enough result." The success of LegalZoom -  admittedly a service which is a very small step above a bare legal forms service is more evidence of consumer preferences.

So is the movement towards "limited legal services." Lawyers, mostly solos and small law firms, that think that otherwise and think that full service representation is the only way to go are not facing consumer reality. These lawyers are living in a dream world.

Consumers want solutions to their legal problems. If they can get legal solutions in a different form than a traditional legal service from an attorney that is "good enough" at much less cost, they will turn away from the legal profession and seek those alternatives if they get a result that satisfies their expectations. 

 

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The American Bar Association Journal has started a new Legal Rebels project to get lawyers thinking about how to change the legal profession. The Journal recognizes that the legal profession is undergoing structural change accelerated by the current recession, and that as the economy emerges from this recession, the landscape of the legal profession will be very different from the one that we have now know. 

Searching for new ways of practicing law, the Journal will profile 50 or so lawyers who are demonstrating new ways of serving clients by expanding their markets, delivering legal services in a different ways, or creating new styles of legal practice. The plan is to tell the stories of these lawyers through a variety of social media channels using text, pictures, audio and video.

A colleague of mine,  Jeffrey Hughes, was named today in the first group of profiles for his innovative and ground-breaking work in combining a law practice within the context of a coffee house under the Legal Grind brand, serving "legal counsel" and good coffee in a community setting. Legal Grind is an excellent example of delivering "unbundled" or "limited legal services" at prices that people can afford.

By the way, I was honored to also be included in this first group of profiles.

 

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The month's WIRED Magazine, (September 2009) has an interesting article on how the Internet is enabling "Good Enough" solutions, (when cheap and simple is just fine). I have maintained for a long time that often there is a certain amount of overkill when lawyers tackle a problem, when consumers really want a quick and reasonably priced result. Consumers will often sacrifice securing every "right" they have in order to save thousands of dollars in legal fees. I see this in the divorce area in my online practice all of the time. Often the divorcing parties want to get on with their life at the lowest possible cost. Rather than spend $15,000 in legal fees pursuing every right that the parties think they have, often the best solution is to use the funds that would have been spent on legal fees to invest in their individual futures. The present recession is accelerating these trend.

Lawyers are taught to represent a client "zealously". In fact they are required by the ethical codes of professional conduct to do so -- but at what price. Pursuing every legal angle results in prohibitive legal fees that the average consumer or small business can't afford. There must be a better way to practice law without breaking the bank.

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It has been a very busy summer at DirectLaw. We are constantly adding features to our DirectLaw Virtual Law Firm Platform. Sometimes new features are suggested by our growing network of DirectLaw law firms; often one of our staff gets a good idea and we push it out to the Platform to see what kind of response we get from consumers and our client law firms. The nature of a SaaS (Software as a Service) offering, like DirectLaw, is that we can can modify and enhance the platform at any time and all law firms in the network benefit immediately. Our clients don't  have to wait until "the next quarterly software release."

Here are some of the recently features that have been added to the DirectLaw Virtual Law Firm Platform:

June 17, 2009 - New virtual law firm platform for consumer bankruptcy attorneys released. Click here for more information.

July 13, 2009 -  DirectLaw Workspace™. brings the benefits of web-enabled document automation for clients who are not online by enabling law firms to use our web-enabled document automation system for regular office-based clients.  

July 29, 2009 - A new "collaboration" function that enables law firms to communicate and collaborate securely with their clients over the Internet. Click here for screenshot.

August 5, 2009 - We installed a new "billing" function that enables law firms to bill clients online for traditional legal services and supports online bill payment by clients through their MyLegalAffairs page. Click here for screenshot.

August 20, 2009 - Today we released a new user friendly design for the Legal Services Page ,  which is now available to all law firms in the DirectLaw network of law firms. Each legal service offered by the law firm now appears on a separate tab, with detailed explanations of the scope of the legal service. Legal services offered by the law firm can be added or deleted and the fees charged increased or decreased at any time by the individual law firm using the Attorney Dashboard - the Administrative area that the law firm uses to manage their virtual law firm platform.

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DirectLaw  has announced that the Law Office of Kyle Rhodes, based in Fort Worth, Texas has subscribed to DirectLaw's virtual law firm platform to enable the firm to offer legal services over the Internet to Texas residents. The firm focuses on offering Texas, Wills, Texas Trusts, and other asset protection documents for a fixed price, bundled with legal advice.

This law firm is not a pure virtual law firm as Attorney Rhodes maintains a downtown Ft. Worth office for clients who prefer to meet with him face-to-face. This is a good example of what I call, "click-and-mortal" - combining a virtual law practice with an off-line physical practice.  The market research that we have conducted suggests that the most effective implementation of the "virtual law firm" concept is as an add-on to a office-based practice, as this combines the best of both worlds.

For more information visit the website. The firm utilizes Rapidocs, DirectLaw's web-based document automation system to enable clients to complete online questionnaires which generate documents ready for lawyer review and editing.  This is DirectLaw's third law firm launch in the State of Texas. 

 

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The Rimon Law Group, based in Israel, is a virtual law firm of lawyers who are members of various U.S. bars but who live in Israel and offer their services to lawyers and corporate legal departments in the United States at fees which are less than half U.S.-based legal fees.  The Group claims that its attorneys all have experience in complex legal matters and can deliver legal services that are comparable to legal services offered by U.S. based lawyers for much less cost because of the different cost structures between the U.S. and Israel. I think this is an interesting example of a law firm building a virtual business based on identifying a niche market and maximizing a comparative economic advantage.

With today's connectivity, some  kinds of legal work no longer require face to face interaction. This  results in a kind of economic leverage based on geographic location. It is interesting to note that the Rimon Law Group has as its clients other law firms and corporate legal departments, rather than working with clients directly.

To take this model even further, one could envision a virtual law firm of attorneys who are members of various U.S. state bars, and who are active members of those bars, but serving clients directly by telephone and email, and using virtual tools that are now being developed that facilitate the delivery of online legal services directly to consumers. These attorneys, for various reasons may live in locations that are lower in cost, than our major metropolitan areas, such as downtown Chicago or New York, and and are able to translate lower costs into reduced fees. Such lawyers don't have to live in Israel. They could live where ever it is possible to leverage a lower cost of living into reduced legal fees particularly, for the same commodity transactions that traditional face-to-face lawyers, with dedicated expensive offices, charge out at a much higher rate.

After all, I operate a virtual law firm in Maryland, where I am an active member of the bar, from my home in Palm Beach Gardens, Florida. Not a bad life style if you make it work.

I predict we will see many more "virtual networks" of lawyers emerge in the coming decade, some based in the United States, and some based in other parts of the world, serving not only client law firms in the U.S., but U.S. consumers directly.

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Stephanie Kimbro, a solo practitioner who operates Kimbrolaw.com, a virtual law firm in North Carolina, has been selected as this year's winner of the James Keane Memorial Award for Excellence in eLawyering. This award is given annually by the eLawyering Task Force of the Law Practice Management Section of the American Bar Association, a group which was founded by Jim Keane an active and long-standing member of the ABA/LPM section who died tragically from lung cancer several years ago. I am the present Co-Chair with Marc Lauritsen.

Ms. Kimbro's law firm is a completely virtual law firm that serves individuals and small business over the Web. Our group concluded that Kimbrolaw.com  met the criteria for the Award perfectly as it demonstrates an innovative online model for delivering services to the broad middle class. Clients access their own individual web space where they can consult with their attorney, have their documents reviewed, and conduct other legal tasks -- all online.

The Award will be formally given to Ms. Kimbro at the American Bar Association's TECHSHOW on April 2, 2009, immediately before the key note speech by Richard Susskind, who will discuss his new book: The End of Lawyers: The Rethinking the Nature of Legal Services.

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EssentiaLegal, based in Atlanta, Georgia, and founded by Robert Arrington, Latif Oduolo-Owoo, & Michael Mason, three alumni from large law firm practices in Atlanta, is a new style law firm, part virtual and part physical that is designed to serve the broad middle class with unbundled legal services. The physical office is located in a shopping mall for easy access, but the virtual component is powered by our DirectLaw Service and enables the firm to serve clients throughout the state of Georgia. Clients can complete Questionnaires either on-line, or within the physical office, which results in the instant creation of the first draft of a document or form, ready for the lawyer's review and further modification. Clients have the option of meeting with an attorney at their offices or relating to the firm on purely virtual basis through the MyLegalAffairs application created within the web site by our DirectLaw Web Service. I believe that this "click and mortar" strategy will be ultimately more effective than a purely virtual strategy because clients have the option of face to face contact with their attorney. "Click and mortar" refers to a business model that has both on-line and off-line components.

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We are exhibiting our DirectLaw Web Service at LEGALTECH in New York on February 2-4, 2009. This show is one of the largest legal technology shows involving over 450 legal technology vendors which attract over 13,000 participants. The show is at the New York Hilton at 1335 Sixth Avenue. We are Booth #1621 on Level II.  If you are planning to attend, please stop by for a demonstration of our DIrectLaw Service or just to chat about new developments in the delivery of online legal services. We will be introducing the latest version of Rapidocs, known as Rapidocs 4.0, which is our web-enabled document automation solution that operates totally within the web browser without requiring the downloading of an Active X control, Java Applet, or other software application.  Come see legal documents assembled in real time within the web browser.

Richard Cohen, CO-CEO of EPOQ, our sister company in the London, will also be in attendance and is up to date on new developments to de-regulate the legal profession in the UK and EPOQ's new mylawyer network of web-enabled UK law firms that serve consumers.

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Bernardo Granwehr has launched Iowa's first virtual law firm focusing on family law matters and wills at IowaLawyerOnLine. The law firm offers legal forms bundled with legal advice for fixed price. For example, Iowa Divorce Forms with Minor Children sells for $299.00 and a Will sells for $100.00. The divorce services are designed for pro se itigants. The web site is powered by our DirectLaw hosted service which includes the Rapidocs web-enabled document automation capability. Cllients complete on-line questionnaires which generate completed forms and documents ready for attorney review. The use of a web-enabled document automation capability keeps the cost of document  creation to a minimum enabling the attorney to spend time giving legal advice and additional custom-drafting at still make a reasonable fee for the time expended.

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 Myrna Arroyo, a solo practitioner in located in Baton Rouge, Louisiana, who specializes in estate planning, has launched a virtual law firm site that offers wills, living trusts, and other estate planning documents bundled with legal advice for a fixed price. The site is designed to provide an alernative to web sites like LegacyWriter, Do Your Own Will, LegalZoom, and Wills-Online, which offer legal forms without any legal advice. None of these legal form web sites offer documents that are specific to the State of Louisiana because of the particular nature of Louisiana law, which is based on the French Civil Code. Users are able to complete an on-line questionnaire which generates a completed legal document, ready for lawyer review, analysis, and further customization. Web enabled document automation enables saves time in document creation, enabling Ms. Arroyo to provide legal advice with the document for a fixed price. The site is powered by Epoq's, DirectLaw Web Service.

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There has been some recent press about the concept of the virtual law firm.  Craig Johnson has started a web-based law firm called Virtual Law Partners, P.C. The idea is to eliminate the overhead of a physical office or offices and to increase client collaboration over the Internet. I think this is a positive trend and indicates that lawyers are beginning to think about new ways of delivering legal services over the Internet. We would not call this firm, however, an instance of eLawyering, in the absence of digital applications that substitute for the labor of a lawyer -- such as web-enabled document automation. While these pioneering virtual law firms, may be saving the cost of a brick and mortar infrastructure resulting in lower fees to clients, their attorneys still work the same old way which is to bill for their time. Web-enabled digital applications on the other hand substitute for the time of an attorney and are truly disruptive as this time saving feature can result in more radical cost savings and translate into dramatically lower legal fees. We can envision that emerging virtual law firms will incorporate digital applications into their business models creating fixed price service packages for less complex legal services. At that time, these firms will morph into true providers of elawyering services.

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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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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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