Marketing On-Line Legal Services

A Recurring Revenue Business Model

LegalZoom® which started as a legal document web site based on individual transactions is gradually shifting towards a new business model based upon recurring revenue. Under the guidance of Premira, a private equity fund and now the majority shareholder of LegalZoom®, the company has launched a legal plan that adds legal advice to the purchase of its documents. Premira, is a specialist in helping companies create recurring revenue streams, it’s most recent success being Ancestry.com.

The Legal Service Plan business model is the future for LegalZoom®. A network of lawyers in every state has been created with capability of providing legal advice both for personal documents and business documents.

See for example the services now offered in the estate planning area:
http://www.legalzoom.com/personal/estate-planning/last-will-and-testament-pricing.htm

or in the small business area:
http://www.legalzoom.com/business/business-formation/llc-pricing.html

Here is the message by LegalZoom® about what you get when you purchase a Wills package bundled with legal advice:

“Membership includes: 30-minute phone consults with independent attorneys on an unlimited number of new legal matters. Attorney review of any completed LegalZoom documents. FREE revisions for as long as you maintain your membership. 10% OFF future LegalZoom purchases.

The price for the LegalZoom® estate planning package is $149.00, which includes a Will, Power of Attorney, and Living Will. This is a good value proposition for the consumer, if the client’s estate requires no complicated tax planning or has special circumstances that need to be incorporated into the documents. For a large percentage of U.S. consumers this set of estate planning documents will satisfy their needs.

I hear from lawyers occasionally that they make a business of cleaning up documents purchased from LegalZoom®. I don’t believe it. I think it is just defensive talk by lawyers who convince themselves that they offer a superior service, but at a much higher fee. Maybe this comment refers to documents purchased without legal advice and review, but I doubt it will apply to the enhanced service that now includes legal advice. Solos and small law firms will find it hard to compete against this value proposition unless they learn some lessons from LegalZoom®.

Lawyers can Learn from LegalZoom®

Solos and small law firms can learn from LegalZoom®. Ignoring Legalzoom’s approach to the marketplace will cause a continued decline in solo and small law firm income. [See Clio’s Legal Trends Report for support of this assertion ].

[See my old post at: What Lawyers Can Learn from LegalZoom®   I stand by these recommendations first made in 2010, but would add that adding the benefit of in-person personalization is a feature that LegalZoom can’t offer.]

Is the LegalZoom® Business Model Ethically Compliant?

A final note on the ethical compliance of the LegalZoom’s offering. It is well-established that a profit-making company can create and administer a network of attorneys, commonly known as a Legal Access Plan. See for example: CLC Legal Access Plans  and Legal Access Plans . These plans traditional provides legal advice services as part of Employer Assistance Programs and sometimes offer their plans directly to the public.

What is different about LegalZoom’s® advertising is the statement you can purchase “Best Value + Attorney Advice” which implies that you can purchase your legal documents with legal advice. This is an ethical violation as organizations that are not law firms, may never advertise legal services as part of the services they offer. Accounting firms can’t advertise legal services. Financial advisory firms can’t  bundle  legal services with their services. Banks can’t advertise legal services, or bundle legal services with their other services. So, on what theory can LegalZoom® advertise legal services in a bundle with their other legal services?

A network of law firms is prohibited from making claims that a law firm cannot make directly. Bar disciplinary bodies can’t censure LegalZoom® for this infraction, but they can go after the lawyers participating in their plan who expose themselves to disciplinary action by participating in a “branded” network not ethically compliant.

If I am wrong about this, LegalZoom® is invited to submit a comment explaining their theory of how this messaging complies with ethical rules that deal with advertising and representations about legal services.

Note: LegalZoom® is a trademark of LegalZoom, Inc.

AVVOAvvo – the world’s largest online legal directory –  now enables lawyers to offer legal services directly to consumers through their platform. Beginning last year, Avvo  offered the opportunity to consumers to get legal advice by telephone for a flat fee of $39.00 per telephone call.

Now Avvo has launched a “law store” that offers many fixed fee legal services from legal document review to no-fault divorce that ranges in price from $149.00 to $995.00. The legal fee is passed to the lawyer through the Avvo platform and Avvo charges the law firm a marketing fee for connecting the firm with a client. [For a detailed discussion of how this service works see Robert Ambrogi’s blog post on this subject at LawSites].

Today’s legal consumer’s want legal services from their lawyers on demand. In a previous post I discussed the coming Uberization of Legal Services a trend that now seems to accelerate with the launch of this service.

Consumers want from their lawyers:

  • fixed and affordable fees;
  • the opportunity to have more control over the relationship between lawyer and client;
  • purchasing just the legal services they want and no more- often called the “unbundling of legal services”;
  • speed and convenience;
  • transparency.

Solos and small law firms need help in identifying prospects and converting them to clients without spending a fortune on client acquisition.

The new Avvo Legal Service offers these benefits to both the consumer on the demand side, and the law firm on the supply side.

The Avvo Business Model

Avvo is evolving into a classic platform business model like UBER, Facebook, Airbnb, and eBay:

A platform is a plug-and-play business model that allows multiple participants (producers and consumers) to connect to it, interact with each other, and create and exchange value.” –Platform Thinking.

It’s important to note that the single most important attribute of a platform business: a platform does not partake in any transactions or interactions with its customers. This differs greatly from the traditional “pipe” model, where businesses ( e.g., the law firm) transact directly with customers, and and services flow from law firm to client. In the Avvo model lawyers still deal directly with their clients, but the entire relationship, including the payment of legal fees, is facilitated by the platform technology.

The platform business model can help with two major problems facing solos and small law firms: (1) liquidity; and (2) efficiency. By providing a large source of potential clients with legal issues that must be solved quickly, solos and small law firms can convert dead time into revenue. The platform can also provide on-line tools to law firms that enable them to provide legal services efficiently and still maintain reasonable profit margins. Solos and small law firms are challenged to develop these on-line tools and applications on their own. The platform provider can provide these tools at a cost which is much less than the firm can develop on their own.

We know from our experience in working with solos and small law firm’s through our own DirectLaw Virtual Law Firm Service that the pain point for many law firms is client acquisition.  Most law firms don’t have enough clients. Marketing directly to clients online —the pipe business model — has proved to be a challenge. Now comes AVVO with its huge base of consumer traffic. Avvo claims that over 8 million visitors to its web site a month with 50% having an urgent legal problem. Solos and small law firm can tap into this huge potential market with no up-front cost. Prospects and clients acquired through the Avvo platform through the consumption of fixed price legal services can result in building trusted relationships with clients that lead to the purchase of additional legal services outside of the Avvo platform. Law firms should think of the Avvo on-line fixed fee legal service as a way to market their full-service practice.

Solos and small should explore testing out the new Avvo Service as another low cost route to market. Lawyers typically wait until early adopters in the legal profession try out a new service or technology first before leaping in with both feet. Here is a good example where being early, getting good reviews, and becoming experienced with providing services over the Avvo platform can cause higher platform visibility resulting in more powerful market positioning.

The unberization of the legal professionThe legal profession will not be immune from the rise of the uberized economy. Consumers want to purchase only the legal services they need. This means that the trend towards offering “unbundled” or “limited legal services” will continue to accelerate as the most economical way for consumers to purchase legal service is by the “task”, rather than the hour.

Think of “task rabbit for legal services” – legal services at the click of a button on your smartphone.

The new virtual marketplaces connecting lawyers with clients for the purchase of specific legal tasks will also accelerate this trend. These legal marketplaces are a response to the inefficiency of bar-sponsored legal referral programs (the subject of another blog post to come), and the desire of consumers to have a more transparent way of selecting attorneys to solve their legal problems. The last few years has seen the ascendency of these legal marketplace platforms.

To name just a few of these new legal marketplaces, look at:

  • Avvo  – “Get legal advice from a top-reviewed lawyer on the phone – $39.00 for 15 minutes.”
  • Bridge.US – “Top attorneys and easy-to-use software that make immigration delightfully simple”
  • DirectLawConnect – “FInd a fixed fee online lawyer in your state now.”
  • Fixed – “The easiest way to fix a parking ticket”
  • Hire an Esquire – “Legal staffing redefined online.”
  • LawDingo – “You won’t believe how simple and affordable it is to get a lawyer;s help.” “$50 for a telephone consultation. Other projects for a fixed fee.”
  • LawGo – On Demand lawyers for a fixed fee in personal and small business matters.
  • LawGives – “Get free quotes and consultations from trusted lawyers in 100+ cities”
  • LegalHero – “Law Done Better. Experienced attorneys for your business at clear, upfront prices. ”  “No hourly rates. No retainers.”
  • LawKick – “Find the right lawyer at the right price”
  • LawNearMe – “Law Near Me offers an attorney referral service to help you find the legal representation you need in a variety of areas.” “ZocDoc for lawyers”
  • LawZam -“Free legal consultations by video-conference.”
  • LegalZoom – “Find an attorney you can trust for your family for $9.99 a month”
  • PrioriLaw – “lawyers hand-picked for your business.”
  • RocketLawyer – “Legal Made Simple”
  • SmartUpLegal – “Quality Legal For Startups and Business.”
  • UpCounsel – “Hire a great attorney for your business. Fixed fee projects”

Some seek to link consumers with lawyers who charge their regular hourly rates, but the marketplaces that will scale are those that offer limited legal services for a fixed fee, ideally powered by technology to keep legal fees low. These new vertical marketplaces will serve what Richard Susskind has called, “the latent market for legal services.”, but in the fullness of time, the “limited legal services” approach will move up the value curve serving small business and eventually larger business entities and more affluent clients.

Not all will survive as many cannot generate the traffic to justify the fees charged to lawyers or consumers to participate in a particular platform. Survivors will be those platforms that can generate consumer traffic and which can scale their offerings. A likely winner could be AVVO as it leverages its huge consumer traffic and large lawyer data base into delivering legal services for a fixed fee.

Some larger law firms will adopt this independent contractor labor model using contracted labor to perform tasks for their clients. This is already happening in the United Kingdom. See: Lawyers on Demand; RiverviewLaw; and Peerpoint from Allen & Overy

The services that will scale the most will be smart legal software applications that can do a task for the fraction of the fee that a lawyer can charge for the same work.

As the idea of offering limited legal services goes mainstream, powered by these new marketplaces, consumers will benefit through more affordable, accessible, fast, and transparent legal services.

The legal profession, particularly solos and small law firm practitioners, will not benefit as much as the consumers they serve. Here are some of the negative consequences:

  • A downward pressure on legal fees;
  • More competition for solos and small law firm practitioners;
  • Lawyers will have less or no social structure to support collaboration and cross-communication with peers;
  • Newly admitted lawyers will lack the training and professional development structure for them to really learn how to practice law. (as law schools don’t really train lawyers to practice law).
  • Less organizationally sponsored fringe benefits for lawyers.
  • Loss of control of a client base, as clients are attracted and owned by the new legal marketplaces;
  • Reduction in the size of the legal profession as it becomes harder to make a living as a lawyer, with a consequent reduction in the number of law schools – particularly those that turn out lawyers for solo and small practice but continue to teach the a purely doctrinal approach to law and law practice.

Recent litigation in California where California judges have ruled that the issue of whether drivers for Uber and Lyft are independent contractors or employees will have to be decided by a jury suggest that the rules that apply to the new ‘sharing economy” are not so clear. It will be interesting to see at some point in the future whether a group of lawyers -so-called independent contractors- might sue their platform provider or an AxiomLaw, on the theory that that the platform that they are using exercises so much control that they are really employees and entitled to the benefits of being an employee. See generally:  1099 vs. W-2 Employee Classification Infographic from Hire An Esquire.

Surely, the legal services industry is continuing to evolve driven by Internet-based innovations.

In a previous post, I discussed the North Carolina’s Bar fight against an amendment to the definition of the practice of law that stated:

“(b) The phrase “practice law” does not encompass any of the following:” … (2) the design, creation, assembly, completion, publication, distribution, display, or sale, including by means of an Internet Web site, of self-help legal written materials, books, documents, templates, forms, computer software, or similar products if the products clearly and conspicuously state that the products are not a substitute for the advice of an attorney. “

The moving force behind this amendment to the definition of the practice of law is LegalZoom which is also engaged in litigation with the North Carolina Bar over the same issue

For now, the North Carolina Bar has won this battle. Mobilizing the entire lobbying energy of the North Carolina Bar, the proposed amendment was side-tracked into Committee for further discussion and will die there in this legislative session.

In a confidential communication to bar members, one of the officers of the bar stated that:

“As I am sure you know, LZ has sued the State Bar in an effort to prevent the State Bar from continuing its ongoing efforts intended to halt LZ’s efforts to engage in the unauthorized practice of law.

I think it is important to understand that not all of the products currently offered by Legal Zoom violate the existing prohibition against the unauthorized practice of law. Merely producing and selling legal forms does not violate the prohibition against UPL. Consumers have always been able to purchase legal forms from bookstores, office supply stores and other outlets. The fact that LZ, and others, offer consumers the opportunity to purchase such forms over the Internet rather than from a brick and mortar business does not place them in violation of the prohibition against the unauthorized practice of law.”

“However, LZ’s use of “decision trees” and other such algorithms to create legal documents tailor-made to the individual consumer does present significant concerns and the State Bar has endeavored to prevent LZ from engaging in these activities.”

Talk about a “luddite” mentality — now North Carolina Bar wants to prohibit interactive legal software on the theory this is same as getting as advice from a lawyer. Maybe in the fullness of time getting legal advice and legal forms will be better than getting services from a lawyer. So what is the real justification — full employment for lawyers. The Bar argues that they are protecting the interests of the consumer. But  lawyers in North Carolina only serve the to 25% or so of the population with the remaining the 75% left to their devices. The argument doesn’t hold up. You can’t argue that you are protecting the safety of consumers when you are only serving a small proportion of the addressable market.

The North Carolina Bar has an answer to this.  Realizing that total resistance will expose the Bar to liability (Federal Trade Commission, U.S. Department of Justice, class action suits),  the Bar has proposed this amendment to the definition of the unauthorized practice of law.

Apart from the very narrow scope of this exception, the language kills innovation and access to justice for consumers who can’t afford lawyers is this language:

“The provider does not disclaim any warranties or liability and does not limit the
recovery of damages or other remedies by the consumer; “

This language would apply to any self-help legal materials including self-help law books, legal software on CD/ROM, and web-based interactive legal forms. I don’t know of any legal software publisher that would waive a disclaimer of warranties of liability.

Would TurboTax withdraw its Tax and Legal Products from retailers?
Would Nolo withdraw its self-help books from North Carolina?
Would web services such as http://www.completecase.com stop operating in North Carolina?
Would Amazon stop selling Quicken WillMaker?
Will LawHelpInteractive withdraw its interactive child custody forms?
Will ShakeLaw withdraw its products from North Carolina?
Would our company (SmartLegalForms), close down our North Carolina Divorce Web Site?

An argument can be made that self-help materials (books, software) are publications, and therefore this requirement to waive a disclaimer of liability is a prior restraint on speech and also an attempt to restriction competition. This requirement is a law suit waiting to happen.

Another requirement of the proposed legislation is that:

“The provider does not provide any individualized legal advice to or exercise any legal judgment for the consumer; provided, however, that publishing general information about the law and describing the products offered, when not done to address the consumer’s particular legal situation and when the general information published to every consumer is identical, does not constitute legal advice or the exercise of legal judgment.”

What does this mean? If the North Carolina Bar thinks that interactive software is a form of legal advice, as it appears to be the case, then can’t this language to be interpreted to mean that all interactive legal software that generates a set of legal forms in response to a consumer’s particular set of facts is this practice of law?

The proposed amendment at the beginning of this post is almost identical to the exception to the definition of the practice law passed by the Texas legislature almost 20 years ago. There has been apparently no harmful effect to consumers from this exception to the practice of law. The burden is on the North Carolina Bar to demonstrate with empirical evidence that consumers are harmed by these practices and publications.  The real justification is protecting the incomes of North Carolina lawyers afraid of losing market share to alternative providers.

 

Reinvent Law silicon Valley 2013ReinventLawSiliconValley is happening next Friday, March 8 at the Computer History Museum in Mountain View, California. The brain child of Professors Daniel Martin Katz and Renee Knake, co-founders and co-directors of the Reinvent Law Laboratory at Michigan State University Law School, the event promises to be quite a bash. The event is free, but attendance is limited to 400 participants and you have to register to get in. Over 40 innovators, founders, policymakers, venture capitalist and other change agents interested in reforming the legal services industry will be speaking in 6 – 10 minute presentations.

Think of this as a TED Talks event about innovation and change in the legal industry– a crash course about disruption in the legal profession.

Here is the full detailed schedule with the speakers and the titles of their presentations.

Some of the speakers I am especially looking forward to listening to are:

This is just a sampling of the range of talks at ReinventLawSiliconValley – 2013.

Private Investment in Law FirmsYours truly is giving a talk on Private Investment in US Legal Services: New Business Models.  I am interested in how to get private capital into law firms, given the restrictions of ABA Professional Rule 5.4 which prohibits non-lawyers from taking an equity interest in a law firm. Are there ways of getting around this rule? What kind of law firm structures can be created that enable private equity investment? Is it wise to enable private investment in law firms? Will it ever happen in the United States given the present position of the ABA and  state bar associations? What can small and medium size law firms do to access capital to make them more competitive? Are Clearspire and AxiomLaw ethically compliant models that can be replicated?

Ray Abyhanker, the entrepreneur lawyer behind the Trademarkia web site,  the highest traffic legal sites on the Web, opened a kind of Apple Store for legal stuff and other stuff (self-help law books, non-Apple tablets, tablet accessories, etc), right across from the Apple Store on University Avenue in Palo Alto. [See previous post on this company at: May the LegalForce Be With You! ]

Beautifully designed in a historic building the idea is to provide an  "third place" where lawyers can meet and mingle with potential clients, provide community law classes, and generally demystify the law by creating an accessible and friendly legal environment.

The ultimate goal is to create a branded network of law firms that promises a high value client experience for the broad range of consumers and small business that are also attracted to pure online ventures such as LegalZoom and RocketLawyer, but want something more.

LegalForce Store in Palo AltoThere is a lot to be said for a "click and mortar" strategy which involves lawyers working with clients in their offices, and interacting as well online,  but also meeting and interacting in a neutral physical space that is a retail environment. Sort of like having a  "Genius Bar" for legal problems where you can ask a question and get a quick legal answer or get assistance in knowing how to start out to solve a legal problem.

Where do I start? Do I need a legal form or a self-help law book? An "unbundled"  legal service, or full service representation? What’s the lowest cost solution to my legal problem?

The LegalForce lawyer store staff call themselves  "Concierges" and I believe that is an apt title. We need more legal concierges, on the web, and in the real world.

Legal services, particularly the more complex the legal service, depends on the presence of a skilled trusted adviser. Sometimes the lawyer presence can be virtual, but sometimes the legal problem requires a face to face meeting with a client so that a thorough exploration of the facts of the case can be fully understood.  For lawyers, the ideal strategy is one that combines an off-line practice with an online presence and a brand that expresses both dimensions of the practice.

 

The term "Click and Mortar" is attributed to David Pottruck, then CEO of Charles Schwab Corp, in a July, 1999 speech at a conference sponsored by the Industry Standard. Pottruck is quoted as saying:

 "Schwab’s vision has always been designed around customer needs and the company is engaged in constant reinvention to stay ahead of these powerful investors. Schwab believes that it is the combination of people and technology that investors want — a "high-tech and high-touch" approach. As such, Schwab is redefining the full-service business around the integration of "clicks and mortar."

Pottruck subsequently wrote a book about the strategy.  A brokerage firm is more like a law firm, than a law firm is to a ecommerce web site with no human touch. It might be fine to buy your shoes online from Zappos, but I am not so sure that in the fullness of time will clients want a purely virtual experience with their law firms. As someone who runs a company ( DirecttLaw) that provides a virtual law firm platform to law firms, and has operated my own virtual law firm since 2003,  I have experienced both the advantages and the  disadvantages of a pure legal service without any human meeting.

By linking together an online experience with an off-line, real work experience, Abyhanker may have come with a legal service concept that is unique. Trademarkia is being re-branded under the LegalForce brand and recruiting  law firms for the network, first in California and then nationwide has begun..To be clear this is not a franchise, but more of a marketing network with productivity benefits for its law firm members.

Disclosure: Our company created an interactive legal form portal under the LegalForce brand and a "legal form kiosk" for the store.

Burton-LawBurton-Law, a virtual law firm based in Ohio and North Carolina has been selected by Law Technology News for the most Innovative Use of Technology in a Small Law Firm. This small law firm is a good case study on how a law firm can leverage virtual law firm technology to serve a diverse group of clients over a wider geographical area.

We are proud that the Burton-Law has selected DirectLaw as their client portal with embedded document automation capabilities. Burton-Law also uses CLIO as their web-based practice management solution which integrates seamlessly with DirectLaw through the use of an API.

Stephanie Kimbro,  formerly co-founder of Virtual Law Office Technology which was acquired by TotalAttorneys several years ago, helped make the decision to adopt DirectLaw as Burton-Law’s virtual law firm platform. Stephanie is no longer with TotalAttorneys.  Stephanie joined Burton-Law last March to expand their operations in North Carolina. Stephanie is a pioneer in the development of the virtual lawyering concept, having written the book  on the topic.

Consmer Law RevolutionStephanie has also just released a new ebook on the Consumer Law Revolution which is the best description and analysis of online marketing platforms that I have seen. You can download it here.

Stephanie also blogs at Virtual Law Practice, and you can follow her on Twitter @StephKimbro.

Legal Referral websitesI have noticed recently the launch of many lead generation Web sites for lawyers.

In a previous blog post  , I noted that lead generation sites for lawyers as one category of legal start-ups were increasing and entering into an already crowded market space. By a "lead generation Web site" I mean a third party Web site whose primary purpose is to provide qualified leads to law firms. The site may be free to users, or sell legal advice to users for a fixed fee, but the purpose is still to generate leads for lawyers. A "lead generation web site" is typically what I call a multi-sided platform – one side involves users looking for a lawyer,  and other side are the providers who offer legal services. The lawyers who subscribe to the Web site typically pay a "marketing" or "advertising" fee to get access to the leads generated by the Web site.

More mature legal generation sites are expanding their features and depth of offerings TotalAttorneys recently received of infusion of $15 million in new venture capital from Bain Capital Ventures of Mitt Romney fame. A new CEO, Paul Ford, with expertise in developing lead generation Web sites is in place providing leadership.  TotalAttorneys now gives away their Web-based practice management system for a $1 a month, to attract attorneys to their more expensive legal generation services.  At $1.00 a month this is really good value for a web-based practice management application. However, for TotalAttorneys this web-based practice management solution that was originally developed by Stephanie Kimbro, now with Burton-Law,  and her husband and acquired by TotalAttorneys, is now just a marketing strategy for their lead generation services.  TotalAttorneys now claims that it is," the leading US company providing customer acquisition for lawyers"

I am not sure that ExpertHub, owned by InternetBrands, which acquired Nolo last year,  would agree with this assessment, with its broad network of practice specific legal sites now being reinvigorated with content from Nolo. [ See previous blog post on this acquisition ]. 

 

Virtual Law firm Success Factors

Continue Reading New Law Start-Up Lead Generation Sites: What Lawyers Need to Know

AttorneyFee.com is partnering with FindtheBest.com to increase transparency of lawyer’s legal fees.

FindTheBest is launching a lawyers comparison engine, on May 4, 2012, which allows consumers to find, narrow and compare thousands of US-based attorneys by name, education, specialty, bar admission information, pricing, contextual charts and contact information. The combination of transparent data from AttorneyFee, and the interactive presentation of the information—organized by FindTheBest’s comparison engine—will allow consumers to compare their options when it comes to finding the right attorney at a fee that the consumer can afford.

The lawyers comparison engine will allow users to:

  • Find attorneys in their area with a specific specialization
  • Narrow options with smart filters
  • Compare options side-by-side
  • View key stats (like average years of experience and average price per specialty) within a surrounding context so users can see if they’re getting a fair deal
  • Find answers to frequently asked questions
  • Contact lawyers with one click

 

FindtheBest was started by Kevin O’Conner whose last company (DoubleClick) was sold to Google for 3.1 billion and whose first company (Internet Security Systems) sold to IBM for $1.4 billion. This is a real win for the AttorneyFee.com team.

Recently several Web sites have emerged that enable consumers to bid for legal services. Examples include: ExpertBids and  Shpoonkle. (Don’t ask me how to pronounce  it). They all work pretty much the same way.

You submit a description of your project or the service you want, your location and your estimated budget. You create a secure account with a user name and password. Your service request is then posted or published to a lawyers who have registered for the service so they can bid on your work. When a lawyer bids for your work, you receive an email (each bid includes a rate, a description, and the lawyer’s profile, rating and client reviews). When the lawyer bids, whether bid by the hour or fixed price, you receive an email which includes a rate, a description, and the lawyer’s profile, rating and client reviews. The process gives you options and a basis for comparing how different lawyer;s will submit bids and pricing for similar work.

The process is always free to the potential client. Once you are connected to a lawyer you can continue your conversation either online or off-line. The sites enable you to communicate with the lawyer online directly, but often you don’t get any free legal advice or any legal service until you accept a retainer agreement and the lawyer/client relationship is established.

For law firms that have learned how to offer legal services for common legal matters for a fixed fee, these bidding sites could be another channel to the consumer and potential clients. These law firms, often virtual law firms, are low-cost producers of legal services, and can out bid more traditional legal firms without sacrificing quality or their profit margins.

Many of these law firms offer what are called, “limited legal services”, which enable these law firms to offer a low cost solution to consumers, but often consumers have no understanding of this concept. See for example the law firms listed in the MyLawyer.com Directory of  Virtual Law Firms. We think that the bidding sites should have articles and information on their web sites describing the “limited legal service” concept as this would be way to educate consumers about another way to cost effectively buy legal services.

A problem that we see with the bidding sites that we reviewed is that there is no easy for the consumer to describe that they want “limited legal services“, as distinguished from traditional legal services. There are options for bidding by the hour, or by the project, but no option for limiting the scope of representation. “Unbundling legal services“, is a relatively new idea, but many states (more than 35) have already passed amendments to their Professional Rules of Responsibility that enable law firms to offer “limited legal services” as long as the retainer clearly defines the scope of representation.

I think this is a critical gap in the way the operators of these site understand how middle class consumers want to purchase legal services. I also think that there is likely to be a disconnect between what the consumer bids for a service, and what they law firm delivers for the bid price. Without a clear specification of the scope of services, there is bound to be miscommunication and confusion.

It is too early to predict whether these “bidding sites” will survive. In the “dot-com boom and bust” era, there were several experiments with lawyer bidding, but all the sites failed because they could not generate enough volume to support their overhead structure.

Susan Cartier Liebel, the President of Solo Practice University has written a good blog post analyzing these sites,  that is worth reviewing by consumers who are interested in this approach to securing legal services.

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