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client-centricThe American Bar Association Standing Committee on the Delivery of Legal Services, with the ABA Legal Access Job Corps Task Force and the Institute for the Advancement of the American Legal System (IAALS) is convening a national conference in Denver, Colorado on August 14-15, 2015  titled: Client-Centric Legal Services: Getting From Here to There.  The conference will have special value to practitioners who provide personal and small business legal services, bar leaders, judges and court administrators, legal educators, Access to Justice Commission members and staff, and incubator directors and law school clinicians. The focus of the conference is to explore new law firm business models that can enhancement engagement, re-define lawyer value, and pivot practitioners into 21st Century problem-solvers.

So what are client-centric legal services? 

The concept of client-centric legal services is part of a consumer revolution that puts the purchaser at the center of a commercial transaction shifting power from supplier to consumer. Power in the legal profession has always been on the supply side, but the legal profession is not immune from the consumer revolution and the demand by consumers for more transparency, information,  and control over the lawyer-client relationship. Consumers want fixed fee pricing so they can control their legal expenses and when possible be a co-producer of legal services to keep legal fees reasonable and manageable. This translates into “unbundled legal services” or “limited legal services”, powered by online delivery systems.

Internet based applications that either enhance the client’s understanding of their legal rights, or enable them to represent themselves with the assistance of an attorney, are examples of client-centric legal services.

A short list would include:

A law firm web site that consists of information only about a lawyer’s practice and biographies of the law firm’s lawyers is not client centric because it is solely focused on the supplier and provides no tools that empower the client as consumer.

Here are good examples of client-centric law firm web sites: The Rosen Law Firm in North Carolina – a family law firm; and The Baker Law Firm – an estate planning firm also in North Carolina.

Large law firms and their corporate clients are not immune from these developments as Big Law seeks to provide tools that enable corporate legal departments to service their internal clients more effectively.

For example Seyfarth and the Littler, Mendelson law firm  are developing expert systems applications on the NeotaLogic platform that can be used by their clients to more efficiently access legal advice at low cost. See Human Resources Compliance Application.

Prof. Stephanie Kimbro, author of The Consumer Revolution: The Lawyer’s Guide to the On-Line Legal Marketplace   predicts that:

“The client-centric law firms that are transparent in their business practices and provide communication and delivery methods that clients expect from professionals in any industry will be the firms that survive in our quickly changing legal marketplace.”

To learn more about creating client-centric law firms, register for the Denver conference, here.

FTC Disclosures:
I am a speaker at the ABA Denver Conference and I am also a liaison member of the ABA Standing Committee on the Delivery of Legal Services, and the company I am CEO of- DirectLaw – provides a virtual law firm platform for solo and small law firms that enables these firms to deliver legal services online.

Ifedarbt’s no secret that the Federal court system is broken, Understaffed and overworked Federal U.S. District Court judges rarely hold trials any more – encouraging the parties to settle and keep their conflicts out of the Federal courts. Trials when required by the parties, take forever to be scheduled. Justice delayed, is no justice at all.

Traditional arbitration can be arbitrary.

A clause which often appears in an agreement to arbitrate states that:

“The Arbitrators and Umpire are relieved from all judicial formality and may abstain from following the strict rules of law. They shall settle any dispute under this Agreement according to an equitable rather than a strictly legal interpretation of its terms.”

Traditional arbitration in commercial disputes claims to offer benefits of speed and cost lower than a jury trial. But if the outcome of an arbitration is often arbitrary, the benefits of traditional arbitration are limited.

Now comes FedArb – a new hybrid model, part private court, part arbitration tribunal as an alternative  to traditional arbitration.

Founded by  Abraham D. Sofaer, a retired Federal Judge,  FebArb provides as arbitrators  —  retired Federal Judges  with a new set of rules modeled on the Federal Rules of Civil Procedure . These rules, and FedArb reliance on experienced judges, and commitment to follow precedent, bring principled decision-making back to the arbitration process.

Based in Palo Alto, the heart of Silicon Valley, FedArb provides its services through an on-line platform that is designed to ensure that all of the parties stick to deadlines and that disputes are resolved as quickly as possible. Fixed fee arbitration is also an option that is designed to limit the cost of resolving complex disputes.

FedArb has been growing slowly as traditional arbitration organizations are entrenched in arbitration contracts and corporate general counsel are risk adverse and are reluctant to try alternatives, despite the apparent benefits in speed of resolution, lower costs, and the potential for more just and principled outcomes.

Innovations in ADR are likely to move faster in the consumer market space. Modria demonstrates that there is a huge demand for speedy resolution of disputes outside of the courts, and that efficiencies and speed can be greatly enhanced by moving the entire process online.

The future of dispute settlement and conflict resolution is likely to be outside of the court system as innovators such as FedArb and Modria find new ways to resolve conflicts expeditiously and at a lower cost than traditional methods of dispute settlement.

 

*Disclosure- the author of this block post, Richard S. Granat, is a shareholder in FedArb.

 

Center for Law Practice TechnologyThere has been much discussion lately on whether law schools are training lawyers for 21st century law practice. At the ABA Annual Meeting this week in San Francisco a Presidential Task Force on the Future of Legal Education is scheduled to report out its recommendations.. In my last blog post, I identified 13 law schools that were making a commitment to training law students in legal technology and law practice management. At one point in my career,  I taught these subjects at several law schools under the guidance of Gary Munneke., — whose untimely death last November has created a vacuum that will be hard to replace.

My own bias is that in this digital age, to be a competent lawyer requires an understanding of legal practice technology. The ABA supports this view as at last year’s mid-year meeting the ABA House of Delegates  acting on the recommendations of the ABA 20/20 Commission, voted to amend the Model Rules of Professional Conduct to make clear that lawyers have a duty to be competent in technology. Specifically, the ABA voted to amend the comment to Model Rule 1.1, governing lawyer competence, to say that, in addition to keeping abreast of changes in the law and its practice, a lawyer should keep abreast of “the benefits and risks associated with relevant technology.”

Center for Law Practice TchnologyI have been looking for an opportunity to getting back into teaching law practice technology and now have the opportunity with Stephanie Kimbro to create a new Center for Law Practice Technology with the backing of Florida Coastal School of Law in Jacksonville, Florida.

Stephanie and I will become Co-Directors of this new Center. and the plan is to develop a series of online courses for law students nationwide  that will lead to a Certificate of Law Practice Technology and Management. The first courses will be offered in January, 2014.

The Center will also be a laboratory for developing and testing new forms of online legal services.  Students will have the opportunity to experience virtual law firm technologies and other emerging technology tools such as legal expert systems, document automation technology, and legal applications that are designed to increase access to the legal system. You can read more about this new Center here.

AxiomLawSome colleagues asked me that other day if I knew whether Axiom is a law firm. I said I didn’t really know, so I decided to find out. There has been much buzz lately about AxiomLaw .  The company recently raised $28,000,000 in private equity funding, after an initial round of $5,000,000.  Axiom has recently launched a new Web site call ReThinkLaw  – a kind of forum Web site that is designed to "provoke thought and drive innovation in the business of law—leading to greater efficiency and positive change for the benefit of clients, firms and lawyers alike."

The AxiomLaw Web site and ReThinkLaw site makes it look like Axiom is a law firm.

For example:

AxiomLaw sounds like a law firm and has a domain name that makes it look like a law firm. When it describes itself it states that "it is not your father’s law firm" or it is  "a new model legal services firm."

But its not a law firm at all. The company’s real name is Axiom Global, Inc.,  It is organized as a "C" corporation, and incorporated in the State of Delaware, just like any other company. (This explains of course how it can have investors).

So if AxiomLaw is not a law firm – what does it actually do? It targets the General  Counsel’s office of large corporation’s and provides the following services:

  • It’s a high priced placement firm assigning lawyers to work for in-house General Counsel;
  • It’s an outsourcing firm working directly for General Counsel of major Fortune 500 corporations;
  • It does "projects" directly for General Counsel of major Fortune 500 corporations.

Should any one care whether AxiomLaw is a law firm or not?

  • Prospective attorney recruits might care whether they are being recruited by a law firm or something else;
     
  • Prospective customers should understand that only a company with an in-house counsel who is a member of the bar where the legal matter is being conducted can qualify for AxiomLaw’s services;
     
  • If you don’t have an in-house counsel, then you can’t use Axiom’s services. Not being a law firm. Axiom cannot provide services to the public (individuals or organizations) directly;
     
  • Prospective corporate customers should understand that the traditional lawyer-client confidentiality privilege does not apply. Any confidentiality must result from the relationship between the company’s general counsel and their outsourced lawyer workers by virtue of the agreement between Axiom and the corporation customer – but I wonder if that is sufficient.
     
  • Competing law firms might care that Axiom suggests that its services are "legal services" competitive with the services of other law firms, when in fact they are are just "services" by definition. Actually contracted support services by in-house counsel. Otherwise Axiom would be violating Unauthorized Practice of Law (UPL) regulations in every state. Since Axiom is not really a law firm it can make claims about its services, that are not subject to bar regulation. Some of the statements that Axiom makes about its services, a law firm is prohibited from making because it would be in violation of the advertising and disclosure rules which are operative in every state.
     
  • Law firms are prohibited from solicitation. AxiomLaw is not subject to the same constraints.
     
  • Maybe state bar association officials should be concerned that the location of the disclaimer on the AxiomLaw web site that states that Axiom is not a law firm and cannot give legal advice. It is difficult to find. . I finally found it here.  and here.

Is AxiomLaw a positive development for the legal profession? Who knows?

General Counsel of major companies seem to think so. AxiomLaw is demonstrating that certain kinds of services can be delivered at a much lower price, without compromising quality. By enabling corporate counsel to get done certain kinds of legal work that ordinarily would be provided by outside counsel at a much higher price, Axiom has opened up a major market be simply segmenting the kind of work that can be done more efficiently in-house with help from Axiom.

It seems to me, however, that an in-house counsel assumes the risk of malpractice when they contract with Axiom. Axiom is not a law firm so it can’t secure a law firm malpractice insurance policy. Moreover, the supervisor of the legal work is not Axiom, (technically it can’t be), but in-house counsel. When in-house counsel contracts with a company like Axiom they give up the assurance of quality legal services and accountability that they get from a traditional law firm. 

In checking directly with Axiom on this point, Axiom states that:

"The individual lawyers don’t carry their own malpractice, Axiom maintains a lawyer’s professional liability insurance policy that provides coverage for all Axiom attorneys, regardless of W-2 or independent contractor status. Almost all of our lawyers in the US are W-2 employees. Axiom does not, because we cannot, have access to or supervise the substantive work of our lawyers."

One likely impact of these developments is to destabilize the business model of the Big Law firms by sucking out the more routine work from big law firms which results in decreasing overall profitability.  As the Axiom’s of the world expand their services and their reach,  there will be less work for the large law firms resulting in a shrinkage of the market share of traditional law firms. (real law firms!). The firms that are left standing will offer the most high-end legal services but will probably raise their fees as they will be the only game in town as a supplier of complex legal services where law firm accountability is a necessity.

Do GC’s have any interest in a vibrant independent and expanding legal pr
ofession, or do they prefer a world where there will be less traditional law firms offering their services at higher fees?

Two final questions for consideration:

1. Should AxiomLaw be more transparent on its Web site about what kind of an organization it really is by making clear that it is not a law firm, and should it avoid comparisons with traditional law firms?

2. Maybe non-law firms like Axiom, with their access to capital and superior management and technological resources, should be able to offer legal services like a real law firm, but just make these new organization’s subject to the Rules of Professional Conduct like any other law firm.

Of course, private investment in a law firm is prohibited by Model Rule 5.4, but maybe it’s time that state bar associations recognize that there is a new kind of organization moving into the legal industry any way, so why not simply subject these new players to the same regulatory scheme as traditional law firms?

Would that level the playing field? Would that provide better consumer protection for both individual consumers and corporate purchasers of legal services?

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.

Legal Documents On-LineThe American Bar Association’s eLawyering Task Force has compiled a draft set of best practice guidelines for legal document providers, which can be downloaded here*.  

An increasingly popular – and controversial – category of service providers are those that supply customer-specific documents over the Internet, using interactive software and/or human resources, without purporting to be engaged in the practice of law. There are literally hundreds of these legal documents Web sites. More of these legal document Web sites launch every month, of not every week on the Internet.

 

These Web sites include for example:

The Task Force believes that there are common principles that ought to guide these legal document sites, and practices that consumers should be able to expect.  The  eLawyering Task Force  also recognizes that consumers have different levels of knowledge in meeting their documentation needs.  Some believe, for instance, that it is simply a matter of getting “the” right form, and pay little attention to careful drafting and appropriate execution.  Others have a more sophisticated understanding of options and implications. Nevertheless there should be baseline expectations that meets the needs of all kinds of users. The goal is not to issue a "seal off approval" of these legal document Web sites. The objective is to encourage these Web sites to use acknowledged "best practices" in the development and delivery of their services.

These guidelines do not take a position on whether certain document services may constitute the unauthorized practice of law in certain jurisdictions if not performed by a licensed attorney, other than to urge providers to know and observe applicable law on that thorny subject.

The primary purpose is to aid consumers in making informed decisions about what they are buying.

Comments on these Guidelines are invited. They can be submitted on the eLawyering Task Force ListServ which any lawyer can join, Click here.

 

Hyatt Regency Incline Village Lake Taho, CaliforniaThe eLawyering Task Force is having a Quarterly Meeting at he Hyatt Regency Lake Tahoe Resort, Spa and Casino on Friday, October 19, 2012 between 9:00 – 11:00 A,M,

This is an open meeting and individuals who want to submit comments on these Guidelines are invited to attend and participate.

Additional Conference details can be found here.

 

 

*(Disclosure: I am Co-Chair of the eLawyering Task Force. The Co-Chair of the Task Force is Marc Lauitsen, of Capstone Practice Systems, who is providing leadership to this project.)

——————————————————————————————————————————

In accordance with the   FTC 16 CFR, Part 255: "Guidelines Concerning Use of Endorsements and Testimonial in Advertising" I am disclosing that I have a material connection to some of the companies referred to in this Post. I am the Founder/CEO of  DirectLaw, a virtual law firm platform provider and SmartLegalForms, a web-based legal document provider. The opinions expressed here are my own. I did not receive any compensation from any source for writing this post. DirectLaw sponsors this blog by paying for the costs of hosting.

 

 

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

Just Answer is a question and answer platform that provides answers to users questions for a flat fee of approximately $30.00 per question. It turns out that one of the fastest growing categories within JustAnswer is the answering of legal questions by lawyers.  

Here are other the JustAnswer terms and conditions that apply to lawyers that participate in this service:

"Experts in the Legal categories must be attorneys licensed to practice law, and be
in good standing in at least one jurisdiction in the United States or foreign
country. Such Experts shall provide general information only, such as providing
descriptions of general principles of law, and shall not provide legal advice. In
responding to questions, Experts in the Legal Category shall not apply their legal knowledge or skills to resolve or advise on the Customer’s specific factual circumstances described in the question, such as by proposing a specific course of action (other than advising the User to seek the advice of an attorney licensed to practice in the relevant jurisdiction). Experts in the Legal Category shall not form an attorney-client relationship on the Site."

To be qualified to answer questions as a lawyer within the JustAnswer platform, the lawyer has to take a test in the practice area and meet other qualification standards.

Disclosure: I answer legal questions on the JustAnswer.com website in my capacity as an attorney and a member of the Maryland Bar.

The Website is very well executed. Users can select from a panel of lawyers that are online at the time that the question is asked. You can name your price – indicate what you are willing to pay for an answer. You can see the credentials of the lawyers and their track record in answering questions, communications are secure and confidential, and the user can indicate the urgency of the answer, and the level of detail required. Answers are 100% guaranteed. If you are not satisfied you get your money back. You can select the State that you are located in, so answers can be state specific. Most questions are answered within minutes.

I have yet to see a state bar association offer such a service with the same level of Website sophistication and quality control.

 

Continue Reading Does JustAnswer.com Provide Legal Advice Online? Is this Site Ethically Compliant?

LawPIvotLawPivot, is a Silicon Valley legal industry start-up,  a new breed of online legal advice Web site that provides legal answers through a network of attorneys. Sometimes the legal advice or legal information is free like AVVO and LAWQA,  and sometimes you pay a fee, which LawPivot and JustAnswer require. See more:  American Bar Association Journal article on LawPivot.

I had a technical, corporate legal question that I needed a quick answer to, so I decided to try LawPivot’s Confidential Question and Answer Service, pay their fee, and see how well it worked. I knew that LawPivot has a pretty extensive panel of corporate lawyers, so I thought this would be a good starting place. Because my question involved a technical question, I think  if I had asked our regular outside counsel I probably would have generated a $450.00 legal fee and a long memo — which I really didn’t need at this point.

Instead for  $49.00, I received within 24 hours 8 answers from as many lawyers.  Of the 8 answers I received, I marked 5 as not helpful for my purposes. But 3 were very much on target, and one answer was exactly what I was looking for.

This service is "Confidential", but no attorney/client relationship is created, and the answers are supposed to be "legal information" rather than "legal advice",  The reality is that what I received was pretty good legal advice that applied to the particular facts of my situation.

Overall the site was very easy to use and I was very satisfied with the result. I think that even if I were not an attorney with experience in corporate law, I would have been able to recognize which answer to my question was the correct one. I am not sure that this would always be the case, so my conclusion is that this kind of online service for the average user is a starting point for more research, not an end point. The service helps you make a decision whether you need to retain an attorney for additional assistance. This is a good example of the use of the Internet to deliver "unbundled" legal services at an affordable fee.

The Ethical Issues

LawPivot makes clear that they do not share any fees with an attorney. The site also makes clear that it is not a legal referral service and that it does not promote any particular attorney. LawPivot properly avoids making claims about the lawyers in their network such as they are "the best", highly specialized in their fields", or the most experienced lawyers in their specialty.

Apparently, lawyers are ranked by an algorithm  on how well and promptly they answer questions. Whether this technology violates traditional legal referral rules, which prohibits profit-making organizations to be in the legal referral business, is the subject of a future blog post. 

Is LawPivot, as a non-law firm, permitted to charge a fee for legal advice? Is this the unauthorized practice if law? Not if the fee is paid by the user for the use of the Web site, and not for the legal answer or legal advice itself. There is a bar association opinion that holds that a Web site may charge a user for the user of the Website, when purchasing a legal service, and that this fee is not a fee for the legal service itself. See for example, Nassau County OK’s Tie with Americounsel.

In the AmeriCounsel scheme, which dates back to 2000, the Nassau County Bar concluded that:

"[S[ince AmeriCounsel does not charge attorneys any fee and since AmeriCounsel does not "recommend" or "promote" the use  of any particular lawyer’s services, it does not fall within the purview of DR 2-103(B) or (D). Rather, AmeriCounsel is a form of group advertising permitted by the Cod of Professional Responsibility, and by ethics opinions interpreting the Code."

I think this opinion is still good law.

However, LawPivot has been forced to create a business model, based on a work-around of a Rule of Professional Conduct that no longer serves any useful purpose.

In my opinion,  a regulatory scheme that enables private companies to take a share of the legal fee for referring client work to law firms would have a positive benefit.  It would result in providing more resources to the Web provider so that it could develop more nuanced quality control systems, more extensive marketing programs,and invest in innovative client referral systems. The prohibition on splitting fees between non-law firms and law firms doesn’t serve the purpose for which the rule was originally designed — to discourage "ambulance-chasing."

In fact, the ABA’s Standing Committee on the Delivery of Legal Services most recently sent a letter to the ABA Ethics 20/20 Commission recommending that Rule 7 (2) (b) be eliminated. 

Model Professional Rule (7) (2) (b) states:

(b) A lawyer shall not give anything of value for the recommendation of the lawyer’s
services except that the lawyer may:
 (my emphasis).
(1) pay the reasonable costs of advertisements or communications permitted by this Rule;
(2) pay the usual charges of a legal service plan or a not-for-profit or qualified lawyer
referral service. A qualified lawyer referral service is a lawyer referral service that has been
approved by an appropriate regulatory authority;
(3) pay for a law practice in accordance with Rule 1.17;

 

Comment [5] to the Rule merely states, “Lawyers are not permitted to pay others for channeling professional work."

The Standing Committee’s letter to the Ethics 20/20 Commission states: 

"The comment provides no rationale for this conclusion, which frankly is a position swallowed by the Rule’s exceptions. Law directories have channeled legal services for well over a hundred years. Lawyer referral services have channeled work to lawyers since the mid-twentieth century. Prepaid legal services have channeled work to lawyers for nearly 50 years. Public relations and marketing have joined lawyer advertising as vehicles that channel work since the Supreme Court ruled that states could not prohibit lawyer advertisements in 1977. Law firms providing services to corporations and institutions have in-house marketing staff, some of whom are paid well into six-figures, for the purpose of channeling professional work to their firms. And most recently, we have seen a proliferation of online third-party intermediaries that in some instances defy categorization as advertisements or referral services. Intermediaries are discussed in detail below, but suffice it to say here that the channeling of professional services in the marketplace in and of itself is not inherently
inappropriate. Collectively, these mechanisms create access to legal services for potential clients of all economic strata. They are, however, most important for those of moderate or middle class individuals who infrequently use of the services of a lawyer and need the information provided by these resources to help them make the decisions about the legal services most appropriate for them. "

The Ethics 20/20 Commission gave no serious consideration to the Standing Committee’s proposal so this reform is dead for the foreseeable future — unfortunately. 

The problem with Rule (7)(2)(b) is that it has been made irrelevant by the Internet and arguably is a deterrent to innovation in devising new ways of enabling consumers to access legal services. This is a Professional Rule that chills innovation, rather than preventing consumer harm.

AmeriCounsel failed as a company because it could not generate sufficient cash flow as it was limited to charging a relatively small administrative fees for use of the Web site, as distinguished from earning larger fees that could result from channeling work to lawyer’s in their network.

I hope that LawPivot does not suffer the same fate as AmeriCounsel.
 

 Raj AbhyankerHere is a tale of an exceptional entrepreneur/solo lawyer who has built a thriving Internet-based law practice of large scale in less than seven years. Raj Abhyanker, 37,  started his law practice in Palo Alto in a small office above a rug store in 2005 (sounds like many Palo Alto start-ups like Apple and Google!). The law firm’s focus is patent and trademark law which is Mr. Abhyanker’s specialty.  

In September, 2009, Mr Abhyanker launched a web site called Trademarkia which is designed to help small business secure a trademark for an affordable fee. Trademarkia contains an easy to search data base of all of the trademarks of the USPTO office. The site has been written up in the New York Times.

Little more than two year after launch,  Trademarkia has become the leading trademark site on the Web generating more than as 1,000,000 visitors a month, more than either LegalZoom or RocketLawyer.  The law firm now employs more than 60 lawyers, including a team of lawyers in India trained in U.S. trademark law.

This is an example of how a single lawyer with a deep knowledge of the power of the Internet, together with a background in knowledge process management and outsourcing, can create a world-class enterprise from nothing in a relatively short period of time.

Quality Solicitors in the United KingdomMr. Abhyanker is now moving his concept to a new level by creating LegalForce,  a new national legal services retail brand, similar to the Quality Solicitors concept in the UK.

Quality Solicitors
is a national network of retail offices serving consumers and small business by linking together a network of small law firms that share a common brand, advertising and marketing budgets, and an online presence. Mr Abhyanker’s goal is to create a Quality Solicitors type network in the United States.

Legal force Law CenterLegalForce is creating, in a historically-preserved building, a retail law center in downtown Palo Alto in the heart of Silicon Valley, (right across the street from the new Apple store on University Ave.)  The LegalForce center is set to open in the Fall of 2012.

Mr. Abhyanker’s idea is to create a physical space, that is as much about education as it is about "retail", like an Apple Store. In this innovative legal space clients can meet with their lawyers in a comfortable and non-formal setting. Like Starbuck’s "Third Place"  consumers and small business entrepreneurs will be able to meet their lawyer’s in a casual friendly environment. Part coffee bar, self-help book store, legal education and  legal research center, the idea is that a LegalForce center will be a nexus where people can connect and get to meet their lawyers in an accessible environment. Legal services won’t actually be delivered from the store – instead the store will be designed as a gateway to legal and other related services and the visible manifestation of a national retail legal services brand.

There have been other attempts to create a physical retail space where clients can meet with their lawyers in a comfortable and accessible environment. LegalGrind, based in Santa Monica, Los Angeles, advertises coffee with your counsel, but has never been able to expand beyond a few locations. Chicago has their LegalCafe, which is a similar concept, but remains a limited operation. 

My opinion is that the failure of these two operations to scale is the absence of an online strategy which offers legal services over the Internet as well as in a physical setting.

Unlike these smaller operations, Mr. Abhyanker plans to create a national branded legal service that links together lawyers working in the real world with a powerful online legal service strategy.

Unlike a typical law firm, Mr Abhyanker employs a team of software engineers capable of creating an innovative Internet legal services delivery platform that can create referrals for law firms that are members of the LegalForce network.

LegalForce  has the promise of creating a true national retail legal services brand that will offer a range of legal services – from limited legal services online to full service legal representation.

I have often thought that what serves consumers best is a business model that combines a strong online presence with lawyers who provide a full range of services within their own communities.

Online legal form web sites, like LegalZoom, CompleteCase,  RocketLawyer, and our own SmartLegalForms, are limited in scope.These are alternatives that consumers choose because (1) there is no existing national trusted legal service brand; and (2) consumers don’t understand what they are not getting when they purchase just a form from a non-law firm.

The LegalForce idea is designed to be a counter-force to these online insurgents which are capturing market share from the legal profession.

It will be interesting to see how this LegalForce idea develops and whether Mr. Abhyanker will be successful in this venture. LegalForce is one to watch.

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