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

The legal profession has witnessed the rise of new players that are disruptive of existing patterns of law practice.

First came LegalZoom, AVVO, TotalAttorneys, Rocketlawyer, MyLawyer (our company), and Law Pivot, disrupters that are having an impact on the way legal services are identified and delivered to the broad middle class.

Now comes AttorneyFee.com that holds promise of making legal fees more transparent.

For many years I have been critical of the fact that lawyers charge widely differing legal fees for the same work. In a study I was involved at the University of Maryland Law school some years ago, we discovered that for simple family law actions, such as a no-fault divorce, lawyers would charge any where from $500.00 to $3,000.00 for essentially the same work. This variation in legal fees for the same work tasks is another cause of the distrust that the average consumer has of the legal profession.

AttorneyFee.com is a welcome development for law firms that are already experimenting with fixed fee legal services delivered online. Law firms that are using online delivery technology will in fact have a competitive advantage over law firms that use higher cost productive methods. Sites like AttorneyFee.com expand the reach of these firms by giving them another channel to advertise their fee information to consumers.

I registered my Maryland virtual law firm at AttorneyFee.com yesterday. I found the interface to be clean and simple and the registration process easy.

My only criticism was that there was no field to display a law firm's web address -- only an email address and a telephone number. This means that an interested prospect will have to contact the law firm to get more information by phone or email, without the opportunity of easily clicking through to the law firm's web site.

In my case, the page describing the pricing of my services does not provide enough information to the consumer about the scope of my services. There is no place to indicate that we offer "limited legal services" for pro se parties exclusively. For a new company that prides itself on transparency, this feature is less than transparent.

Moreover, when my firm comes up, a form also pops up that enables the prospect to ask for a free consultation. Except in our case, we don't provide free consultations. Since we sell a legal advice service by the question for a modest flat fee, offering a "free consultation" is not consistent with our business model. 

When I asked Robert Komaiko, one of the co-founders of AttorneyFee about these issues, he said they have other features planned for the site but they felt it was important to launch the site, get feedback, learn, and revise. As a believer in the lean startup method of starting a company, which is now all the rage in Silicon Valley, I agreed with Robert that it was important to get the concept launched and to work out the kinks later. There is certainly enough benefits and features already built into the site to see if this concept gets any traction. Better to launch the service , get feedback, and revise, as opposed to waiting for a year, adding every feature imaginable, and then discovering that consumers have no interest in the service.

AttorneyFee  using a proprietary search technology,has already  listed the prices that over 20,000 law firms are charging on their web sites.  The company plans to have over 70,000 law firm sites indexed within a relatively short period of time. This information alone will provide a useful consumer resource for comparing fees charged by law firms for similar tasks.

Some lawyers are bound to be critical of this web service as it is another indication of the commercialization of the legal profession but as Beibei Que, the other co-founder of AttorneyFee, and its CEO, told me: 

We have all known that this moment was coming for a long time.  The profession can no longer limp along with one foot in the for-profit economy and another in a quasi-clergy role.  If we wish to reap the benefits of the for-profit economy, we must be prepared to comport ourselves like private market actors, and this means not retreating from conversations about price or concealing them behind closed doors.

AttorneyFee.com is a welcome addition to the family of new disrupters shaking the legal profession to its core.

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The Committee on Attorney Advertising of the New Jersey Court System issued an Advisory Opinion this week that stated that a Total Bankruptcy web site,  published by TotalAttorneys®, a law firm marketing and services organization based in Chicago, is misleading and in violation of the Rule of Professional  Conduct 7.1 (a) .Download Full Opinion .

The Committee also ruled that the web site was not an impermissible referral service and that Attorneys are not flatly prohibited from paying for advertising on a "pay-per-lead" or "pay per click" basis. That's good news for TotalAttorneys and other performance-based marketing schemes on the Internet.

The Committee sets out clearly that "Attorney advertising cannot be misleading or omit operative facts." and found that the website did not provide sufficient information to the user and is misleading. 

In this case, the user was directed to only one attorney based on the purchase of exclusive rights to a geographical area. To avoid misleading consumers, the Committee stated, the methodology for the selection of the attorney's name must be made clear, including the fact that the website limited participation to one (paying) attorney per geographical area. Further, the Committee specified that all requirements to participate in the website must be clearly specified; a full list of participating attorneys must be readily accessible, and the website must inform the user that the attorneys have paid a fee to participate.

It is easy for attorneys to violate their professional obligations and expose themselves to bar sanctions, by ignoring the fine print in their agreements with Internet-based marketing websites.

For example, no less a credible organization as Lexis-Nexis®,  recently launched a direct to consumer web site, called  EZLAW.COM. The website purports to offer wills, powers of attorney and advance directives forms bundled with legal advice for a fixed and reasonable fee. A goal I would heartily endorse.

However, the site seems to suffer from the same issues as the TotalAttorney's web site when viewed through the lense of the New Jersey Advisory Opinion.

At EZLAW, the site operator provides a mechanism for consumers to assemble legal documents on-line and then make available a network of attorneys to provide legal advice as part of the offered package. In describing its Attorney Network, EZLAW states that:

They are all prescreened by EZLaw to ensure that you get professional, experienced and confidential legal counsel. To be included in our network, attorneys must meet our rigorous 12-point checklist of criteria.

This suggests that EZLAW is vouching for the quality of the qualifications of the participating attorneys, not only whether an attorney has practiced a number of years or maintains a certain level of malpractice, and this could be construed as misleading.

Moreover, the NJ Opinion states clearly that as a form of attorney advertising, " a full list of participating attorneys must be readily accessible," but on the EZLAW web site no list of participating attorneys is to be found.

Moreover the limited representation agreement executed by the client with the law firm is provided by EZLAW on behalf of the law firm, so the client never knows the identity of the law firm prior to entering into an engagement with the attorney. Normally you would expect that the client would enter into a limited retainer agreement directly with the law firm. I never heard of a retainer agreement that wasn't entered into directly between the client and the law firm. Not in this case.

Click here for a copy of the Representation Agreement between EZLAW and the client.  You decide whether  this agreement is ethically compliant? I am interested in hearing other opinions about this agreement. If you have one. please comment.

So what's the bottom line? Lawyer's need to read the fine print. Lawyers need to have a  full understanding of how their ethical obligations apply  to these new Internet-based marketing schemes lest they be caught in a web of disciplinary proceedings that wasn't part of the bargain. 

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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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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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