I call it a gold rush, simply because one of the new style of legal models will outsell the others, then, through viral marketing, it will start to capture a huge chunk of the legal marketplace and a disproportionately high chunk of the profit, and clearly, that’s the one to get involved in.
But like a gold rush, whilst we know that there’s gold “out there” we just don’t know exactly where it is and by that I mean, it’s not yet clear what legal model will outsell and out-profit the others.
But as the legal marketplace is now the next target of opportunity for Venture Capital (VC) funds (regardless of the social cost or the cost to small firms and sole practitioners) it now really IS time to take stock of where you are and more importantly, where you are going.
But just in case you don’t really buy in to all the dust on the UK legal horizon, let me mix my metaphors and tell you that the light at the end of the tunnel really IS an oncoming train.
If you’ve not yet read Richard Susskind’s book “The End of Lawyers?” then first of all, you should, but in it he writes about “disruptive technologies”.
VC investment into the legal sector will also be disruptive, but let’s look at what “disruptive” means;
On the one hand, disruption means changing the way things operate by making them more efficient.
On the other hand, it means sucking the value from an industry in favour of the disrupter. If VC’s invest in something, it’s because they want to divert all the value (and money) from that sector into the business that they invest in.
Consider these recent examples in other industries; Apple changed the music industry, Amazon permanently sucked the value out of retail bookstores and Vision Express has almost wiped out High Street Sole Trader opticians.
Here’s what’s been happening in the new legal world in the last few months:
- Rocket Lawyer has received investment from Google Ventures to the tune of £11.4million. Rocket Lawyer which was founded by a US lawyer Charley Moore, provides a template of legal documents for consumers. It has a network of over 6,000 practising lawyers in the USA on hand to review (for free) forms created by Rocket Lawyer’s documentation system . It’s not a law firm and the lawyers involved are part of a referral network. Rocket Lawyer plans to enter the UK online legal market in 2012 because “the UK market is getting more receptive to new ways of consuming legal services”. They expect 20m people to use their service this year.
- LegalZoom, one of the best known legal brands in the USA, also founded by lawyers, has had $66 million injected into the business in the last few months by the Kleiner Bell Group. Again, not a law firm, LegalZoom provides legal documents created via its own documentation system and checks are made by its Hollywood based customer care team, who amend errors such as spelling mistakes, capitalisation and so on. LegalZoom also plans to enter the UK online legal market in 2012.
- Aderant acquired Client Services and CompuLaw for an undisclosed sum. Aderant, a software vendor used by law firms for billing, content management, and practice management is now the legal technology field’s largest independent software provider and its newly expanded applications catalogue is similar to that of LexisNexis, but without content and research services.
- Legal365 is a venture between serial Entrepreneur Ajaz Ahmed -the founder of Freeserve -and Last Cawthra Feather, a Yorkshire law firm. Legal365, will be driven by Epoq Legal – a desktop lawyer service already established in the UK . Legal365, is an online venture providing automated document assembly where lawyers will be on hand to help fill-out fixed fee legal documents the customer has purchased online and plans to roll-out a UK national network of city centre law shops. Mr Ahmed hinted that Legal365 could even become a franchise and even take over some empty high street shops.
- LawCloud an Edinburgh based offering from Lawware has seen a big increase in take-up since launching earlier this year.
- Face2face Solicitors is a new UK national franchise for solicitors that offers a harbour in the storm for sole practitioners who want to branch out on their own.
- LawPivot . As with RocketLawyer, is also partly funded by Google ventures, provides Crowdsourced legal advice for businesses in the US.
- QualitySolicitors, founded by UK lawyer, Craig Holt, is already up and running with its business model, but now even includes concession stands in WH Smith known as Legal Access Points (LAP’s). Aims to create a "Quality Mark" for legal firms.
- Lawyers2You an offering from Blakemores Solicitors are increasingly active in shopping centres in the English Midlands and pulling in the business without lawyers.
- HighStreetLawyer an offering in England & Wales only, also aiming to create a "quality mark" so that consumers get to know and trust a brand.
- Wigsters a legal price comparison website which also allows you to comment on and rate solicitors.
- Legal Spring, like Wigsters, provides and online review of online legal service providers in the US.
I could go on and on, as there are many other examples of both large and small new legal firm offerings making an impact in the local or national marketplace. But the bottom line really is this; if you are in a law firm of 15 partners or less then it really is time to decide where you want to be in the next 5 years.
And as you can see, doing nothing is not an option.