Friday, July 11, 2008

Future Law Practice

Does Family Lore have it right in Divorce-Online: The Way of the Future??

"It seems to me that there are two primary reasons why clients are attracted to the service: cost and convenience. With fewer people entitled to legal aid and money now becoming tighter, the appeal of a service that seriously undercuts solicitors is obvious. The only problem, of course, is that you have to have agreed a financial/property settlement with your spouse in order to take full advantage of the service. As to convenience, the public is expecting to be able to do more and more from the comfort of their own homes - if you can order your grocery without going to the supermarket, why not deal with your divorce without having to go to see a solicitor?

The other reason for the success of Divorce-Online is the drive of Keenan, and his willingness to innovate. He was not afraid to set up the business at the time of the crash, and initially ran it from his home in his spare time, until he found an investor. He often appears in the media, and the company was famously the first to advertise cut-price divorce services on television."
Mind, this comes from the UK. I suggest notice the "gotcha" - these are basically uncontested divorces. Having had conversations over the years with civilians trying to do their own divorces, I think this service could be duplicated here so long as children are not included. What I think is really at issue here is how clients view lawyers and their services. Clients have no means of judging the quality of work, and I think they have difficulty recognizing the difference between retail and wholesale work. Legalzoom (see my article on this here) and the like appeal to the sense that legal work is wholesale and not retail. That not all legal work can be reduced to the lowest common denominator escapes the general public who quail at the thought of legal fees and not at what they are buying. Yes, some work will shift to online questionnaires translating answers into legal documents. The sooner the Bar recognizes this possiblity, the better off we all will be. The sooner that the general public learns that some work requires such detail and nuance for the result to be effective, the better off they will be.

Which brings me to something similar but also different from Adam Smith, Esq. - How High Quality Are Your Lawyers? (How Can You Tell?):
Our first text, from the Old Testament conventional debate, stems from today's WSJ story on "Axiom Legal," headlined Newcomer Law Firms Are Creating Niches with Blue-Chip Clients, discussing the business model of Axiom and other firms, which is to provide highly credentialed attorneys to corporate law departments on a contract or project basis, typically at savings of 25-50% vs. what an AmLaw 100 firm would charge


What exactly is problem these commenters—and the existence of Axiom to begin with—are highlighting?

I submit it's an inability, or at least a failure, of clients to measure quality of legal services. With no real handle on what's extraordinary work, what's acceptable work, and what's unacceptable work, clients buy the "proxy" of prestige firm, law school pedigree, and, yes, high hourly billing rate.

Axiom is attempting to perform arbitrage on that market by promising the gilt-edged pedigree (erego the 1 in 100 hiring number, which sounds impressive regardless of its statistical integrity), without the prestige firm name and without the eye-opening hourly rates. As an admirer on general principles of firms that try to find localized market failures and capitalize upon them, I am glad to see Axiom evidently successful and growing.


John Bolch said...

I agree that the public often can't distinguish between 'retail and wholesale', as you eloquently put it. As you correctly say, Divorce-Online only deals with uncontested cases, and cannot therefore replace 'conventional' lawyers - the real point of my post is that I don't think the profession over here can afford to lose all of the straightforward work.

Sam Hasler said...

Nor can we over here afford to lose any work in our current economy.

I know many attorneys who have no idea that this kind of competition exists and of attorneys who know it exists but ignore it. We do ignore it at our own peril.

There are also another class of attorneys who know it exists and have found ways of competing with the problem. The most prominent way of competition is cleaning up the messes caused by using the self-help[ tools improperly.

Still, I think the only way we can keep the business is two-fold. First, to realize what the market wants and then to meet those needs. Secondly, to educate the public on why going cheap saves them nothing.