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Posts Tagged ‘free legal advice’
How Do Lawyer Bidding Sites Work?
30
Nov
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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.
LawPivot: Another Legal Advice Web Site
29
Jan
Another interesting start-up has emerged out of Silicon Valley to provide crowdsourced legal advice to other start-ups for free.
Vertical Q&A web sites seems to be the next new thing among venture capital investors. Even Facebook rolled out this year a crowd-sourced Q&A service.
LawPivot, a legal Q&A web site founded in 2009, hopes to fill a niche by providing legal advice to the founders of start-up and early stage high-tech companies based in California at a legal fee they can afford — FREE. Legal advice is provided by an experienced network of high-priced business law attorneys, recruited from the top 200 hundred or so law firms, who hope to pick up new clients by entering into discussions by providing free legal advice services to start-up companies.
Free legal advice or the “free consult” has been employed by lawyers for years, pre-Internet, as a tried and true marketing strategy for acquiring new clients. Now many lawyers are beginning to offer free legal advice online from their web sites directly. See for example, VirtualEsq.Com . By next year there will be hundreds of these free legal advice services offered directly by lawyers from their web sites as the virtual law firm movement begins to scale.
However, free legal advice from an individual law firm’s web site, is not the same thing as a vertical web site that aggregates answers from many lawyers, giving consumers a wider variety of responses to their particular situation.
Free legal advice online is not a completely new idea. FreeAdvice has been doing it for years, and consumers can get answers to their basic legal questions from sites such as AVVO, RocketLawyer, and JustAnswer. What is new, is that LawPivot provides through its network of lawyers “real” legal advice that applies to the client’s particular situation, as distinguished from merely legal information. And this advice is reputedly to be "high quality" given the stature of the lawyers recruited to the LawPivot network.
However, genuine legal advice, [as distinguished from “legal advice” that is characterized as “legal information” ], like any legal service, has to be delivered in an ethically compliant way requiring that the client’s information be kept confidential, that an attorney/client relationship be established, and that the attorney providing the legal advice be a member of the bar within the jurisdiction where the client is located. Presumably LawPivot is addressing these issues. The LawPivot service is presently limited to California, but the company, according to its representations, plans to expand nationwide.
Although the company recently raised $600,000 from Google Ventures, the venture capital arm of Google, after a $400,0000 round from from a group of angel investors, it will be interesting to see how or whether it survives. At this point, neither the clients are charged for legal advice, nor are the participating attorneys charged an advertising fee. So there is no revenue, and apparently no business model. However, I doubt that the investors thought they were making charitable contributions, so there must be a business model lurking in the background somewhere?
Unfortunately, the only business model that is ethically compliant in the US, is one where the participating lawyers pay an advertising fee to play (get listed) and get exposure. Splitting legal advice fees between a law firm and a non-law firm , is a big “No, No” and an ethical prohibition that exposes the participating attorneys to bar sanctions which could lead to disbarment. Perhaps because Google is now involved as a major backer of LawPivot , and the company is planning to move to the GooglePlex campus start-up incubator, "they can do no wrong.!"
Many other Western common law jurisdictions, like the United Kingdom, have abolished the division of fees, but the rules against splitting fees with non-lawyers remains sacrosanct in the US, on the theory that splitting fees would compromise the independent judgment of the attorney. However, in the UK, lawyers are permitted to work for a profit-making company and provide legal advice directly to consumers, and no one seems to be complaining about compromised judgment. [ See: FirstAssist in the UK for an example ].
Charging clients an administrative fee to “use” the web site, as an alternative revenue source, has been tried before in an earlier Internet era, and it failed then. [ e.g. AmeriCounsel ]. I doubt that this model will work today when consumers are expecting everything on the web to be for free.
I think it is a good sign that innovation is happening in the legal industry, and that private capital is finally looking for a way to get a return by investing in the delivery of legal services. [See: Total Attorneys Receives Multi-Million Dollar Investment ].
I would like to see companies like LawPivot thrive, but at this point I don’t see the juice. Are advertising revenues sufficient to make this venture sustainable, or has LawPivot figured out another legitimate source of revenue that doesn’t violate US ethical prohibitions? Only time will tell.
