So … “You might have to move to Nebraska. … You might have to join a small firm where they don’t make the big bucks,” she said. “You might also have to learn to be a giver, not a taker….
Posts Tagged ‘quot’
PATRIOT Sunset Extension Act of 2011 "Signed" into Law
31
May
Late last Thursday S. 990, PATRIOT Sunsets Extension Act of 2011 [Thomas], was signed into law shortly before sections of the Act were set to expire. In what appears to be a presidential first, an autopen was used at the…
How Much is Legal Advice Worth?
25
May
One of the winners of TechCrunch Disrupt Hackathon is a new, yet to be launched, legal document web site called, Docracy, The idea is that members will contribute their legal documents to an open source site so that there would be a basis for comparison between "open source" documents and the document that the member needs for their business. The theory is that by comparing documents, with the document that the member has on hand, there would be a basis for comparison, resulting in an informed decision, without the cost or benefit of legal advice.
In this model, legal advice from an attorney is worth zero. The model is designed to eliminate the attorney from the transaction.
The idea was developed by mobile app developers Matt Hall and John Watkinson ,from Larva Labs, who were faced with signing an NDA with a client and were unsure of some of the terms and concluded that the cost of legal advice was either unnecessary or prohibitive.
This is another example of the resentment that the average consumer and small business person has towards the legal profession resulting in the rise of non-lawyer legal form web sites such as LegalZoom.
Another example of an open source legal document repository is Docstoc which we have used as a research source. It is useful for us, because as lawyers we understand what we are reading. I think simply accessing raw documents as a consumer would be a daunting exercise, although I am sure that many consumers and small business use the site.
The problem with any legal document web site as a source for creating binding legal documents is that the use of a particular clause may be rooted in case law in a particular jurisdiction.
Without understanding all of the implications of using particular language in an agreement, the "non-lawyer" moves into a danger zone, because he or she has no idea what they are signing.
A better alternative is a "self-help" book from Nolo that contains both legal forms and explanations of the implications of each clause, but that often involves reading and understanding a 300 page book, which is beyond the attention span of most consumers.
Another solution is an automated document with extensive help screens that explain the implications of choosing one clause over the other.
A third alternative, is to purchase "unbundled and limited legal services" from an on-line law firm for a fixed price with legal advice bundled into the transaction. In that case you get a certain level of accountability and guarantee that the legal advice is correct for the user’s individual situation.
See for example the firms listed at DirectLaw’s legal document portal , where you can access legal forms for free, or forms bundled with legal advice for a fixed fee.
You don’t get legal advice from a legal forms web site or a LegalZoom for that matter, which can be a major limitation depending on the complexity of the document or the transaction. Without annotations that explain the significance of particular language in an agreement, the non-lawyer is stumbling around in the dark.
Nevertheless, I don’t doubt that consumers and small business will find this a popular site, despite its limitations. Caveat emptor!
Should law firms be owned by non-lawyer investors?
19
May
There has been much discussion recently in various venues about whether 5.4 of the US Rules of Professional Responsibility should be amended or revised to permit investment in law firms by non-lawyer, or non-lawyer entities, or even ownership of US law firms by non-lawyer entities. The ABA’s Ethics 20/20 Commission is circulating a paper on the subject and is soliciting comments.
Known in the United Kingdom as Alternative Business Structures (ABS), this new form of law firm organization, authorized by the UK Legal Services Act of 2007, will be permitted after October 6, 2011. Alternative Business Structures are already permitted in Australia, where several law firms have already gone public.
Other than the State of North Carolina where there is bill pending to permit non-lawyer ownership of up to 40% of a law firm, there has been little movement in the US to make change Rule 5.4 Some hybrid models are beginning to emerge in the US, but they are a workaround the existing rules.
There is no clear path for non-lawyer ownership or investment in a law firm in the United States, and as a result it is arguable that the legal services delivery system lacks the capital necessary to innovate and create the efficient systems that are necessary to serve not only the "latent market for legal services", but existing legal markets more effectively. Resources from Labor Law Compliance Center offer mandatory federal & state labor law posters or combination labor law posters for government business compliance.
Now comes Jacoby & Meyers, a law firm that has pioneered in changing the way legal services are delivered, filing multiple law suits in the Federal District courts of New York, New Jersey, and Connecticut against the presiding state justices in those states responsible for implementing and enforcing Rule 5.4, requesting that the Rule by overturned. The Complaint makes clear that Jacoby & Meyers "seeks to free itself of the shackles that currently encumber its ability to raise outside financing and to ensure that American law firms are able to compete on the global stage"
Click here for a complete version of the Complaint.
Andrew Finkelstein, the Managing Partner of Jacoby & Meyers, and also the Managing Partner of Finkelstein & Partners, said that "No legitimate rationale exists to prevent non-lawyers from owning equity in a law firm. The time has come to permit non-lawyers to invest in law firms in the United States,"
Now the fun begins!
Disclosure: Finkelstein and Partners is a subscriber to our DirectLaw Virtual Law Firm Service.
Online Legal Services: Is It Hype or a New Way of Delivering Legal Services?
09
Apr
We have been evaluating the experience of law firms that have subscribed to our DirectLaw Virtual Law Firm Platform to determine what are the factors that make for success. Subscribers to our service are mostly solo practitioners and small law firms who are experimenting with this new mode of delivering legal services online. We want to share their experiences as we learn from them about what works and what doesn’t work. When we have exemplary examples of success we will develop case studies from which we all can learn.
All kinds of lawyers have subscribed to our DirectLaw client portal which enables the online delivery of legal services:
- recent law school graduates who can’t find a job and forced to hang out their own shingle;
- lawyers who want to give up on a physical office for one reason or another and want to try working from anywhere, but still see clients face to face when necessary;
- lawyers who think they can copy LegalZoom and get rich quick by simply putting a site up that sells legal forms and documents online;
- lawyers who are in transition because they have been terminated by their law firm employer because of the impact of a constrained economy which is not growing;
- retiring lawyers, with deep experience and expertise, and who want to transition into a part-time practice, rather than give up the law entirely;
- “pure-play” virtual law firms, where the lawyer never sees a client face to face in an office setting or goes to court;
- more traditional law firms, and the experienced lawyers that run them, that want to extend their brand online by adding what we refer to as a “virtual component” or a “virtual law firm platform.”
- Less experienced lawyers who want to compete against older more experienced lawyers with an online service to distinguish themselves from more traditional law firms in their community.
Each of these lawyers see potential in the “virtual law firm” concept acquiring new clients and serving existing clients more effectively.
Almost all of our DirectLaw subscribers hope to acquire new clients by creating a dynamic, and interactive Internet presence that is more than a passive web site, which is no more than an online brochure.
Some law firms are struggling as "virtual law firms" and are not able to generate new clients and new sources of revenues. On the other hand, we know from our own direct experience in running a virtual law firm since 2003, that the concept can work, and our own success in selling automated legal forms directly to consumers through a network of more than 30 legal form websites, indicates that there is real demand for online legal solutions.
So what are the factors that contribute to success?
1. Your law firm web site needs to be findable on the web.
Our analysis indicates that a major cause of failure for law firms trying to market their services online is a poorly constructed front-end website that is not search engine optimized. DirectLaw’s client portal integrates with a law firm’s front end website and it is through the law firm’s web site that the client finds the law firm, and logs on to their own password protected and secure client space.
If the firm’s web site is not findable on the Internet, the site gets little traffic, which translates into no prospects and no new clients. Most lawyers no little about the art and science of inbound internet marketing and the techniques of how to make their web sites findable. Web design firms that create graphically intensive law firm web sites that look beautiful do a disservice to law firms unless the sites they develop are also search engine optimized and the web design firm stresses the importance of creating new legal content that is practice specific as a magnet for web traffic.
See: Law Firm Web Site Design: Tips and Techniques
2. You need to have a good reputation as a competent attorney in your community with an existing client base if you are going to make it online. There are some exceptions to this rule, but not many.
A major factor that contributes to online success is having a good reputation in a particular area of legal practice. See Case Study
“Pure play” virtual law firms launched by lawyers who can’t quite make it in the real world won’t make it online.
The most successful use of online virtual law firm technology is demonstrated by law firms who already have a successful traditional practice and a base of clients to draw upon. Online law firm technology enhances the experience for existing clients and increases the productivity of the law firm in serving these clients. Word of mouth referral from existing client’s, sends new clients to the law firm’s web site. New online prospects convert to clients because of the credibility of the attorney in the real world, and the potential for a face to face meeting when necessary. The online technology component complements the offline practice, and vice versa. This doesn’t mean that a “pure play” virtual law firm can’t work; it just requires a special type of practice to make a "pure play" business model work. A "click and mortar" law firm model seems to work best, at least during this period of early development of the online legal services concept.
This is a complex subject that requires more space than can be contained in a single blog post.
For further analysis and discussion of success factors see: Factors That Contribute to the Successful Delivery of Online Legal Services.
LegalZoom is Considering an IPO
22
Mar
Apparently LegalZoom is in the early stages of planning an IPO, (going public), according to an unnamed source at VentureBeat. Employing more that 500 employees, and having raised over $45 million in venture capital over the last few years, LegalZoom is clearly the leading non-lawyer legal document preparation web site. This is a good example of a disruptive innovation in the delivery of legal solutions by a non-lawyer provider that continues to eat away at the market share of solo practitioners and small law firms.
Focusing on a market that is not served well by the legal profession, in the same way that Southwest Airlines first targeted people who traveled by bus, rather than by air because air travel was too expensive, LegalZoom is will undoubtedly figure out a way to move up the value chain, capturing even more complex business from law firms, without actually giving legal advice.
In the United States, because the definition of what constitutes the "unauthorized practice of law" is so vague. (perhaps unconstitutionally vague), it would seem that even though LegalZoom does not actually provide legal advice, it would be prohibited from assembling legal documents, even when the document assembly is purely software-driven.
The reality is that bar associations have a tough case to make against a non-lawyer provider when no actual legal advice is given. UPL statutes haven’t been truly tested on the issue of whether a non-lawyer can assemble legal documents without actually giving legal advice. In Florida, when the issue came up, there was a compromise between the bar and non-lawyer providers and non-lawyers can help a consumer complete court forms as long as no legal advice is provided. It gets murky when you move beyond courts forms, to more complex transactional documents such as a will, a living trust, or a marital separation agreement, even if the user is making the selection through a software driven questionnaire. Some UPL advocates, have argued that the selection of alternative clauses is still UPL, because a person had to "program" the clauses. There is some precedent for this position, but the State of Texas on the other hand, specifically excludes software driven document assembly from the "unauthorized practice of law., provided there there are disclaimers which state "clearly and conspicuously that the products are not the substitute for the advice of an attorney."
I think the risk portion of the prospectus will make for fascinating reading, particularly since in many states UPL is a felony. I can just visualize this language: "Investors should be aware that the company may be violating unauthorized practice of law statutes in many states, and as a result, if convicted, one or more executive officers may be required to serve time in the pokey."
In the interest of full disclosure, Epoq US, of which I am President, and which is the parent company of DirectLaw, also provides legal document preparation services over the web directly to consumers through a network of legal web sites So perhaps I should be worried as well.
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.
Venture Capital Flowing Into Legal Enterprises: Total Attorneys Receives Infusion of Capital
22
Jan
Private capital is beginning to flow into companies that are operating at the intersection of the delivery of legal services and the Internet.
Total Attorneys, a Chicago-based company, just announced that they received a multimillion dollar investment from BIA Digital Partners, a Virginia-based venture capital firm. Total Attorneys is most known for the marketing services that it provides to law firms and the recent ethical controversy in some states surrounding the use of pay-per-click advertising on behalf of law firms. (Apparently this controversy has been resolved in favor of Total Attorneys in every state where it was considered by bar ethics committees.)
The company plans to extend its technology assisted services to law firms by expanding its virtual law firm Software as a Service offerings (SaaS). Total Attorneys mission is to become a leading provider of elawyering Services to solos and small law firms by providing a comprehensive suite of outsourced technology services, from marketing to web-based practice management tools to a robust client portal.
The company licenses virtual law office technology to solos and small law firms as a subscription service, that now consists primarily of a robust suite of "back-office" practice management tools. The pan is to expand the service into a more comprehensive "front-office" client portal, providing a total solution to solos and small law firms.
This expansion would entitle the company to claim that it is a leading provider in the eLawyering space and it would compete more directly with our own DirectLaw virtual law firm platform service and other web-based companies moving in the same direction. [ See: Legal Vendors Cloud Computing Association ] .
The concept of "technology-assisted service" is an interesting category for the legal industry for it describes a form of outsourcing which combines both a digitally-based service combined with human service. Thus Total Attorneys also provides "virtual receptionist services", and at one point virtual support services to bankruptcy law firms. One management solution for solos and small law firms it to out source to independent specialized companies functions which can be done more effectively and at less cost than the law firm can do itself using internal resources.
It is good to see competition heating up in the eLawyering space, which has been moribund for a long period of time. The eLawyering Task Force of the Law Practice Management Section of the ABA was created in 2000, more than a decade ago. For many years there was not much to report in terms of the innovative delivery of on-line legal services by law firms. The last 2 years has witnessed an explosion in elawyering industry developments as lawyers adapt to change — caused by a severe recession, widespread unemployment of recent law school graduates, and the challenges created by consumers who are seeking lower-cost and "good enough" alternatives to lawyers, [such as LegalZoom.]
Competition among a variety of vendors provides choices to law firms. Competition focuses attention on the fact that delivering legal applications as a SaaS is emerging as a new paradigm for enabling solos and small law firms to access complex Internet technologies at a fraction of the capital cost of developing these applications internally. Private capital moving into the legal industry will create more choices for law firms, and as a consequence more choices for consumers.
Creative legal outsourcing will enable solos and small law firms to become more productive and survive in an increasingly competitive environment.
Dr. Laura reinventing herself again?
I wrote about Dr. Laura Schlessinger awhile back, comparing her to Dr. Toni Grant. So did Betty Bowers, which is also worth recalling. If you want to know who Betty Bowers is, she’s explained here. Meanwhile, we will wait with baited breath for the umpteenth coming of Dr. Laura, but in what shape? She claims she will be giving up her radio show. Back to books, or TV reality appearances? A game show? A Judge on America’s Got Talent? (I can think of others who have done this.) Perhaps she will go back to this, although I think it’s got a bit past her.
Her callers will have to find some other problem-seeker offering personalized answers. Someone with a little sensitivity, someone who will know whether it is ok to flaunt the "N" word. I do feel a tiny bit sorry for her, truth to tell. For her life as of now will be taken over by others not of her choosing, and I know how that feels.
Posted in COMMENTARY