LegalZoom: What Does Not Destroy Me, Makes Me Stronger

The news broke today that a widely watched Missouri class action suit against online legal forms company LegalZoom alleging the unauthorized practice of law has been settled. Did the plaintiffs’ team unmask LegalZoom’s misdeeds and bring this hideous threat to the legal profession to its knees? Nah.

Final terms still have to be worked out and approved by the court, but the major bullet points reportedly include:

  • TBD compensation for Missouri customers
  • TBD changes in the way LegalZoom operates in Missouri
  • No admission or finding of wrongdoing by LegalZoom
  • LegalZoom continues to operate in Missouri

In other words, LegalZoom saves some litigation expense and now has a roadmap for beating back similar cases in other jurisdictions, and in the process will become a stronger, savvier competitor nationwide.

Law Practice Management: Legal Work vs. Work Lawyers Do

Last Friday Rachel Zahorsky at the ABA Journal filed a story from the ABA Annual Meeting headlined “As Nonlawyer Vendors, Would-Be Clients Take on More Legal Tasks, How Can Practitioners Get Ahead?”

Wait a minute…since the unauthorized practice of law is illegal, how can these brazen scofflaws get away with it? Because the work that is shifting is not intrinsically legal work, but rather non-legal work historically performed by lawyers. Granted, lawyers might be better at those tasks than non-lawyers, but economic, sociopolitical and technological factors are successfully breaking up those unofficial franchises nonetheless.

“It’s getting to be so hard to define what the practice of law is,” said Thomas C. Grella, chair of the management committee at the Asheville, N.C., firm McGuire, Wood & Bissette. “So it’s going to be even harder for state bars to regulate in the future.”

Grella was a participant on a panel entitled “The Once and Future Firm: Fact v. Fiction,” sponsored by the ABA Law Practice Management Section. According to Zahorsky’s post, the panel concluded that:

“For firms to succeed and flourish in the future, there needs to be strong leadership among law firm management, a willingness to innovate with regard to technology and billing methods, and concise plans of succession that address the compensation squabbles that plague many firms when it comes time for senior partners near retirement to transition high-revenue generating clients to junior lawyers.”

Mind-blowing, provocative stuff, right?

It might not have made it into the panel wrap-up, but at least one panelist clearly gets it:

“Lawyers need to ask: ‘Why are [clients] hiring me?’ said Mark Robertson of Robertson & Williams in Oklahoma City. ‘Can they hire someone else and not have a law firm do it? What is involved in putting together the paperwork of an M&A transaction that requires a lawyer, other than an opinion?'”

Ask not what the guild can do for you, but what you can do for your client.

Bar Associations: Most Trusted Brands for Lawyer Searches?

I’m a HUGE fan of Lifehacker, probably the most followed blog on tips and downloads for getting things done. A post this week on “How to Find a Reputable Lawyer” got my attention both for what it said and what it didn’t say.

Consulting with ABA and state/local bar associations and using their lawyer referral services was clearly the main recommendation:

“Both the American Bar Association and various state and local Bar Associations offer search and referral tools to help you find legal representation based on the type of lawyer you’re looking for. Bar Associations aren’t able to help you directly, but they can give you wholesale listings of practicing and certified lawyers who specialize in your subject area. They won’t help you make the subjective decision of whether or not a lawyer has a track record of successful litigation or charges fairly, but they’re a great place to start narrowing down your search if you don’t have anywhere else to start.

“Additionally, look for lawyer’s groups and legal aid groups that specialize in the type of issue you’re facing. Some of this involves web searching, but you can find a lot of this information by calling your state Bar Association. Even if they can’t make specific recommendations, they can direct you to professional groups of lawyers who specialize in different areas, like health care law, employment law, and more….

“Don’t hesitate to check your local bar for more information on the specific lawyers you plan to speak with, and don’t hesitate to ask for and then check on those lawyers’ references before making a decision.”

The only other online resources suggested had a distinct access to justice/legal aid bent– LawHelp.org, ProBono.net and Nolo.

Conspicuously absent from this how-to guide were references to lawyer search stalwarts like Martindale-Hubbell, Avvo, Super Lawyers and Lawyers.com. They’re free, too, and certainly would be likelier than LawHelp.org to show up in a Google search when researching such an article. So it looks like an intentional omission.

Why?

My sense is that the cost of legal representation — real and perceived — has transformed access to justice into a mainstream consumer issue, and bloggers/journalists writing for a mass audience sense that. In that dynamic, the traditional role of bar associations as impartial brokers comes into higher relief — and creates a great marketing opportunity to promote member services and increase participation in bar programs.

Who’s Afraid of LegalZoom? And Why?

Mentioning LegalZoom in a group of lawyers elicits a similar reaction to uttering “Voldemort” to magical folk in a Harry Potter book/movie — fear and contempt for “He Who Must Not Be Named.” He Who Must Not Be NamedLegalZoom is the most reviled recent innovation in the legal industry, the bete noire of small business and family law.

But like family lawyer Lee Rosen, I’m puzzled why lawyers seem focused on destroying the business through legal challenges and rhetorical attacks instead of besting it in the marketplace.

 “…The flaws in LegalZoom…are fixable. LegalZoom has resources and they’ve got time. They’re going to fix every issue they identify and, eventually, they’re going to have an excellent product. They’ll build greater and greater intelligence into the service and they’ll, one day, get it right for every client.

“Once they get it right, you’re still going to need to make a living. It’s time to start telling the stories of how you add value and give people a reason to come to you.”

With some innovative marketing — like adapting your service delivery model and sharpening your value proposition — you can actually benefit from LegalZoom’s outsized presence in the market.

  • LegalZoom can only say it’s cheaper; not better, or even as good.
  • If you’re honest with yourself, you don’t even want clients who think online forms are good enough. They would never be happy, you would end up over-servicing the client, and you would likely not get future business.
  • Is anyone actually losing clients to LegalZoom, or is the service model just attracting individuals and small businesses who otherwise wouldn’t consult with an attorney?
  • LegalZoom’s Achilles’ heel is that it cannot provide peace of mind. Leverage that. Create a higher-margin niche in reviewing draft DIY documents.
  • Productize and market your own forms. 
  • Give templates away. It’s a mitzvah to other small and solo firms (and potential referral sources), and a good marketing hook for your higher-value client services.

Do you think LegalZoom is an actual threat to small and solo firms, or are you embracing the challenge?

Pro Se Nation: Schadenfreude Don’t Pay the Bills

Desperate times call for desperate measures, so the continuing rise in pro se representation should not be a surprise to anyone. Driven partly by economic hardship and partly by social and political zeitgeist, pro se representation and self-service solutions like LegalZoom address real — and frequently profound — financial and psychological needs. Notwithstanding low probability of prevailing and high probability of costly oversights and mistakes, DIY legal work is an enduring force to be reckoned with, especially in areas like family and small business law.

The typical lawyerly response to the issue is an “at your own peril,” “pay me now or pay me later” admonition. I wonder how much business fear-mongering and shaming brings in?

But what if enterprising lawyers started treating individuals considering pro se matters with respect, empathy and a spirit of collaboration, rather than bemused condescension? They might end up developing a successful niche for themselves in a crowded and challenging market, just as we saw with the development and acceptance of collaborative law, the non-adversarial alternative to scorched-earth divorce and child custody litigation.

For a while I have been intrigued by the marketing potential of constructive engagement with pro se representation and have posted on the topic before, so I am always interested to come across content like Arizona family law attorney Scott David Stewart’s Divorce FAQ. What’s interesting and worthy of emulation is that instead of  dismissing pro se divorce out of hand, Stewart treats the subject factually and candidly, with balance and respect. Instead of baleful warnings, his Q&A simply reminds people of why they genuinely need a lawyer.

Since the perceived high cost of divorce proceedings figures so prominently in decisions to proceed pro se, Stewart straightforwardly kicks the legs out from under that myth without talking discounts: 

“The cost of a divorce in Arizona depends upon how well two people are willing to work together to resolve any outstanding issues. Ultimately, if two people cannot get along and resolve their divorce, then their attorneys must resolve every aspect of their case for them, therefore driving up the cost of their case. If two people are capable of working together and resolving outstanding issues in their divorce case, then their case can be resolved with minimal attorney involvement and minimal attorney fees.”

In other words, clients make divorces expensive, not lawyers. Only ugly divorces are expensive; well-intentioned, reasonable people with their family’s best interests front and center can certainly afford proper representation.

I think that’s a powerful and persuasive statement because it is commonsense and simple, and it could certainly form the basis for a firm’s unique value proposition. Unfortunately, that great passage is buried in a video clip. Notwithstanding, it’s an excellent example of how attorneys can begin treating the pro se “menace” as an opportunity.

If you have some success — or cautionary — stories to share about lawyers taking on “pro se nation,” I’d love to hear them.

Virtual Law, Affordable Legal Services and Access to Justice

Back in March I wrote a post about the Austin Bar Association’s “People’s Law School,” a program intended, in part, to address access to justice issues related to education and resources supporting pro se representation. So I was interested to see Donna Seyle’s take on addressing access to justice issues through wider adoption of Web 2.0 technology. She noted in a recent post on her Law Practice Strategy blog that:

  • The lower cost structure of virtual law practice could make legal services more affordable to more people, and
  • Broader, more innovative implementation of IT solutions could address barriers to information, processes and other resources.

What impressed me most about the post, though, were the ethical underpinnings of Seyle’s argument:

“Yes, offering consumers affordable services is a great way to create a market for your practice. But the advantages of affordability also spill over to one of the great tenets of our profession: access to justice. I would argue that the advancement of this right is as paramount as any security and privacy challenge posed by the use of cloud-based practice management platforms.”

In other words, virtual law and innovative IT make for good business and good policy.