Investment In Legal
Legal tech platforms are changing the legal industry. Confidence in hiring the right lawyer is the value generated by legal tech platforms.
Much has recently been published about “legal tech platforms” and their implications on the legal field. Regarding the tech platforms, I’m making a reference to the online business model instead of just the tech startups Avvo, Rocket Lawyer, and LegalZoom are being promoted as the next generation legal tech sites, and I want to dig a little more into this concept.
So what’s the legal technology platform? The best analogy I have encountered is in the Deloitte Business Trends Report on “Business Ecosystems” from 2015: “platforms are layers of infrastructure that set standards for a system in which many separate entities can operate for their own benefit.” Good examples of these types of real platforms in our everyday lives would be Uber, Booking.com, and amazon among the many platforms that are built on the sharing or collaborative economy business model.
Companies like Uber offer a well-marketed platform with advanced features for all of its drivers. Layers of infrastructure on which the app is designed to help scale both the engagement and the growing demand for new ventures (such as Doordash). Legal tech can use technology as well to improve the client experience.
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The terms of service that Uber enforces set out rules for each of their services. Each service has a predetermined set of regulations for the service level offered and anticipated by consumers when using the product. Further, it’s important that all of their drivers meet this service each time. The rating system enforces this set of standards.
Legal Tech Companies Reputation
Confidence is the best value generated by legal tech platforms. The social element of a tech company creates a level of confidence through user ratings and reviews. Who’d have thought we’d get to the point of embracing a technology platform enough to hire a taxi with an operator who has no specific qualification and drives his private vehicle? Or book a room on a smartphone in a stranger’s home in another part of the world?
It’s all quite fascinating, but how does that really translate to legal tech platforms, if at all?
In the legal tech industry, companies like Avvo, Rocket Lawyer, and LegalZoom have all established marketplace, business models.
To customers, they have achieved this by creating automation for their legal forms and documentation. They have enabled their clients to choose the particular legal services they need. Further, they do this using transparent pricing. Individual or small law firms reap the benefits from an easy way to get new clients.
Legal Technology Documents
These legal tech companies work in consumer, retail, and small business niches. Precedents, documents, and simple legal assistance are all examples of the automated service. They have fully produced a group of legal services— forms to deal with employment law problems, how to set up a small business, wills, etc.
According to Clayton Christensen’s theory of disruptive technologies, this entrance into the low end of the market is where all new arrivals start. They do this as they pass from the bottom to the top.
Legal Tech Companies
We’re beginning to witness evidence of innovation in bigger law firms. These firms share some of the features of new legal tech platforms. They provide a suite of online services or “knowledge products.” A recent blog post at the Prism Legal Review of Cadwalader Cabinet is an example among many. It is a web legal service covering the financial regulations established by Cadwalader Wickersham & Taft.
Some of these online services operate at the commercializing end of the Robot Curve. There are also individual companies competing with Rocket Lawyer, LegalZoom, or Avvo. They offer forms, documents, and limited legal advice to medium and small-sized enterprises and start-ups.
Further, some of the firms that are produced by law firms are exceptionally innovative. These also reach niche audiences, such as Goodwin Proctor’s Founder’s Workbench. Also, some provide very limited knowledge and information in highly technical areas of law, such as Allen & Overy LLP.
Legal technology providers are also starting to experiment with the platform model by integrating tools and solutions into the workflows of a deal or case. It will be exciting to ascertain whether technology platforms like HighQ will encourage law firms to make more platform-like experiences for their own clients.
So, are we ever going to see the so-called Uberization effect in the legal industry? Could legal tech be the only way lawyers can offer legal services in the future?
First, we need to evaluate whether legal clients really value the social characteristics of customer rankings, ratings, and reviews. I can’t see why they’re not supporting people or small business clients to find simple answers.
Even in a controlled profession, accessing a single web page and a product that points in the right direction to a competent lawyer is better than sifting through Google search results pages. It takes a lot of time to search for local family lawyers in Ontario or British Columbia, Canada. Further, how do you know who is the right lawyer?
It’s not clear, though, that this will be carried out for larger clients or more complex cases. Confidentiality, conflict, and privacy issues, as well as the more complex personal relationship and networking dynamics of larger clients and firms, will hinder the public sharing of information.
Second, it will be fascinating to see how successful new technology tools in the Canadia Legal Tech Startup ecosystem become. To customers, the benefit is to make it easier to recognize, locate, and buy legal services. Law will be provided through more streamlined services with consistent and low-cost pricing. Or maybe through more specialized solutions that can be generated by a referral to a senior lawyer.
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But our legal needs don’t always fit nicely into prefab boxes. Sometimes legal issues are too complicated to fit into a solution provided by a tech company.
On the lawyer’s side, the advantage of these legal products will provide greater access to clients. Some legal tech companies provide better digital storefronts than many law firms can do on their own websites.
If more clients start shopping for lawyers, the reasons for not joining such a platform can disappear. Further, as we’ve seen with Uber, many people may not like new models, but if there are sufficient rivals willing to go along with that, pundits may not have much to say about the matter.
In conclusion, none of these value proposals will automatically be part of the legal market. The greater the value that is created, the more likely people will use the legal products.