LegalZoom and the Rise of Online Legal Self-Help

Rick Georges, a member of Team Shlep, had an interesting posting last week at his Future Lawyer weblog about LegalZoom Online, which calls itself a “Legal Documentation Service.”   Saying “We can help you take care of common legal matters – without an attorney,” LegalZoom explains that you can ”Save time and money on common legal matters! . . . [and] create reliable legal documents from your home or office. Simply answer a few questions online, and your documents will be prepared within 48 hours.* We even review your answers and guarantee your satisfaction.”  (via Oregon Legal Research, Jan. 17, 2007)

After taking a look at LegalZoom, Rick says “lawyers who don’t use technology will not be able to compete.”  He explains:

“We need to offer legal advice AND document drafting at a competitive price, or we will not have to worry about law practice anymore. It will be gone. There is no subsitute for a competent lawyer’s advice. However, we need to give the public value, or they will go elsewhere.”

Many publications have written about LegalZoom, but Rick’s nudge got me to spend some time at the website over the weekend.   It is an impressive enterprise, offering document creation services in the following areas: Copyright, DBA, Divorce, Immigration, Incorporation Services, Limited Partnership, Living Trust, Living Will, LLC, Name Change, Patent, Power of Attorney, Pre-nuptial Agreement, Real Estate Leases, Small Claims, Trademarks, Will.

LegalZoomN Furthermore, the advantages that they boast about — reviewing your answers for correctness and completeness; having assistance available at a tollfree number; using advanced provisions that are not found in simple “do-it-yourself” kits or manuals; printing out the documents themselves on good paper stock; “per project” and “lawyer-free” pricing that is far below what a lawyer might charge using hourly fees (they say up to 85% and give an estimate of the savings for each service); and a 100% Satisfaction Guarantee — would surely appeal (if only they knew about it) to many legal consumers who want to save money and keep control of the project, but are wary of, or don’t have time for, acting on their own.

LegalZoom also has an Education Center/Library, that “allows you to access the information you need to research your legal questions and make informed decisions” (e.g., FAQs, Legal Topic articles, Glossary, and Non-Legal Resources).  For example, see the Prenuptial Library.  The materials are available to anyone and seem like helpful introductions to the many topics covered.  In addition, you can fill out the LegalZoom questionnaire for each procedure for free and “At the end, you may decide whether or not you wish to purchase.”   That process may help many consumers decide whether they can go it on their own — using forms and information prepared by a court or by a self-help publisher — and/or need the direct advice or (unbundled) services of a lawyer.

I can’t endorse LegalZoom as a product, but I can say that it appears to be worth considering by consumers who need lawyering services.  The apparent success to date of LegalZoom is, I believe, an important milestone in the market for legal services.  Americans like to use a product or service that they have heard about and that has a track record; and entrepeneurs are much more likely to enter the market with competiing services (perhaps focused on a particular state or legal subject) if they see a model that works.   As Rick Georges suggests, lawyers — especially those serving the everyday, common legal needs of the average consumer or small business — may find themselves at a great disadvantage if they do not figure out a way to offer comparable value to their clients (in service, results and price).  Document-creation technology will surely be a part of that value package, allowing fees to be lowered because far less time will be spent with each client.

Having said that, I am not at all certain that the change — a revolution that brings true price and service compeition to the lawyering marketplace, and creates more viable choices for consumers – will benefit a large percentage of consumers any time soon.  Under the fold, I have excerpted a posting from my weblog f/k/a, ”Internet Lawsites Encounter the Profession’s Guild Mentality“ (Sept. 16, 2003) that discusses why the legal profession’s “guild mentality” has kept if from adopting new techology and responding to competitive forces, as lawyers try to hold on to income, control, and status, in the face of a new breed of consumer. ComplaintBill Excerpts from “Internet Lawsites Encounter the Profession’s Guild Mentality,” Sept. 16, 2003, at the ethicalEsq-f/k/a weblog:

. . . [M]y experience looking at learned professions from the competition-consumer perspective tells me that the real culprit [in the failure of websites offering legal services] is the historic “guild” mentality, which fears and opposes virtually every type of innovation in services or marketing.  This is especially true if most guild members see themselves as threatened with the loss of business and income, the need to become more efficient, or the pressure to engage in price or quality competition.  In addition, in the last few decades, doctors and lawyers have been most reluctant to cede their position of unquestioned authority to mere consumers.   (see our posting on Sept. 4, 2003, discussing the new breed of client and unbundling) . . . .

sharkS I’m not saying that there will never be a financially viable format for delivering legal services online.  I am say, however, that expecting a broad and significant amount of interest from the bar or its members is unrealistic.   Most likely, individuals or small groups of lawyer-entrepeneurs will have to carve out target markets of consumers and attract them to their sites.  Piggy-backing on the self-help services of courts — by offering complementary unblundled services — might be a good place to start.  Just remember: the guild won’t make the efforts easy. . . . .

P.S. Sherry Fowler (a/k/a Scheherazade) at Civil Procedure Stay of Execution . . . left a Comment worth sharing here on the Home Page:

There are so many circumstances in which a sensible, practical, reasonably priced solution to a client’s problem needn’t involve a lawyer, or needn’t involve a lawyer for long. Why on earth should acknowledging that be so antithetical to so many lawyers? It’s absurd.

Editor’s Reply: I don’t know if this was a rhetorical question.  If not, my pithiest answer would be: fear of losing dollars, control, prestige.

More expansively, it seems that most lawyers expected a very good lifestyle to come automatically with their J.D., along with high social status.  They are angry and worried that the marketplace doesn’t value their services as highly as they had expected, and they are bewildered that society doesn’t give them the anticipated respect.   Good intentions of any one individual lawyer can be readily overwhelmed by the demands of partners (at work and home) to keep the income stream flowing.   The result, as individuals and as a group, is resistance to any change that threatens to further undermine their financial and social position.   As stated with refreshing candor in a recent bar association publication, “the top concerns of the practicing bar are the economics of the practice and the image of the profession.”     (Illinois State Bar Association Bar News, June 16, 2003)

[thanks to shlep]

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