Wal-Mart Efficiency With Neiman Marcus Feel

[In the future] The lawyers who succeed will combine Wal-Mart Efficiency With Neiman Marcus Feel.

So says Thomas Morgan, a law professor from George Washington University, to the Florida Board of Governors and the Young Lawyers Division board at their recent joint Palm Beach meeting. This in the wake of the current upheaval in the general economy and the law market specifically. Globalization barreling around the globe, law schools churning out too many graduates, and the rise of internet-based legal services such as LegalZoom, TotalAttorneys, and RocketLawyer. All of them combine to put more pressure on lawyers to deliver high-quality, low-cost legal services than has ever existed.

RocketLawyer in particular drew much attention this past week when it was announced that Google had invested $18.5 million in the company. RocketLawyer is a bit different from LegalZoom in that it claims that it coordinates all contracted legal work with practicing attorneys from the appropriate jurisdiction. In the wake of the investment, LegalOnRamp CEO Paul Lippe postulates that,

Today’s announcement that Google is investing in Rocket Lawyer—and will apparently use Google Docs as the basic productivity platform for small law firms—is another indication of the Google Maps-ization of law. Information that is already known will be organized to be more available. Business models built on information scarcity will be have to be revamped. Standards will emerge. Clients (whether big companies or individuals) will be reluctant to pay for reinventing the wheel. That doesn’t mean that lawyers will be “commoditized.” There are a whole range of skills that will continue to be valuable, from advocacy to judgment to counseling to expertise to how to organize information. Big company legal departments and the law firms that serve them will probably approach this somewhat differently, managing collaboration and confidentiality in dedicated systems.

But just as Lewis & Clark didn’t re-invent canoe-making for their expedition, but leveraged what was already known so they could solve new problems, lawyers can’t sustain business a model predicated on reinventing the wheel in a Google-y world. That’s the New Normal.

But What About Quality?

The news surrounding Google’s investment in RocketLawyer has many people talking about the cost-saving to clients. Or the efficiency of service. Or the convenience that these new services will provide. Somewhere in all of the excitement that this new technology provides – any mention of providing high quality, competent, experienced legal services to clients seems to have gone missing. Convenience and cost-saving are to be lauded and sought after. Too long has the legal industry been able to coax by without any sort of push for efficiency in its products and services. But the practice of law is distinct from other businesses as well. At some point, the push for efficiency can become overwhelming and dangerous.

Lawyers are advocates. Yes, we should use technology to make ourselves more accessible to clients or to help streamline boilerplate work and services. But we are also here to step into other people’s shoes and assume their problems as our own. That does not mean working through some documents at a break-neck pace, or letting a form generator create a contract that a lawyer gives a cursory review. It means spending half and hour on crafting a one paragraph email to a client to make sure it is as clear and helpful as possible (while only billing .1). Or proofreading that brief 18 times before filing it because it has to be absolutely correct.

At some point it has to be about more than Wal-Mart efficiency and Neiman Marcus “feel.”

It has to be about Neiman Marcus service.

__________

H/T to the Legal Skills Prof Blog for this story and staying on top of these developments. Read more here and here.

Tags: economy, google, lawyers, legal services, online, quality

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7 comments

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DiligenceEngine

As an ex-Biglaw midlevel associate, I share your appreciation for spending half an hour on a one paragraph email trying to get it perfect. But I think technology will really help legal work product. I'm biased: I now run a software startup trying to automate part of my old job. Two points on legal tech: 1. Computers have the potential to do many lawyer tasks better than people ever could. This is especially true for a number of junior corporate Biglaw tasks. I go into more detail in a company blog post. 2. I think there will still be a large market for the excellent (and expensive) service provided by top end law firms. But a lot of legal consumers would rather pay LegalZoom 10% of the cost to get a document that's 80% likely to be right for them, rather than pay traditional lawyer prices for a document that is 95% likely to be right for them.

shg

I'm not sure what to make of DiligenceEngine's comment, whether it's merely spam intended to spread its product by posting inane comments that contribute nothing to a discussion, or whether this is truly the depth of thought he has to offer. I suspect the former, but write as if it was the latter. Your second point reflects the understanding of a midlevel biglaw association, meaning someone who has no experience dealing with ordinary people in need of legal services. They are indeed thrilled to pay 10% of the going rate for legal services to a business like Legal Zoom, but they expect it to be 100% perfect for their needs. No 80%. No 95%. Perfect. And should they find out it's not (as some portion necessarily will), they will go ballistic. This comes not from years of work in document review or reviewing merger agreements or depositions, but dealing with ordinary people. They aren't hedging bets, but saving money, with every expectation of complete satisfaction. The problem isn't that there are inexpensive alternatives, computer programs for example, that can serve the legal needs of the majority with common services, but that no individual is prepared to sacrifice his legal interests to be par of that portion for whom the inexpensive concept fails. They don't mind an 20% failure rate, provided they're in the 80%. Once they realize they're the goat, all hell will break loose.

DiligenceEngine

shg, I'm sorry you feel my comment didn't contribute to the discussion. Given your reply, it looks more like we disagree on legal tech than that I didn't say anything useful. But anyways. Let me revise what I said above: I think consumers are more likely to get better standard documents with well-programmed software than they are by using a lower-end lawyer. As you note, my legal experience has come largely through helping large companies do things when price is not an issue as opposed to dealing with ordinary people. That actually gives me an advantage in looking at this situation. Specifically, my clients were much more concerned with quality than price. And I think I could have done much of my work better with the help of tech. The ordinary people served by services like LegalZoom are much more price sensitive and accordingly their lawyers can't spend anywhere close to the time I got to on a document to get it right. So, to the extent better tech could help at the high-end, it should help even more on lower cost work. I haven't ever used LegalZoom, Rocket Lawyer or any similar service and so can't speak to their individual quality. But from my experience in high-end law, my guess is that a well-programmed service could do a better job in a standard situation than a lawyer, especially a hurried lawyer. I agree with you that customers will be very unhappy if their legal documents are wrong, irrespective of what they paid. But price matters. And I think many consumers will understand that there's an element of "get what you pay for." Also, as above, I think well-programmed software can do a better job for typical users than a lower-end lawyer can. Let's see how it all comes out. My bet is services like LegalZoom and Rocket Lawyer will capture more and more of the ordinary person market. Even as customers realize that these services make mistakes too.

DiligenceEngine

I wouldn't typically introduce myself at a cocktail party as "DiligenceEngine" or "Dil" but next time I meet someone at a cocktail party named "shg" I'll make extra sure to use my proper name. Seriously, your complaint about my writing under a business name is fair. I do it because our company has a perspective: that some (Biglaw corporate) legal tasks can be done better by software. People who agree with our company perspective (and who are Biglaw corporate lawyers) might like to try our product when it's released, and using the company name for comments helps further that process. While I believe what I'm writing, I would like people to know about and use our product. So my comment is both a contribution to the discussion as well as a means to tell people what we're about. Whether suing LegalZoom becomes good business depends on how well it's programmed, meaning how much they have managed to consider all relevant legal issues. I have no idea with their product. But I do think there are a lot of legal tasks that software could do better.

shg

My primary reason for baiting you was to see if you were real or spam. That you responded tells me that you aren't here just to spam with your business website and name. That's a good start, even though it's sleazy to call yourself by your business name. I bet you have a real one. Would you walk into a cocktail party can introduce yourself as "DiligenceEngine, but you can call me 'Dil'." I fear that you are in fact correct, but for a somewhat different reason. People won't realize how things went off the tracks for years, so they will continue to use cheap products, realize intellectually the risk but accept it. Until a will is tossed and they learn the meaning of escheat. But then, the hottest new niche in law will be suing Legal Zoom.

Nathan

A Wal-Mart model works great for routine services that require almost no critical thought or adaptation to unusual circumstances and needs. I'd say that such services really shouldn't have to be handled by lawyers in the first place. A law license only becomes necessary when the judgment and specialized knowledge it represents are required. I say, let RocketLawyer-type services evolve to take care of the high-volume, low-cost, routine services that a paralegal or some well-crafted software could handle. Let them race to the bottom in price and to the top in efficiencies. But also require them to alert their customers (not clients), when they have a nonroutine issue or requirement, that is going to need a proper lawyer to handle.

Keith Lee

Ideally, I think that would be the best case scenario. There is a great amount of "routine" legal services that really don't need a lawyer other than it's initial drafting. However, considering the glacial rate of adoption of innovative policies and rules by the ABA and State Bars, I don't see that happening anytime soon. Not to mention that what lay people may think of as "routine" can quickly spiral out of control because they don't know the law. Who is going to walk them through the initial handling of a matter and perform the due diligence to ensure that a client matter is strictly routine? How is LegalZoom or whoever going to provide clear legal analysis at the rate of $39.95?Caveat emptor and the consequences be damned? I also wonder where the line between routine / non-routine will be placed. At some point in time in the quest for more business and relentless pursuit of the bottom line, some middle management / exec with no background in the law is going to start pushing for wider profit margins and expansion of business. There will be a push into areas that are "pretty routine" or "largely routine," in order to drive growth - to the detriment of customers (not clients). I'm for change in the legal industry. It's coming regardless of what anyone wants really - but I think it's going to be rough going through the transition. I'm also not confident that the right people are going to be in place to make these decisions.

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