The battle for the online legal document market hots up

Rocket Lawyer, the Google-backed online legal documents business, formally launches in the UK today.  It will sell consumers and businesses annual packages of legal forms and documents starting at £40 for individual users and £100 for businesses, and is aimed principally at small businesses and start-ups which wish to keep costs of legal compliance to a minimum. 

Legal document businesses tread a fine line in the need to avoid holding themselves out as the providers of legal advice without the necessary licences, and to avoid this problem Rocket Lawyer has signed up 20 law firms in the UK to its ‘On Call’ panel for those customers who need legal advice rather than simply documents.  The panel firms include Butterworth Solicitors, Freeman Harris Solicitors, and Glaisyers.

So will the venture succeed?  It certainly seems to be making waves in the US, where the business was launched.  In an interview with Forbes last year, founder Charley Moore claimed that in the US the company has 70,000 users a day and had doubled revenue for four years in a row to more than $10 million in 2011. That is impressive growth by any standards, and as a consequence the business has attracted investment from Google Ventures and Investor Growth Capital.

Rocket Lawyer is not the only business to have identified the opportunity to provide legal documents at a low cost.  LegalZoom began offering legal documents to the public in the US back in 2001, and in September 2012 it was announced that they had formed a partnership with the United Kingdom-based legal services provider QualitySolicitors (backed by Palamon Capital Partners) as part of which the companies will jointly offer online legal services in the United Kingdom including company formations and divorce documents.  LegalZoom claims to have over a million customers and, like Rocket Lawyer, has the backing of very significant businesses and individuals.  So ferocious has the fight for market share between these two companies become that LegalZoom have recently launched a legal action against Rocket Lawyer for false and misleading advertising.

It seems therefore that the principle of what LegalZoom and Rocket Lawyer are doing has been proven to work in the US.  Is there any reason to think it will be different in the UK?

One area of disappointment for me is that in relation to its UK launch, Rocket Lawyer is making a woefully small number of documents initially available.  Although the range of documents will undoubtedly increase over time I can’t help but think it is a mistake to launch with such a small number, as it will give those who are attracted early to look at the service a very poor impression.  It remains to be seen how many documents LegalZoom will cover at launch.

In fact, this type of service is nothing new in the UK.  Businesses such as Simply Docs (with which I have no connection, other than as a satisfied user) have been offering the online document service for many years, and have over 2,200 documents in their database, which makes the Rocket Lawyer initial offering look even more paltry, although the latter would differentiate its service through the ability to get legal advice if required through its lawyer panel.  The reality is that even though the databank of Simply Docs may be far more extensive than its newer rivals, the cash backing that Rocket Lawyer and LegalZoom enjoy, together with their high profile and well connected Board members, means that they can expect to make an impact on the UK market.