Will lawyers rise to the online challenge?

Lawyers are by nature generally conservative beasts. I well recall a conversation amongst some law partner friends when e mail first really started to become widespread.  The discussion concerned whether law firms should permit the use of e mail as a method of communication at work, and the general consensus was that although e mail would undoubtedly revolutionise communications in social spheres, it was unlikely to catch on in the business world, and certainly not in law where confidentiality, formality and precision were paramount.  It seems ridiculous to take such a luddite view now, but law firms carry on making the same mistakes again and again, becoming late adopters rather than embracing the opportunities that technology can offer.  But now that the LSA is in force, the speed with which the competitive landscape changes is likely to increase, as new competitors who are less bound by the old ways of thinking enter the market, and law firms can ill-afford to take the laissez-faire approach that they have in the past.

In all other walks of life, consumers have got used to flexible service delivery.  They can do their Tesco shopping in the middle of the night, book flights from anywhere in the world using a smartphone App, and pay their bills online without worrying about bank opening hours. Why should we in the legal fraternity assume that our services are immune from these changes?

There are a handful of forward thinking businesses which identified the opportunities that technology could offer long ago, and used them to challenge the usual paradigms of how to do legal business. Epoq, for example, is a legal IT company which has an online service (started as far back as 2000) which underpins the offering of many of the new market entrants and some of the traditional law firms who are starting to challenge the usual legal service delivery model, such as claimant firm Russell Jones & Walker.

In a study commissioned by Epoq and undertaken by legal research firm Juris, which was published in January 2012 under the title “Brave new Worlds”, Epoq’s Graheme Cohen says “There are firms that fear online processes and see them as a cheapening of the law, marginalising the role of lawyers and replacing a carefully crafted bespoke service with an influx of “pile em high, sell em cheap” legal products. That is based upon a misunderstanding of the role of online legal services.”

Cohen argues that online legal services assist with easing three ‘points of friction’ between lawyers and clients: accessibility, convenience and price. He suggests that online services can be deployed to deal with those concerns by enabling websites to become an extension of the law firm’s office. For example, integrating online questionnaires into a law firm’s website, which present the client with the same questions a solicitor would ask during a face-to-face interview enable clients to instruct a solicitor at their own convenience. And, as pre-programmed intelligence within the online questionnaire automatically generates a detailed first draft legal document for the solicitor to review, the process addresses the demands of consumers for greater accessibility, speed and convenience.  It’s difficult to argue with his logic, particularly in fields such as wills and probate, which lend themselves to relatively standardised questionnaires and work-flow logic.  Indeed, in many ways it is easy to see advantages of gathering all the initial data online, as it is not uncommon for clients to turn up for a meeting at a lawyer’s office without all of the information they need to give proper instructions.  Taking the detail online means that the client can ensure that all the information is complete before the “Submit” button is pressed.

The report also records that according to a recent study (YouGov SixthSense), the availability of online legal services was found to be a positive influence by more than four out of 10 respondents (42%) when looking for a solicitor.

So are we likely to see a rapid expansion of online services in the UK legal market?  Well, it’s a well worn cliché, but nonetheless often true, that what happens in the USA comes to the UK eventually, so it is helpful to consider what has happened on the other side of the Pond.

Epoq’s report concludes that the development of online legal services has taken off on the other side of the Atlantic in the face of considerable opposition from the legal profession. The online legal document service LegalZoom was readying itself for an IPO after raising $66 million from two venture capital firms, Kleiner Perkins and Institutional Venture Partners bringing total funding to $100 million. According to the American Bar Association Journal, it has served more than one million customers online in 10 years.

It is difficult to see why the UK should not eventually follow suit.  The question is whether the traditional law firms will take that market, or whether the new entrants will beat them at their own game.

It is interesting to observe that as the Internet became more established, Epoq partnered mainly with non-law institutions seeking to build a presence in legal services, including MORE TH>N in 2002, (the first insurer to move into the consumer legal services market), and now HBOS, AA, Saga, NatWest, RBS, Barclays and Allianz, amongst many others.  These sectors were more open to embracing the Internet as a service delivery channel. Cohen believes that “The legal sector was and, to a large degree, still is, nervous about online and very reluctant to adopt it, mistakenly believing it will undermine the solicitor-client relationship.”

There is potentially a big prize out there for the firms willing to grasp the opportunity.  But what is not yet clear is who will emerge as the winner.

A full copy of Brave New Worlds can be found here: http://www.epoq.co.uk/press/2012-01-24_New_thinking_in_legal_services.pdf.