Search practiceblawg posts:

Did you know there is more to practicelaw than just forms?  practicelaw is designed to be a repository of resources intended to help your practice.  Similarly, the MSBA’s practiceblawg is a blog for the Association to share with you how the MSBA can help you improve your efficiency and grow your practice.  The MSBA offers members a number of products and services and is always looking for ways to better serve its members and provide greater value.

Got questions, complaints, suggestions, or any thoughts in general?  Let us know:

Race to the bottom

by Joe Kaczrowski | Jul 09, 2015

There is much discussion about the justice gap as well as increased competition from non-attorney services. In terms of access to justice two underserved segments are those who cannot afford legal services and those who can but don't know how to find an attorney. In a free market economy, companies succeed by identifying untapped markets or offering cheaper solutions or more efficient services. Companies like LegalZoom and Sam's Club, for example, partnered to offer discount legal services to consumers.

As an attorney, can you go toe-to-toe with the LegalZooms of the world? And even if so, should you? The first is a practical or financial question, while the latter is a strategic decision facing attorneys. A popular term these days is "unbundling," or limited scope representation. Solutions like LegalZoom fit well with transactional work, where the end result is often a fairly standardized document or set of documents.

One way lawyers can compete for this market is through document automation and programs like the MSBA's mndocs. While an attorney may not be able to generate an estate plan for the $300 like LegalZoom through his or her existing processes, document automation can reduce time spent creating and updating documents by ninety percent. Lawyers, and bar associations for that matter, can work to convince the public of the value of attorney-drafted documents and the attorney-client relationship, but there will always be those for which price is the deciding factor. Document automation and the use of standardized templates can help lawyers compete.

For example, an annual subscription to mndocs in $175, and let's say it takes an hour to generate a basic estate plan using the tool (the MSBA is in process of updating and expanding mndocs content to include additional forms like basic estate planning material). To keep things somewhat simple, let's say an attorney typically bills $100 an hour for his or her services, and it takes him or her five hours to prepare an estate plan currently. For that attorney, trying to match the price offered at Sam's Club, $300, would result in a net loss for the attorney ($500 of billable time sold for $300). However, using a document automation tool to improve the process results in an increase in the effective hourly rate ($300 for one hour's work).

Barron Henley, who spoke at the MSBA Annual Convention last month and is currently featured in a CLE webinar series through MSBA Sections, also notes that many attorneys are unaware of the built-in capabilities of Microsoft Word, which can offer a lot of savings through the development and use of a set of gold-standard form templates.

Document automation can be used to improve process efficiency in non-transactional work as well. For example, VLN uses the HotDocs platform to help volunteer attorneys minimize the time spent drafting pleadings and maximize the value offered to those in need of legal services. Whether for pro bono work or litigation in general, document automation and the use of templates can increase a lawyer's efficiency. While you probably can't standardize fact-specific pleadings like memoranda and affidavits, there are several pleadings that differ very little between cases.

Another way to potentially reduce costs is through contract labor. Many MSBA members have indicated a willingness to provide contract services in the new Colleague Directory. Whether it's preparing pleadings or some other part of your process, contract services may provide a way to reduce the cost associated with that task.

Whether used to improve existing processes or to expand your practice to reach new markets and potential clients, document automation can help lawyers compete with online services like LegalZoom. Limited representation or unbundled services can offer lawyers an additional revenue stream to help bridge the gap between law school debt and annual income.

Additionally, there are a number of other supplemental income streams attorneys can try, including Rocket Lawyer and and a few others offer limited legal advice services; for example, with the service, users pay $39 for a 15-minute conversation with an attorney.

New challengers like LegalZoom and Avvo Advisor represent increased competition for lawyers, but they also demonstrate potential areas for growth. These services illustrate an unfulfilled demand in the market, and while the increased competition will keep pressure on pricing and ultimately revenue, tools like mndocs can help lawyers increase efficiency and effectively compete in the unbundled legal services market.