The Estrin Report

The Uberization of Legal Services & Why Ignoring It Wipes You Out of the Field

Richard Granat, a legal icon in this field, has written a blog piece that whether you are paying attention or not, need to know if you want to continue in today's legal market: http://bit.ly/1Cp5vt0. I exaggerate not.

The Uberization of Legal Services

By Richard Granat on June 19, 2015    Posted in Law Startups, Limited Scope Legal Services, Unbundled Legal Services

Richard has been my "secret/silent/unbeknownst to him mentor/idol/well, you get the picture/now for 20++ years. Everything he does is in advance of the trends. Everything he does is right. Every move he makes is spot on. Here's the latest. I strongly urge you to pay attention whether you are an attorney, non-attorney or wannabee. It's one more time you'll be glad you did:

The legal profession will not be immune from the rise of the uberized economy. Consumers want to purchase only the legal services they need. This means that the trend towards offering “unbundled” or “limited legal services” will continue to accelerate as the most economical way for consumers to purchase legal service is by the “task”, rather than the hour.

Think of “task rabbit for legal services” – legal services at the click of a button on your smartphone.

The new virtual marketplaces connecting lawyers with clients for the purchase of specific legal tasks will also accelerate this trend. These legal marketplaces are a response to the inefficiency of bar-sponsored legal referral programs (the subject of another blog post to come), and the desire of consumers to have a more transparent way of selecting attorneys to solve their legal problems. The last few years has seen the ascendency of these legal marketplace platforms.

To name just a few of these new legal marketplaces, look at:

• Avvo  – “Get legal advice from a top-reviewed lawyer on the phone – $39.00 for 15 minutes.”
• Bridge.US – “Top attorneys and easy-to-use software that make immigration delightfully simple”
• DirectLawConnect – “FInd a fixed fee online lawyer in your state now.”
• Hire an Esquire – “Legal staffing redefined online.”
• LawDingo – “You won’t believe how simple and affordable it is to get a lawyer;s help.” “$50 for a telephone consultation. Other projects for a fixed fee.”
• LawGives – “Get free quotes and consultations from trusted lawyers in 100+ cities”
• LegalHero – “Law Done Better. Experienced attorneys for your business at clear, upfront prices. ”  “No hourly rates. No retainers.”
• LawKick – “Find the right lawyer at the right price”
• LawNearMe – “Law Near Me offers an attorney referral service to help you find the legal representation you need in a variety of areas.” “ZocDoc for lawyers”
• LawZam -“Free legal consultations by video-conference.”
• LegalZoom – “Find an attorney you can trust for your family for $9.99 a month”
• PrioriLaw – “lawyers hand-picked for your business.”
• RocketLawyer – “Legal Made Simple”
• SmartUpLegal – “Quality Legal For Startups and Business.”
• UpCounsel – “Hire a great attorney for your business. Fixed fee projects”

Some seek to link consumers with lawyers who charge their regular hourly rates, but the marketplaces that will scale are those that offer limited legal services for a fixed fee, ideally powered by technology to keep legal fees low. These new vertical marketplaces will serve what Richard Susskind has called, “the latent market for legal services.”, but in the fullness of time, the “limited legal services” approach will move up the value curve serving small business and eventually larger business entities and more affluent clients.

Not all will survive as many cannot generate the traffic to justify the fees charged to lawyers or consumers to participate in a particular platform. Survivors will be those platforms that can generate consumer traffic and which can scale their offerings. A likely winner could be AVVO as it leverages its huge consumer traffic and large lawyer data base into delivering legal services for a fixed fee.

Some larger law firms will adopt this independent contractor labor model using contracted labor to perform tasks for their clients. This is already happening in the United Kingdom. See: Lawyers on Demand; RiverviewLaw; and Peerpoint from Allen & Overy

The services that will scale the most will be smart legal software applications that can do a task for the fraction of the fee that a lawyer can charge for the same work.

As the idea of offering limited legal services goes mainstream, powered by these new marketplaces, consumers will benefit through more affordable, accessible, fast, and transparent legal services.

The legal profession, particularly solos and small law firm practitioners, will not benefit as much as the consumers they serve. Here are some of the negative consequences:

• A downward pressure on legal fees;
• More competition for solos and small law firm practitioners;
• Lawyers will have less or no social structure to support collaboration and cross-communication with peers;
• Newly admitted lawyers will lack the training and professional development structure for them to really learn how to practice law. (as law schools don’t really train lawyers to practice law).
• Less organizationally sponsored fringe benefits for lawyers.
• Loss of control of a client base, as clients are attracted and owned by the new legal marketplaces;
• Reduction in the size of the legal profession as it becomes harder to make a living as a lawyer, with a consequent reduction in the number of law schools – particularly those that turn out lawyers for solo and small practice but continue to teach the a purely doctrinal approach to law and law practice.

Recent litigation in California where California judges have rule that the issue of whether drivers for Uber and Lyft are independent contractors or employees will have to be decided by a jury suggest that the new  rules the apply to the new ‘sharing economy” are not so clear. It will be interesting to see at some point in the future whether a group of lawyers -so-called independent contractors- might sue their platform provider or an AxiomLaw, on the theory that that the platform that they are using exercises so much control that they are really employees and entitled to the benefits of being an employee. See generally:  1099 vs. W-2 Employee Classification Infographic from Hire An Esquire.

Surely, the legal services industry is continuing to evolve driven by Internet-based innovations.

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TAGS: Competition, law, Legal Fees, Legal Referral, LegalZoom, Marketing On-Line Legal Services, sharing economy,uber, uberization, Unbundled Legal Services

Paralegal Jobs Are Vanishing According to New AP Analysis

Bad, Bad News for Paralegals

Paralegal jobs are vanishing according to a recent analysis.  In fact, out of the top disappearing jobs, paralegal is in the top 7 positions.   

For years, the Bureau of Labor Statistics predicted that the paralegal position was one of the fastest growing fields.  In fact, as recently as 2011, the BLS predicted that from 2010 - 2020, paralegals would  have an 18% growth rate (average). No longer. 

The position is being obliterated by technology according to a recent analysis by the Associated Press.   "Year after year," the analysis states, "software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done. For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines."  Here's a great example:  travel agents -  similiar to paralegals in that it is a "helping" position.  Now, gone due to technology.

Unfortunately, paralegals are included in the millions of middle-class paid jobs vanishing, the most vulnerable being those jobs that are "routine and repetitious."  That particular phrase was actually in the ABA definition of a paralegal some years back.  How little we knew.

"There's no sector of the economy that's going to get a pass," says Martin Ford, who runs a software company and wrote "The Lights in the Tunnel," a book predicting widespread job losses. "It's everywhere."

Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What's more, these jobs aren't just being lost to outsourcing and they aren't just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers.

They're being obliterated by technology.

What is effecting the paralegal field in addition to technology?  Law firms today are seeking highly sophisticated and experienced paralegals. Those without technology knowledge and ability are at the highest risk.  Those who are not updated on the latest laws, procedures and who are not innovative or motivated are also at a very high risk.

Additionally, the five-year recession has seen associates dropping their level of assignment to cover paralegal duties in order to put forth enough billable hours. Rocky law firms, rather than see paralegals as cost-efficient and saving attorneys time, view the higher associate rates as more beneficial to the firm despite the fact that paralegals cost less and are frequently more profitable. It can make the top line more impressive resulting in the potential for higher bank loans, revolving credit lines and more. 

What can paralegals do to reverse the trend?  Maybe not much given the trend affects just about every service and manufacturing position.  However, you can leverage your paralegal background and propel yourself into new or  hybrid positions.   Here are just a few: 

• Become a technology wiz in your specialty.  Software programs come and go and are updated frequently.  Being a wiz also means you are on the prowl every day for the latest trends and new programs.
• Hot jobs are hot as long as the economy holds up, the specialty doesn’t cool down or schools do not answer the call to churn out trained candidates.  How familiar are you with the future of your specialty? If you were previously an ERISA paralegal, chances are you no longer hold that position.  Mergers & Acquisitions specialists were big losers in the recession.  If you were in M&A, did you prepare for an upcoming recession with a second specialty? Cross training is one way to make yourself more valuable in a firm. You may be the best paralegal the real estate department has but if that entire department is being shutdown, it won’t matter. But if you are also good at litigation, you may find yourself being moved into that department.  If not, you know why you may have been out of work for a long time.
• What transferable skills do you have?  Take a good, hard look at your background.  Medical background? Construction? Insurance? Teaching? Police? Accounting? How can you combine your skills and leverage that background - even in a different field.    
• Use social media to get your reputation well-known. We've said for years: network, network, network.  Use LinkedIn.  Make sure you have tons of connections. You just never know who knows what and where.
• Expand your skill sets.  Are you a litigation paralegal without comprehensive eDiscovery knowledge?  You're on the target list, believe me.  I have listened to many, many paralegals declare that their firm does not "do" eDiscovery, so therefore there is no urgency to learning about it.  These buggy-whip, short-sighted paralegals are in for a big surprise if their firm starts losing business as a result and they are the first to go.  (BTW, the Organization of Legal Professionals, OLP, offers many online courses in eDiscovery and Litigation Support:  www.theolp.org).
• Be prepared to move into a different position all together.  For example, the Litigation Support field has a shortage of professionals schooled both in law and in technology.  Who better than a paralegal to move into a Litigation Support position?  The pay is excellent, the opportunities for the future very good.  The field will eventually evolve into something that we probably have not even envisioned, particularly since the legal field was one of the last to get on the band wagon.

Don't be short-sighted. Change is here to stay and in this century, most of us are not prepared for how fast it is happening. My strongest suggestion is to ride the horse in the direction it is going.  You'll be glad you did. 

 

Wanna Buy a Watch? Legal discount deals space gets bigger

The discount deals space just got a little more crowded with a niche site that offers deals specifically geared to lawyers. MyLegal.com, LLC, has introduced the world’s first Legal Vendor Deals Program where service providers from over 100 verticals offer deals to lawyers and other legal professionals.      The Legal Vendor Deals program is the first of its kind to combine discount deals with vendor Ratings & Reviews. Law firms can now turn to a single website for vetting prospective service providers around the globe and getting deals that they can pass along to their clients.      “Everybody wins,” said Lisa DiMonte, CEO of MyLegal.com. “Vendors can now leverage the power of client satisfaction to win more business, and lawyers get discounts from reputable service providers. We believe our new offering will revolutionize the way law firms make buying decisions, and we’re thrilled to be the first to bring this innovative business approach to the legal community.”      For the Legal Vendors, basic membership is free and allows users to create a Legal Vendor Directory listing that includes a comprehensive business summary, along with links to the company website. Members can upgrade to Premier membership, which provides the Ratings & Reviews feature and the option to offer a Legal Vendor Deal to the global legal industry.      Lawyers, paralegals, legal secretaries, and law firm decision makers may view all active deals from the MyLegal.com website and may also subscribe to receive daily notification of the Legal Vendor Deals. A link to the deal provides additional information about the offer, the business summary, as well as vendor Ratings & Reviews.      Unlike other popular online deals programs, there are no coupons to buy, no referral fees and no revenue share. The discount runs for a designated time period and is applied at the time services are invoiced. The no-middle-man approach allows legal vendors to offer the best possible deals to lawyers who, in turn, pass along the savings to their clients. For more information, please go to www.mylegal.com.

National Association of Freelance Legal Professionals Doubles in Size

 
Have you heard about the NAFLP?  (www.naflp.com) It's not a new organization, it's just been a little bit quiet in the 3 years since it started.  No more!  Finally, there's an active, sensible, fun, proactive organization designed specifially for freelance attorneys, paralegals, interpreters, consultants, and others making a pretty darn good living working for other firms.

The what? you say.  The NAFLP.  Started in 2008 by two attorneys, the NAFLP was a small organization brought about to create some standards and best practices in a booming new cottage industry - what we used to call contract attorney or paralegal.  Melody Kramer, co-founding member and IP attorney in San Diego, CA started the organization with a colleague.  They felt strongly that freelancers needed a central place for resources, networking, education and recognition.

I was given the opportunity to take the organization over from Melody. What a fantastic experience this has been.  The organization offers  over 100 webinars, a great digital magazine called FREELANCER, publications and more to its members.  There are individual and premium membership vehicles.  Premium membership offers members a one year free subscription to FASTCASE, the antidote to Lexis/Nexis and Westlaw.  FASTCASE usually costs an individual $995.00 per year.

NAFLP is also working on providing group health and dental insurance for its members as well.  Pretty exciting stuff if you're working at home in your jammies.    Here is why you want to join this dynamic and powerful association:

NAFLP's mission is to -

• Promote, enhance, and create standards of practice for the freelancing segment of the legal industry
• Educate and inform the legal profession about how to use outsourcing to legal freelancers as part of their business model
• Increase the quality of freelance legal services through education and business training

NAFLP's goals are to -

• Educate and coach legal freelancers in sound business practices, including marketing, service product development, and financial planning
• Educate legal freelancers in the art of developing high-quality freelance service packages for law firms
• Increase the visibility and credibility of NAFLP and its members in the legal community
• Offer training sessions to law firms in effective uses of legal freelancers within their law practices
• Create a network of relationships with affiliated organizations to provide member benefits
• Provide support to legal freelancers through networking
• Create a searchable database for NAFLP members for access by law firms
• Build a strong national association with quality resources
• Create best freelancer practices and cannon of ethics
  

For the $65.00 introductory membership, you can have access to over 100 webinars, teleconferences, free membership in the Organization of Legal Professionals (OLP), publications, telecoffee teleconferences once a month on first Wednesdays, incredible networking and the opportunity to get your name on the membership directory, the Freelancer magazine and more.  Sounds like a bargain to me!

Members have a voice in what's going on - and we listen.  I invite you to come with me on this adventure.  Somehow, I have a feeling it's going to be a good one.

 

"National Firms Stake Claim in Phoenix's Robust Economy"

Hmm, ever thought about moving to Arizona? Sounds like firms in Phoenix are heating up!

"It may be a dry heat in Phoenix, but it's also a hot legal market for some national law firms moving into the desert city to take advantage of the region's flourishing economy.

"Ranked the fifth-largest city in the nation with 1.5 million people at the center of a metropolitan area of 3.8 million, Phoenix has the fastest-growing population of any major U.S. city, with professional and technical jobs creating the biggest surge in its employment sectors.

"Law firms new to the area want a piece of the thriving hospitality, real estate, construction, aerospace and electronics industries. But the influx of national firms means that some firms with long-standing practices in Phoenix are feeling a pinch from the competition.

'The large national firms are competing for a relatively small number of people,' said Elliott Portnoy, chairman of Sonnenschein Nath & Rosenthal. The 658-attorney firm opened a Phoenix office in June 2006 with seven lawyers from Squire, Sanders & Dempsey."

"Lawyers ready for a boom in bankruptcy"

Yeah, good news for lawyers & financial advisers maybe; other people not so much:

"Business bankruptcy filings are down by 45 percent and corporate debt default rates remain near all-time lows. Yet bankruptcy pros are buzzing with anticipation.

"While they don't have crystal balls, call them cynical and firm believers in business cycles. Lawyers, consultants and financial advisers who work with troubled companies are getting ready for the next surge in business, which some predict may come as soon as the end of this year.

"'My experience over the last 20 years is that what goes up, must come down,' said Jeff Marwil, a Chicago attorney who last month left Jenner & Block to join Winston & Strawn's larger bankruptcy practice. 'Change is inevitable.'

[snip]

"To prepare, some big law firms have bolstered their bankruptcy practices by cherry-picking prominent attorneys from other firms. Marwil is one of four attorneys Winston & Strawn recruited. Kirkland & Ellis lured an attorney from rival Weil, Gotshal & Manges in New York. Top-drawer New York firm Paul, Hastings Janofsky & Walker opened its Chicago office with two bankruptcy attorneys from Jones Day."

"Bankruptcy Boutique's Lawyers Depart for Larger Firms"

Possible words of warning for people working in bankruptcy law firms, boutique or not:

"If it's tough to be tiny, it's even tougher to be small and specializing in insolvency.

"San Francisco bankruptcy boutique McNutt & Litteneker began shedding attorneys in the summer of 2005 in tandem with a drop in business. The firm several years ago had 10 full-time lawyers -- eight of whom were associates. Last month's departure of its three remaining associates have name partners Scott McNutt and Rebecca Litteneker not just running the show -- they are the show.

[snip]

"Lawyers in the bankruptcy field say it is a rare boutique that is growing -- or even holding steady -- today. Even at large firms, bankruptcy specialists have retooled to handle other types of work until the next upturn. Notorious for running counter to the general economy, the bankruptcy practice booms in recession and wanes when business is strong."

"Sheppard Mullin Launches Fashion & Apparel Practice Group"

This sounds like a very interesting group! Hmm, wonder if they need any paralegals?

"Sheppard, Mullin, Richter & Hampton is stepping onto the runway with the launch of its new practice group: fashion and apparel.

"From negotiating contracts for TV reality show 'Project Runway' to fending off UGG boot knock-offs, the new group is marketing itself as the go-to firm for Los Angeles and New York's booming fashion industries.

[snip]

"The firm's debut seminar during this year's New York fashion week advertised: 'Get the skinny on FAT [Fashion Apparel Team] law,' and displayed a sketch of a lanky model. The event featured talks on topics such as celebrity licensing agreements and modeling contracts."

Survey: IP & M&A Still Hot Areas

Good to know where law client needs (& $$$) are headed:

"Intellectual property as well as mergers and acquisitions are still red-hot practice areas, while insurance coverage and environmental law are cooling off, according to legal consultant Robert Denney's 18th annual 'What's Hot and What's Not in the Legal Profession' report.

"In addition, Denney said that interest in the Latin American legal market [PDF] is growing, and Chicago and Las Vegas are the U.S. cities now attracting the attention of law firms.

"The report compiled lists of trends in the profession in areas of business development, marketing, practice growth, mergers and management."