The Shpoonkle-ization of a Legal Profession w/o Doc Review Jobs

This New York Times articles has been making the rounds on Twitter and Facebook: Armies of Expensive Lawyers, Replaced By Cheaper Software. The focus is on how Watson-like computers can pretty much eliminate the need for flesh and blood document reviewers ergo eliminating the legions of lawyers who (for the most part) did not elect to do document review but couldn’t find other legal jobs.

Quantifying the employment impact of these new technologies is difficult. Mike Lynch, the founder of Autonomy, is convinced that “legal is a sector that will likely employ fewer, not more, people in the U.S. in the future.” He estimated that the shift from manual document discovery to e-discovery would lead to a manpower reduction in which one lawyer would suffice for work that once required 500 and that the newest generation of software, which can detect duplicates and find clusters of important documents on a particular topic, could cut the head count by another 50 percent.

On the heels of this article, I get a press release announcing Shpoonkle:

Shpoonkle works by having lawyers and law firms place bids on requests for legal work posted by potential clients. In standard auctions people bid against one another, forcing prices up so that the highest bid wins. But in reverse auctions, prices are driven down by individuals bidding to win at the lowest price. For example, a person needing a legal document, such as a contract, will or letter to a creditor, can fill out an online questionnaire and post it on Shpoonkle.com. Interested lawyers then place bids by specifying the lowest fee they would charge for that service.

Here you have a race to the bottom as lawyers bid against one another to pay the lowest fee to anonymous clients with legal problems.

Now, this site was created by an innovative, entrepreneurial law student and I am not interested in hurting him or his spirit because he may have found a way to pay off his student loans by getting lawyers to bid against one another until they receive their e-bay style reward in their inbox claiming, you’ve got it, ‘You’ve Won a Case!’

So, are you signing up? It’s free. After all, document review may no longer be an option unless you share Corinne Tampas’ thoughts on the rise of computer-driven document review:

Aside from the fact that the attorneys this software seeks to replace do not work for pricey law firms, but rather work for agencies as “contract” attorneys, there is no evidence to support whether this software cost savings will be passed on to the client.

To be clear, in a typical high volume document review, the high priced law firms contract with agencies. These agencies in turn hire the contract attorney at the going rate of $25 – $30 per hour, slightly more if the document reviewer has special skills such as a background in finance or engineering expertise or foreign language skills. Thus, while these attorneys are referred to as contract attorneys, they are really contractors since it is the agency that contracts with the pricey law firm. What kind of cost that is passed on to the client is anyone’s guess since attorney’s fees (the pricey law firm’s fees) are often protected by attorney-client privilege.

So, back to the buzz. That’s all that it is, buzz.

So, what do you think?  Is the NYT article about Watson taking over the legal industry just ‘buzz’?  Will lawyers really bid for cases like matchboxes on E-bay and clients pay $.79 for a will?

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11 comments on “The Shpoonkle-ization of a Legal Profession w/o Doc Review Jobs

  • True, no lawyers want to do that work. But that’s not to say that lawyers wouldn’t set up a practice, low-bid on matters and offshore the work to India or put it into a form and spit it out or have a paralegal do it.
    I’ve looked at t the site and I can’t figure out how it’s going to make money, though.

    • Carolyn, with enough traffic, enough lawyers listed there, enough potential clients with some form of a legal matter – it will attract advertisers who want that legal audience and that consumer. And since everything is done fairly anonymously, probably quite a few lawyers will try it out because the premise is there are so many new lawyers or dislocated lawyers who ‘can’t get work’ and still carry significant student loan they will try it.

      Or, for all we know, this site is funded by a much larger company who was not ready to lend their name to it in case it failed and they be villified by the very audience they sought. The only reason this thought popped into my head…I received a notice about Shpoonkle through a press release as its launch date is later this month ;-)

      • You’re right- sometimes I feel like Vinnie without a big firm behind me.. Anyway- Exactly! I am signing up today. How else can I get clients with all the attorneys fighting for market share in Miami- there’s only so many to go around. If there are clients then I can get my real fee without trying to look like a big baller and keep working.

  • I think attorneys will try it especially those just starting out with massive law school debt and no established client base. Do I think it’s great? No. But I also know that you get work where you can take it when you have bills to pay and a family to support.

    More than this type of bidding site, I think we will see a growth in the number of branded network concepts. This is where attorneys pay to be part of the network and a larger company is paying to advertise services to the public. They pull in the consumer with the offer of free to very low cost legal document automation services and then offer to refer them to an attorney in their jurisdiction if they are willing to pay for that extra service. There are a few companies out there doing this now. In some cases the consumer can continue to work with the attorney online, but typically it gets sent to an attorney in the network that is within their zipcode so it switches from online delivery to in-person. Still, the attorney is paying for those leads and then probably lowering their prices for the legal work because the consumer is coming to them with a portion of the drafting already completed. Attorneys who can’t afford to be a part of one of these branded networks might very well consider a bidding site to pull in online clients.

    • Stephanie, I agree with you. The real benefit, if this flies, is once an attorney and client are connected, the attorney as the opportunity to cultivate a long-term relationship with the client which takes the client out of the ‘auction’ site and into a permanent lawyer/client relationship. If there is nothing to lose and potential to gain…..

  • in this day and age, the paradigms are shifting in reference to typical business. musicians are forced to find new ways to monetize their talents since the online distribution of media and information has officially taken over. online media outlets are more profitable than print outlets, online shopping has taken more business in the past few years then stores themselves. this whole shift is slowly being applied to every facet of life. even medicine has had webMD for quite some time now. why not spread this all the way to the law office?
    many recording artists banded together to try to prevent online distribution and downloading of music and failed. shpoonkle will be the “kazaa” or “limewire” to the law community- legally this time. instead of ducking away from the client with “meetings all day” and not returning phone calls, emails etc, shpoonkle seems to offer the client a 24-hour access to an entire community of legal correspondence.
    if you are a lawyer and you say “i will not do this shpoonkle thing”, thats fine. but dont be too surprised if all of a sudden the lifestyle of huge expense accounts and 5-star hotels dwindles to a few bounced checks and stays at a motel. shpoonkle just like torrents will be the people’s choice for legal matters. its free for cryin out loud. how would you ever dream to compete with that? all the lawyers who are saying “no self respecting lawyer would do that”, are all lying to themselves about how scared they are.
    the truth is, everyone knows who ebay is. everyone knows who google is. everyone knows who facebook is, and guess what all of these services have in common with shpoonkle? they are all free. it would be more beneficial for these lawyers to figure out how to embrace and or manipulate this shift instead of trying to fight the forerunner of what will become the future.

  • My criminal law & family law clients, relatively poor as they are, will not be comfortable entrusting their liberty or their children’s care to a lawyer they hire blind. I am really not worried.

    -Dan Reuter

  • I’ll give it a pass, I’m just not ready to compete on price (experience taught me a hard lesson about Foonberg rule #1, so I’ll pass on seeing what ignoring rule #2 gets me).

    Do I think lawyers will try it – sure. Based on the press release and what information there is one the site, there appears to be little risk and, potentially, high gain, so it seems a sweet deal for the newly graduated/unemployed lawyer.

    Now, perhaps I’ve got my skepticism set way too high, or I just can’t wrap my mind completely around the economy of free, but I have my doubts that this is really a WYSIWYG deal – its sounds a little too good. Then there is the “no one knows if you’re a dog on the internet” question – while the site states that it will verify lawyers, there is no client verification, so how do I know that the “client” is really located in a state I’m licensed to practice in, really goes by that name, is not running a scam, etc.

    I have no doubt that the internet, virtual law practices, social networks, the economics of free, alternative fee structures, and informed clients are rapidly and evolutionarily changing the practice of law, I just don’t see shpookle as a paradigm shifter – its more like bit-torrents a, perhaps useful technology that readily lends itself to lawsuits.

  • Letting projects for bid is not a new thing, and from what I can tell it is not well suited for everything. Doing condemnation and eminent domain work for the Department of Transportation might be pretty well suited for letting, but services of a more personal nature would probably not be. Looking at other industries that rely on bidding might be helpful. Hiring the lowest bidder is common in commercial construction, but generally not in residential remodeling, for example, because the nature of the service is more personal and the client wants to hire a more qualified contractor, and perhaps one that can more likely be trusted entering their home and setting up equipment on their patio. Internet marketing hubs, have had very little success in that environment because private clients are sometimes unwilling to even solicit bids from somebody they have never met. Sometimes they won’t hire you if they don’t like the truck you drive. And even in commercial contracts the Design-Build method of delivery is more common now than ever, and partly because customers believe that they will get better service, and that contractors are more responsive, in a single source contract than through the traditional bidding method of delivery. I think that the legal profession, or those parts of the profession that are seen as personal services, has very little to worry about from a work distribution hub based on an e-bay style bidding process.

  • Honestly, I don’t think this will work for most of my clients. In my areas of practice, specialized knowledge carries a bit of a premium and I am the low cost provider relative to most lawyers I know. The problem on my end is more one of convincing the PC that they need a lawyer when they can handle it themselves “for free”. But what they often don’t think about is the cost of not hiring an attorney with the specialized knowledge that I am developing (this goes both for the nursing clients dealing with the Nursing Board AND my ambulance business clients dealing with Medicare/Medicaid/every other payor out there). The key, in my opinion (I am sure this is shared by Chuck), is occupying a niche practice where specialized knowledge is valuable and can be leveraged.

    However, this type of practice will affect those more “optional” services, like Estate Planning and Probate, Bankruptcy (not specialty niches, like Chuck’s) and other consumer oriented legal areas. These already are subject to substantial price pressures and a development like Shpoonkle will only serve to further depress a market that is already pressured by the likes of LegalZoom and other non-attorney providers of legal services. I also think that Stephanie may have the right vision – although I think that these branded networks will lead to a similar type of situation as HMO’s – what if your Legal brand provider doesn’t’ provide you with the right attorney, especially in a niche area where the insider knowledge is important?

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