Jun 13, 2011
Will Legal Services Bidding Sites Gain (Real)Traction?
I’ll be honest with you. I’m not a fan of the concept but I haven’t dismissed it out of hand, either. As I piece various issues together I am seeing this may very well be a serious trend for the future for a number of reasons - least of which is the economy and our country’s love affair with technology and online bidding sites in general.
The question remains – who will do it right and win the race?
As you know, a while ago there was a whole lot of fuss made about a new reverse bidding site called Shpoonkle. It’s a crazy name and there was a whole lot of criticism leveled at the concept of this company, its founder being a law student who wanted to help new lawyers struggling under debt, give them a fighting chance to get clients while helping those with monetary challenges get lawyers to assist them with their legal matters. Established lawyers saw it as a nail in the coffin of professionalism and a new low in legal marketing.
However, legal (and other professional) services bidding sites are nothing new. (This Law Review Note is from 2001 which makes it even more intriguing to me.)
“An Internet market researcher recently predicted that consumers will spend $222 million for online legal services this year and that the market will grow to $2.8 billion by 2004.”7 Lawyers are readily taking advantage of this new market by advertising, providing legal services,8 and even participating in auctions for legal services online.9
At the end of 2001, there were “close to 100 Web sites that aim[ed] to match lawyers with clients online.”10 These included sites that were simply online directories of lawyers as well as online auctions.11 Many Americans see the appeal of online auctions.
According to one commentator, “At least thirty-one percent of Americans who access the Internet regularly, or about thirty-five million people, participate in online auctions.”12
Four online legal services bidding sites were analyzed in this law review article to address the various ethical issues: Legal Match, LawyersQuotesFast, eLawForum, and FirmSeek. (These sites existed at the time the law review article was written and in the format described by the Note. They may no longer exist in this exact format or under the name or url posted.)
The point is legal services bidding sites are nothing new and have been reviewed, analyzed and challenged for over a decade and yet the concept persists whether with the companies named above or new companies. This ‘Note’ drew the following conclusion:
This Note concludes that most of the online auction sites for legal services are referral services; therefore, they must be regulated and approved by the appropriate state authority. These auction sites also must be designed to limit the risk of harm to consumers by avoiding the unauthorized practice of law, loss of confidentiality, conflicts of interest, and harm due to consumers’ lack of understanding of their rights and responsibilities in such transactions. These sites are beneficial in that they create competition and may result in a lower cost of legal services; but, given the risk to consumers, the sites that target individuals are generally not well suited for complex legal services. However, using these sites to match consumers with lawyers for routine legal services—name changes, simple adoptions, simple wills, and simple bankruptcies—poses fewer risks to consumers and should be permissible.
While this note concluded the ones mentioned above were referral sites and as such had to abide by rules governing referrals, companies such as Total Attorneys , won a highly publicized challenge to their business model, (which, by the way, is not a lawyer bidding site but does have a lead generating component to its services) getting ethics panels to concur their model fell outside the scope of ‘referral’ as defined under the rules of professional conduct.
The reason I’ve started to investigate further is because in my capacity as founder of Solo Practice University® I am approached frequently by startups (and very established companies) to look at their offerings and whether or not they have value to the solo community.
Recently, I was approached by a large publicly traded company with a lot of money behind them who is about to launch a new lawyer bidding site in their ‘legal vertical’. It’s fair to say they have done their homework about the market place, have more current statistics, and are seeking to capitalize upon it. They’ve also seen the weaknesses in previous models and are planning to rectify them. How successful they’ll be at it, I don’t know.
Many companies like this tend to forget there are two parties which must come together voluntarily – the consumer and the lawyer. Many forget that lawyers can’t be forced but must participate willingly without feeling it compromises the profession or themselves. They must feel they are actually participating in a public good because it is a radical change in their traditional thinking when it comes to reaching new clients.
Over the years, I’ve also talked to or had e-mail with other lawyer bidding sites which have changed their business models to shore up weaknesses or respond to poor perceptions. They have also seen rapid growth in the ‘bidding’ aspects of their businesses.
It was also why I didn’t out-of-hand condemn the concept/introduction of Shpoonkle when a press release came into my e-mail box.
At some point, there is going to be a breakout company/business model that is going to captivate both lawyers and the consumers at just the right time with just the right message and it’s going to capitalize effectively upon this country’s increased involvement (and love affair) with online auctions and need for access to affordable legal services.
I’m now pretty convinced it is inevitable…I just don’t know who this breakout company will be or when they will arrive.
What do you think?