If We Can’t Beat Them, Let’s Compete With Them!

I’m never more mortified than when I see lawyers trying to shut down legal document preparation services like We the People which purportedly compete with lawyers – as the Illinois Bar is doing.  See Lawyers Protest Expanding Legal Document Preparers, Chicago Sun times (2/21/05).   I can’t understand why attorneys, who offer a valuable service, feel the need to put glorified typing services like We the People out of business.

First, to say that document prep services even compete with what lawyers provide gives those services credibility that they don’t deserve.  Document prep services don’t offer clients a lawyer’s expertise and legal knowlege.  Instead, they simply  take information from a form (completed by a client), generate a document – a living trust, a bankruptcy petition or uncontested divorce – and file it.   And for that, clients pay $199 (for bankruptcy) or $399 (for a living trust).   Agreed, these services generally charge less than attorneys – but not always.  However, they certainly cost more than if clients did the work themselves.

So why are lawyers threatened?   The bars (like ISBA) won’t admit that they’re trying to help lawyers preserve our own monopoly on legal service.   So the bars claim instead that document prep companies do a disservice to clients with shoddy work or improper advice.  Granted, that’s a significant problem.  But rather than try to shut these companies down, it’s our job as attorneys to persuade clients that the value that attorneys can add to living wills and bankruptcy petitions and uncontested divorces justify the added cost.   Moreover, client welfare can be preserved through less onerous means such as education or consumer protection claims.  Clients who believe that their cases were mishandled have sued We the People and the FTC has fined the company for deceptive advertising practices.  Those efforts should be sufficient to protect clients from the inadequacies of document prep services.

Moreover, in our haste to run non-legal professionals out of town, we lawyers forget that many of the clients who use these document service providers constitute business that we are never going to capture anyway because of cost considerations.  In the absence of these non-legal document services, many of these clients would probably handle their matters pro se.  Yet, according to this article in the Washington Post, a company like We the People generates $50 million in fees from 200,000 customers a year.  That’s a lot of lost business for lawyers.  We ought to try to capture it for ourselves by competing with companies like We the People.

And how might we do that?  Lawyers can try to come up with ways to provide simple, routine services inexpensively.  Perhaps there’s a way to automate the process – or to quickly review a form already prepared by a client.  Perhaps a lawyer could run a seminar on filing your own bankruptcy petition and charge $35.00 to a roomful of people who would then fill out the forms on the spot and have the option of filing them on their own – or paying an additional fee for a private consultation.  With podcasting now the rage, maybe a lawyer could put together a little MP3 on how to fill in a bankruptcy form that clients could download and listen to.   Clearly, there’s a demand for cheaper service – $50 million worth – and it just bugs me to let it go to providers who’ve not gone to law school.  But getting rid of those people won’t direct that $50 million pot towards attorneys – it will just result in fewer available options for lawyers who can’t hire attorneys.

Finally, those of you who’ve visited my website may wonder what gives me, an energy regulatory practitioner, the credibility to comment on competition with non-legal providers.  Well, in my industry, the competition betweeen lawyers and non-legal providers is even more rampant.  The Federal Energy Regulatory Commission, one of the major regulatory fora where I practice permits non-lawyers to represent clients in agency proceedings.  And many times, non-lawyer economists or consultants initially negotiate the terms of power supply contracts and tariffs and handle uncontested project permitting without ever bringing a lawyer in the door.  I’ve had to mold my practice in such a way that I can provide added value that my non-legal competitors can’t.  I did this partly by educating clients on the mess that can result by failing to use an attorney so as to adequately preserve one’s rights (e.g., to protest a contract or seek rehearing)  – and partly by offering services like appellate work or representation at hearings – that non-attorneys either can’t provide or are uncomfortable providing.  In short, if I’ve found ways to make my legal services vital in the energy regulatory field, surely my colleagues can do the same in the general practice area.

If you have any ideas on how to compete with non-legal document preparation providers or any success stories to share, we welcome your comments below – or cross posts at your web log.