Suntrust’s New Online Legal Portal Shows There’s Nothing New Under the Sun

Stephanie Kimbro writes about the  launch of a new business hubm integrated into the services offered by SunTrust, that includes businesses services like web development and legal-lite document preparation (meaning simple leases, website privacy policies and a bunch of other simple business agreements) all in one place.  I agree that it’s an interesting concept – but is this, as Steph suggests, a “sign that the future is starting to get here?” Or are we simply re-introducing models from the past?

Because once upon a time back in the 1950s, banks routinely handled estate planning, as  documented by Jerome Carlin, author of Lawyers on their Own, which is a portrait of solos in Chicago in the middle of the century. As I posted here, Carlin described that banks relied on lawyers to serve as referral sources.  From Carlin:

If you’re just out of law school you go to the trust company and you tell them your client wants them as executor, they will draft the will for you, spend days with you, they’ll even type it for you…

Banks would also tell clients that they didn’t need lawyers:

Several [lawyers] mentioned that they had working arrangements with local banks with the understanding being that the bank would refer clients to them on will and probate matters in return for which the lawyer would send the bank business…banks were also singled out [by solos surveyed] as their most serious non-lawyer competitors. A large number complained that banks draw up wills for nothing and..in addition, advise people against seeking legal counsel.

Should today’s lawyers worry? Many of the small solos in Carlin’s book feared that competition from well-endowed banks would crush them and urged the bars to intercede and stop banks from engaging in unauthorized practice of law. That may have seemed like a good idea at the time, but regulation is rarely the solution to competition.  Regulation may have stemmed the tide against non-lawyer providers but fifty years later, we’re right back where we started.

Of course, not all solos and smalls were hurt by competition back in the 1950s. Rather, it was largely the one-trick solos, who could only draft simple wills no doubt suffered — as will today’s solos who put their eggs in a strictly unbundled legal services business model basket. As I’ve been writing for years now, low-end, forms-based services can generate revenue in theory – but only through volume. Otherwise, low-end work like eyeballing a will or drafting an LLC is fast becoming, as it was back in Carlin’s day, a loss-leader to lure bigger matters through the door.

Technology may make it easier to fill in a form or will, but it doesn’t make the work any more valuable to clients. That’s why banks can give it away for free, and that’s why the focus on unbundled services as a business model is a road to nowhere. The only way to compete with banks is to work hard to move up the food chain; to improve your skills and service to capture the better clients. For example, there’s a whole lot of clients orphaned by many large firms’ decisions to shutter their estate planning practices. Those are the kinds of clients who won’t be checking in at a bank to have their wills prepared or business succession plans developed.Those are the clients solos and smalls need to target.

But really, this post isn’t intended to focus on business models or making money. Rather, I only wanted to point out that really, there’s not much suspense here. We don’t need to be clairvoyant to see where this bank trend is heading or the impact on solos and smalls. Instead, we can turn the pages back 50 years, see what happened then and do our best to prevent solos and smalls from falling into the same trap moving forward. Because without sustainable solos and smalls, access to justice will also become an empty catch phrase rather than a reality and a responsibility of lawyers.

Summer Sun image courtesy of Shutterstock.