Perhaps Aaron George’s post on the Lexicata blog entitled Why the Law Firm Business Model Is All Wrong didn’t generate enough of a stir when it was posted six months ago, so George’s co-founder Michael Chasin saw fit to resurrect it in a recent blurb that showed up in my LinkedIn feed. George argues that technological improvements in document automation have rendered the law firm business model and its heavy reliance on the billable hour obsolete. As George explains:
The reason the shift toward standardization and process automation is so disruptive to the current law firm business model is that it makes legal services more like a commodity, and less like a service. When you purchase a commodity, you tend to be far more sensitive to price. This trend has only just begun, but it’s shaping up to be one of the most important attributes of the legal industry of the future. Law firms must adapt their business model to one that is based on value and scalability, as opposed to time.
Although George couches his observations in start-up jargon like “disruption” and “scaleability,” truth is, there’s an age-old law firm business model that adopts the same practices George endorses. It’s called a volume practice or mill – and we’ve seen how well that worked in the foreclosure industry.
Fortunately, George’s view of a business model for the future of law isn’t something as pedestrian as as processing forms ala Legal Zoom. After all, why get your hands dirty? Instead George sets his sights higher, envisioning the law firm as a “platform” like Uber which is:
focused on “maintaining its app and providing the logistical layer to efficiently connect drivers and passengers and process payments. It doesn’t provide the actual transportation from A to B or have to deal with any of the burdens from managing a fleet of vehicles.
Imagine a law firm that was built on a similar model. It would look something like LegalZoom with its efficient data collection and automated document prep, combined with Avvo’s attorney profiles, legal content, and Q&A platform. Clients could access the content and services themselves with minimal intervention from attorneys. But the key differentiator would be that a law firm could step in to provide actual, substantive legal advice to clients, unlike LegalZoom and Avvo.
Although George wonders whether today’s law firms have the tech savvy to create a business model with a platform approach, I wonder whether that’s something that clients actually want. Don’t get me wrong – I’m an enormous fan of Uber, and like George, I agree that lawyers can learn much from the Uber model . But just like Dan Quayle was no Jack Kennedy, law firms are not Uber, no matter how much we try to force the analogy.
Customers love Uber because it makes life easier. While Uber is often – though not always – cheaper than an ordinary cab, it’s hands down more convenient and pleasant. I can hail an Uber with a click of a button and wait in the comfort of my home, instead of having to hop up and down on the sidewalk for as much as 15 minutes, trying to hail a cab, and at the end of my ride, I can hop out without having to fumble with taking out cash and saving the receipt. Plus, if I’m Ubering on business, I can get work done en route – either fielding phone calls or reviewing files – which I couldn’t otherwise accomplish if driving or taking metro.
But I’m not sure how a law firm platform makes life easier for me as Uber does. Under George’s vision of the law firm platform, I’d be doing most of the work myself – “accessing content and services with minimal intervention.” But that’s not what I want when I hire a service provider – I want them to do the work for me. If I have to prepare a will or trust, I don’t want to fill out the forms myself; instead, I want to dump it all on the service provider’s desk and have it completed for me. I want the provider to advise me on what type of planning I need, and not to just process a form that I’ve completed. Likewise, if I find a lawyer who I’m happy with, I want to be able to stick with them and use them again and again, and have the ability to contact them directly instead of having to go through a platform as I do with Uber. And I also want to know that if push comes to shove, that my lawyer’s loyalty is to me, not the platform.
While it’s easy to claim that lawyers are too backwards or stodgy to embrace legal platforms, the truth is that not every type of job can be Uberized. Handy, an “Uber” for household chores has struggled to attract and retain quality workers, while, Homejoy, Uber for housekeeping also failed for similar reasons. There’s also a second explanation: whereas most people use Uber several times a month, by contrast, the same recurring demand doesn’t exist for a platform to find a housekeeper (since once a customer finds someone they like, they’ll use them regularly, thus obviating the need for the platform). The same may be true for legal services – the level of recurring doesn’t exist because people don’t use lawyers as frequently, plus when they find one they like, they prefer to go return instead of going back to the trough.
Insisting that legal services are the same thing as taxi rides doesn’t make it so. Re-branding the sketchy volume mill practice with sexy startup lingo like scaleability doesn’t make the idea any less harmful to clients. If we’re going to change the practice of law for the better, we have a real conversation about the role of lawyers and the needs of clients that consists of more than soundbites.