Dramatic changes are afoot in the legal profession. Clients are searching for legal help online in record numbers. And as a result, the lawyer-client relationship is evolving—since lawyers can devote more time to frontal-lobe thinking and less to pushing papers. If lawyers seize the opportunity to make their work more efficient, this offers a tremendous opportunity to pass significant cost-savings onto clients.
Cost Prevents Businesses From Seeking Vital Legal Advice
Lawyers are necessary and vital advisors to small businesses, but expense—actual or perceived— can prevent businesses from seeking the counsel they need. Lawyers can guide businesses to avoid risks and mitigate the damage associated with inevitable legal issues—yet only 52% of small businesses sought advice from a lawyer in the last 12 months.
The median amount of legal costs incurred by a small business over the past year was approximately $4000-$5000, with 10% of businesses spending more than $25,000. And, the average lawyer in the U.S. earns more than $100,000 per year—with the highest average hourly billing rate topping off at a cool $755 in New York City. These numbers can be daunting to many small businesses, and as a result, they simply avoid interacting with lawyers until there is a crisis.
But things are changing.
Will Lawyers Be Replaced?
Due to budgetary constraints and access to “do it yourself” legal resources on the Internet, clients are becoming increasingly unwilling to pay high fees for inefficient work. Instead, clients expect more control over how legal services are delivered, thus altering the nature of the lawyer-client relationship.
The legal market is becoming more and more competitive, and with that, options to “do it yourself” have cropped up. Lawyers are “unbundling” their services, providing initial documents or guidance and letting the client handle the rest. Online services, most notably LegalZoom, are offering thousands of forms at bargain-basement prices. As a result, these fast and affordable technology-driven alternatives place pressure on traditional firms to provide more competitive pricing and better service with new technology.
Not only is there more price-pressure on the supply-side of the market, consumer demands are changing, too. The “connected generation” expects to purchase legal services and interact with lawyers the same way they purchase things or interact socially—online. Unprecedented access to the internet drastically increases the number of online consumers. According to Google, searches for legal information is one of its fastest growing segments and has increased by almost 200% in the last three years.
No Way: Lawyers Are Here to Stay
Lawyers are not going to be replaced anytime soon. A Consumer Reports study assessed how using LegalZoom, Nolo and Rocket Lawyer compares with hiring a lawyer and found that these services are generally better than drafting your own documents or not having them at all. But unless your needs are simple, none of the products are likely to meet all your needs, and in some cases, the documents aren’t specific enough or contain language that could lead to an “unintended result.”
So consumers will demand that lawyers adapt to this new reality--and for those lawyers who do, ample opportunity will abound. A recent survey of more than 2000 online users revealed that a majority of consumers expected good law firms to offer their services online in the next couple years. That poll revealed: (1) 47% of consumers would be more likely to choose a law firm that offered the convenience of online access to legal services and documents over one that had no online capability; (2) 56% of consumers said they expected good law firms to give customers the ability to use their services online in the next couple years; and (3) 43% of consumers agreed that they would change law firms if an alternative firm offered a reduce fee in return for the consumer providing initial details about their matter online.
Our prediction is that this is good news for lawyers and clients alike. Technology will make lawyers more efficient at finding and working with clients – which means significant cost-savings for clients. And lawyers will have more time for the vital counseling clients love—and can spend less time on expensive tedious tasks. It's a win-win.