The E-Law Experience
Some, But Not All, Find Virtual Success Unbundling Legal Services on the Web
Posted Sep 24, 2006 4:39 AM CST
By Jason Krause
Richard Granat lives in Palm Beach Gardens, Fla., but keeps a family law practice going in Maryland. He does no face-to-face meetings with clients and the entire practice is managed through e-mail and phone calls. His only other staffer is a part-time paralegal. His practice is entirely virtual, existing only on his Web site at www.mdfamilylawyer.com.
Granat says his practice works because he sells only unbundled legal services. He only offers specific help--like legal advice or document preparation--rather than serving a client through an entire case.
In theory, the Web ought to be perfect for unbundled or limited scope representation. With unbundled services, clients and potential clients can log on to a Web site and download documents, enter information and obtain specific, limited services from lawyers.
At the height of the dot-com boom, online sites offering information, do-it-yourself legal forms and access to lawyers on the phone were a growth business.
A few, like Completecase.com and Legalzoom.com, still exist, but many more died. A few small firms, most in family law, have experimented with limited representation through the Web, but this is still a new trend.
A number of states have investigated ways to make unbundling easier, with several state bar associations redefining issues like the scope of representation, parameters for a lawyer’s communications and document preparation in limited representations, and entry and exit from such agreements. To facilitate this process, the ABA’s Ethics 2000 initiative changed two of the ABA Model Rules of Professional Conduct--1.2(c) and 6.5--making it easier for lawyers and clients to contract for limited consultations.
However, lawyers still have the same obligation they have in any other situation to investigate issues like frivolous filings. “Technology enhances efficiency,” says Will Hornsby, ABA staff counsel with the Division for Legal Services, “but that doesn’t mean you practice the law any differently.”
A virtual unbundled law firm will have lower operating costs than a traditional law firm because a client can input data online and have forms automatically generated by document assembly software. But since unbundled legal services are primarily aimed at people who are concerned about legal expenses, firms have to be able to accept lower revenues than they’d get for full service representation.
Limited representation will likely always make the most sense for clients with limited means or litigants who want to go pro se. These clients may not want or need an attorney to take them all the way through a case, but feel the need for a lawyer’s advice in specific areas. But these potential clients may rely on resources other than lawyers. And when they do seek an attorney’s help, these clients may prefer real-time, not virtual, contact.
The Rosen Law Firm, a family firm in Raleigh, N.C., invested in a Web site to offer forms and unbundled legal services starting at around $100. Firm founder Lee Rosen says that even though the site got what he considered good traffic, it only led to a few sales and revenue of several hundred dollars a week, which he says wasn’t worth the investment. The firm killed the site after about a year.
“I think people felt they needed to talk to a real person, that they needed more than just a form,” Rosen says. “In family law, I see people fight over everything from toaster ovens to the family business. People might like to do it simply and cheaply, but it’s hard to do when emotions are involved.”
But there’s no reason limited representation has to be only for less affluent clients. There is a wide range of potential clients who have no representation because they are unwilling or unable to pay for full representation, but don’t qualify for legal aid support.
“It’s hard for people to assess whether they would benefit from having a lawyer for just a portion of a case,” says Hornsby. “Not only that, but I think not everyone knows they have the option for limited representation.”
The question unbundled Internet lawyers need to answer is how much or how little service potential clients will accept. “I’m still struggling with that question in family law,” says Rosen. “People may say they want to work it out quick and easy, but you can only control one-half of a case. There will always be variations that complicate things.”
Granat considers his virtual law firm an ongoing experiment, but he believes there is a latent market for legal services that lawyers need to reach. He says that his revenues are increasing about 30 percent a year, and that if lawyers are willing to accept modest goals, unbundled legal service is a growth business.
Granat’s Internet site generates about $100,000 a year in revenue with an overhead of about $35,000, including online advertising, Web hosting and the salary for his part-time staffer. He also runs a legal forms service, but for a solo lawyer like himself, an unbundled law practice is a profitable business that allows him to live where he wants.
“I think when a lot of lawyers get out of law school, they have $100,000 in debt and they have a certain expectation of what they should be earning for an hourly rate--and they view unbundled work as beneath them,” he says. “But as clients begin to understand what this is about, it will keep growing as a business.”
Staying In Control
Los Angeles-based solo attorney Forrest Mosten has been promoting unbundled legal services for well over a decade now. His practice is mostly offline, though some clients come from the Net, even though he doesn’t advertise there. And by offering limited legal services, he says, his legal career won’t run his life.
“I know I am never going to go to court, and I know I can handle more clients yet keep more control over my life,” Mosten says. “There are no judges screaming at you about a deadline, and I know I won’t be stuck at the office when I don’t want to be.”
Limited law practices trying to work on the Web have to be able to generate high volumes of business at lower margins than a typical law practice. And lawyers who offer limited representation have to be prepared to compete with large, cutrate legal document Web sites like Wethepeopleusa.com and Legal Zoom, among others. That means advertising and educating people as to what such a practice is and what it can do for them.
But unbundled law isn’t necessarily a stand alone business. Granat thinks law firms that learn to integrate it into their practice will find it a good way to generate new business.
“A lot of times you’ll find that a client needs full representation,” he says. “We don’t offer that ourselves, but we will refer them to a lawyer who does. I have to think you should be able to combine limited and full representation into one business.”