Around the Blawgosphere: Bloggers Weigh in on LegalZoom IPO Filing; Vote for Best Law Firm Website
The Other Big IPO
Today, Facebook makes its historic market debut. But many lawyer-bloggers are talking about a different initial public offering: Last Friday, Web-based legal services provider LegalZoom filed for an IPO of up to $120 million to expand its services in the United States and around the world.
Can LegalZoom documents truly compete on quality with a lawyer-for-hire? The answer to that question doesn’t matter as much as what clients perceive.
Lawyers “will assert that consumers and small business are exposing themselves to liability by using LegalZoom’s limited services which will bring regret later,” DirectLaw Inc. founder Richard Granat wrote at eLawyering Blog. “But consumers don’t seem to care. What they get from LegalZoom is ‘good enough.’ The numbers tell the story.”
And the numbers, Granat writes, citing LegalZoom’s S-1 filing, state that In 2011, 490,000 orders were placed through their website and revenue was $156 million. “Any organized bar attacks will be resisted by LegalZoom, which will now have the capital to fight any challenges to its business model.”
Nova Southeastern University School of Law professor James B. Levy noted something else of interest from the IPO materials: “Going forward, LegalZoom does indeed plan to offer legal advice through a network of affiliated lawyers it will create,” he wrote at Legal Skills Prof Blog. “No doubt lawyers in the network will have to work for cut-rate prices, and those who don’t join will be under tremendous pressure to match LegalZoom’s prices. None of this will have an impact on clients with complex legal problems that require a more sophisticated approach, representation in criminal matters and other trial work. But if your current practice depends at least in part on helping clients with any of the routine legal matters where LegalZoom plans to compete, LegalZoom is going to eat your lunch. Like it or not, ‘the Wal-Mart effect’ is coming to the legal services industry.”
But New York City solo Scott Greenfield thinks that, albeit indirectly, LegalZoom and other systemic pressures do have an effect on the criminal justice bar.
“Do the math. Law schools continue to crank out tens of thousands of newly minted, deeply indebted, lawyers every year with no place to go,” Greenfield writes at Simple Justice. “To the extent that they have any hope of practicing law, the kids who dreamed of one day being an M&A lawyer at Skadden and buying that Ferrari is now standing in the hallway of 100 Centre Street hustling misdemeanors at $100 a pop. He has no choice, if he wants to eat again tonight.”
Greenfield also admits with regret that he can see the perspective of the LegalZoom consumer. “Whether it’s corporations or mom & pops, they are prepared to trade off bespoke legal services for potentially crappy but substantially less expensive, and take their risks. They’ve come to realize that the ‘bespoke’ legal services aren’t all that great, because most lawyers aspire to mediocrity, caring only that the check cleared, and because even if a client tries to do everything as well as possible, the legal system (I mean you, judges) are considered so unreliable that there’s no faith that the righteous will prevail. So if expensive legal services are a crapshoot, and inexpensive legal services are a crapshoot, why pay more?”
Vote on the Best Law Firm Websites
After its call for nominees in March, Lawyerist has announced that it’s time for readers to vote in its Best Law Firm Website of 2012 contest. Law firm marketing and Web design consultant Karin Conroy writes that she and Lawyerist editor-in-chief Sam Glover together decided on their 11 favorites. You can find links to and quick assessments of the nominees at Lawyerist, and you can then go to this page to vote before the polls close at noon on May 31. When we last checked, London, Ontario-based Harrison Pensa’s website had a slight lead.
Updated May 30 to update law firm websites voting results and to correct typographical errors.