My teenage children don’t know a world without the internet; a place where the sum of all human wisdom is a few clicks away.
Or where it’s really easy to research and buy the latest videogame.
Aside from the democratization of information and sharing enabled by the internet, the biggest impact of the web in most people’s lives is how it has transformed the consumer experience. It has done so in two important ways: by creating unprecedented levels of transparency and removing friction from the purchase process. In nearly every industry, a wealth of information is available to consumers prior to making a purchase: what the options are, differences between products, user feedback, and price transparency. With full information about products, including price, the internet makes comparison shopping easy.
And with all of that information, purchasing is smoothed out as well. Web services continue to refine the art of removing friction from the purchase process. Amazon aggressively knocked down reasons to purchasing goods in brick-and-mortar stores. Uber removed the transactional choke points from cab rides. iTunes made it easy to buy music on an a la carte basis. Much of the consumer internet continues to iterate and expand on the winning concept of blending ever-higher levels of information with ever-smoother transaction processing.
This online purchasing revolution has also reached beyond everyday consumer goods and services. Buying insurance, trading stocks, even government licensing – all have been streamlined online.
But there’s one notable area that has remained largely impervious: legal services. Despite some increases in transparency on lawyer backgrounds (Avvo) and do-it-yourself online legal forms (LegalZoom), the legal marketplace has seen nothing approaching the change in consumer empowerment and ease of transacting experienced in virtually all other industries.
It’s not as if legal services is a tiny economic niche. The market for legal services in the U.S. is worth over $250 billion per year, and nearly 40% of that is made up of consumer legal spending. Rather, a mixture of byzantine regulation, barriers to market entry, and restrictions on common forms of marketing have kept consumers from experiencing the same form of experimentation and innovation that has transformed the delivery of so many other goods and services:
- Until the late 1970’s, lawyers in the U.S. could not advertise in any meaningful way, and many states still have laws on the books prohibiting lawyers from using common advertising techniques.
- Non-lawyers cannot own even a minority interest law firms, preventing outside investment in the industry and removing the ability to offer equity compensation to talented non-lawyer leaders.
- Except in limited circumstances, attorneys are prevented from participating in services that attempt to match clients with lawyers based on specific legal circumstances.
- Rules based on the geographic location of an attorney prevent many forms of remote counseling, even when the matter in question is not dependent on a given state’s law.
- Legal obligations in most states make it difficult for attorneys to offer limited-scope services that attempt to counsel or coach consumers through specific legal issues rather than engage in full-blown client advocacy.
Some of these restrictions are rooted in a learned profession’s reliance on tradition and resistance to rapid change, and much of it stems from a desire to protect clients and ensure the quality of legal work. But a consequence of the locked-down nature of the industry is that many consumers who would otherwise use legal services do not avail themselves of them.
It’s not hard to see why. There’s no way to shop for a lawyer-reviewed estate plan the way you would for a pair of shoes or a flight to Mexico. And beyond price transparency, attorneys and law firm have shown little interest in marketing fixed-price, entry-level offerings that work fine for a large percentage of consumers. Instead of leading with such offers and then upselling to those needing more involved help, the vast majority of lawyers treat every client as being in need of a custom solution.
It’s a shame for both consumers and lawyers. Many consumers who choose to do without a lawyer’s help are no doubt getting suboptimal outcomes in their legal matters. And lawyers, by failing to deliver the transparency and ease of transacting that consumers have become used to, are missing out on a massive, underserved market.
– Josh King is vice president and general counsel of Avvo.com, the web’s largest legal Q&A platform, directory and marketplace.
