I’m in Memphis today to kick off the Tennessee Association of Justice Annual Convention, speaking on the6 Proven Keys to Marketing Your Law Firm Online. This law firm marketing topic is more relevant than ever, especially for small firms and solos.
Why now, you ask?
Because a couple of weeks ago, LegalZoom filed for an IPO to raise $120 million to expand its online legal services in the U.S. and abroad. Small firms and solo practitioners need to look in the mirror for the target on their backs, because this is exactly who LegalZoom is targeting with their low-cost online offerings.
The IPO filing revealed some interesting data about LegalZoom:
- Last year, they served almost a half million customers through their website;
- Over the past decade, LegalZoom has served more than 2 million customers;
- 20 percent of all LLCs set up in 2011 in California did it on LegalZoom;
- LegalZoom made a profit last year for the first time -- $12.1 million in net income off sales of $156 million.
As Richard Granat noted so succinctly on his eLawyering Blog:
Many lawyers are in denial about the desire of consumers and small business to purchase their services. They will assert that consumers and small business are exposing themselves to liability by using LegalZoom's limited services, which will bring regret later. But consumers don't seem to care. What they get from LegalZoom is "good enough." The numbers tell the story.
Solos and small law firms will find that it will be very difficult to compete against LegalZoom with its superior capital resources. The organized bar (State and ABA) has given up on trying to put LegalZoom out of business on the theory that the company is violating UPL ('unauthorized practice of law") rules. Any organized bar attacks will be resisted by LegalZoom, which will now have the capital to fight any challenges to its business model. The American Bar Association has created a Solo and Small Law Firm Resource Center, but it is too little and too late.
LegalZoom is here to stay and will expand its market share as the major provider of the delivery of legal solutions to consumers and small business. LegalZoom will, inevitably, put many solos and small law firms out of business as it grows and expands its suite of services.
There are strategies small firms and solos can deploy to fight this trend; I’ll comment on those in the next day or two.© The Rainmaker Institute, All Rights Reserved