Small Law Firms, Solo Practitioners, Technology

Online Matchmakers Help Small Biz Clients Find Lawyers -- But Do They Help Small Law Firms?

Small-firm columnist Carolyn Elefant questions whether new technological platforms cure the most significant problem that deters some lawyers from representing very small business clients.

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Today’s Wall Street Journal reports on the growing new crop of online matchmaking services designed to help small and mid-sized business clients connect with qualified and affordably priced lawyers.  The sites profiled include UpCounsel, which allows clients to bid projects, handles payments, and collects feedback (sort of like Elance for legal services); Priori Legal, which provides clients a list of pre-vetted attorneys with 5+ years of experience and negotiates discount rates; and IP SmartUp, which also charges discount rates for patent services.

From what I can tell, in the short term, these sites make money through various ethically permissible transaction fees (read: no referral fees, though some of the models tread dangerously close). My guess is that in the long run, these sites’ greater value will derive from big data gleaned from transactions that may shed insight on the factors that inform lawyer hiring (and in turn may hold value for lawyer marketing operations).

No doubt, from a small business perspective, these sites are golden. With their clean modern look and easy navigation, these platforms give prospective small business clients a far better user experience than any bar referral or local chamber of commerce site I’ve ever seen. Plus, many of the lawyers registered for the sites so far boast stellar credentials.  And the price is right — the WSJ piece shares the experience of one happy user who procured legal services at a price of between $100 and $600 per project (though the average cost of a transaction on UpCounsel is around $1000, the story notes).

Still, do these sites work for solos and smalls?

And no, that’s not protectionism talking — it’s a valid question that potential investors in these businesses are or should be asking as well.  After all, at the end of the day, it’s solo and small-firm labor that acts as the power behind these sites; without qualified sellers who can provide a better product than a DIY form, most of the sites won’t be able to attract buyers of legal services. Biglaw firms have no reason to hawk discounted wares on matchmaking platforms — many are already giving away small business advice free through self-sponsored start-up business portals or incubator projects in an effort to get in on the ground floor of a promising startup. So unless solos and smalls register to play, the business model won’t work.

To their credit, many of these matchmaker sites are doing everything right thus far in their efforts to attract solos and smalls. The attorney profiles offered at both UpCounsel and Priori are attractive and tasteful, without any of the smarmy ambulance-chasing CALL US NOW buttons splayed across so many lead-gen (and sadly, attorney) websites.  Moreover, both sites offer services such as a virtual profile and payment collection (UpCounsel) or assistance in putting together service packages (Priori) that reduce the transaction costs of the arrangement.  In addition, just as the sites sell themselves to businesses as a way to “find lawyers,” they promote the value of “being found” to as a benefit to lawyers — though from my perspective, being found along with one hundred other of your competitors isn’t any better than having to duke it out for a first-page rank on Google.

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Still, at the end of the day, I’m not sure that the matchmaking platforms cure the most significant problem that deters some lawyers from representing very small business clients, which is the one-off nature of the work. Here’s what I mean. Many times, if a client comes to me with a small filing that needs review or a question that might take 20 minutes to address because I already know the answer, it’s almost not worth the few hundred dollars (if that much) to open a file, generate a representation agreement, prepare the response and send the invoice.  It’s almost easier to do the work free or simply have the client return if or when the problem hasn’t resolved. And this is with a fairly automated practice where I have forms, templates and online billing.

My experience isn’t unique; the same is true for many other small-business lawyers. Collecting $300 to review a contract that the client prepared from a form and then facing exposure for liability if something goes wrong often isn’t worth the transaction costs.  And I’m not so sure that any of these matchmaker platforms really change the equation unless they can generate enough of a volume of small matters that it will make a significant difference in a lawyer’s bottom line (although if there’s really a $100 billion market, as UpCounsel’s market research shows, that may happen). If not, the platform may make sense for newer lawyers trying to gain a foothold (and indeed, back when I started out, I gratefully took every $100 consult that came my way) or lawyers staying home with family looking to earn a little cash on the side — but not for more experienced practitioners.

Of course, there’s also the argument that the platforms give clients a chance to “test drive” lawyers on smaller projects — and to hire them for larger matters if they like what they see.  But I’m not so sure it works that way. Once accustomed to discount rates, many clients have a hard time paying significantly more.

So what’s the bottom line on matchmaking sites?  Though I may seem skeptical, I’m also from the school of #TAO (try anything once). Early on, it can’t hurt to register for these sites and see what they have to offer — but at the same time, ask hard questions.  For example:

  • Can you remove your profile from the site? 
  • If you do business on the platform with clients, what kinds of confidentiality rules are in place? 
  • What kinds of due diligence and regulatory clearances have the sites conducted with respect to ethics compliance, and can you have a copy of the opinions? (Remember, if some nut decides to bring an ethics complaint against one of these sites, participating lawyers can also wind up on the hook.)
  • Can a client elect to do business with a lawyer “off-platform?”

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Ultimately, as I’ve written before, my best advice comes from my dating days, when college suite-mates and I always carried a $20 bill in our pocket or shoe to hail a cab and beat a hasty retreat in the event that some creepy date’s offer of “my place” turned out to be the only place. Same holds true for the next generation of dating platforms for lawyers and clients: even if you decide to camp out on someone else’s platform, it’s always a good idea to maintain a place that you call your own — a website, a portal, a blog or social media account — as a Plan B.

Carolyn Elefant has been blogging about solo and small firm practice at MyShingle.com since 2002 and operated her firm, the Law Offices of Carolyn Elefant PLLC, even longer than that. She’s also authored a bunch of books on topics like starting a law practice, social media, and 21st century lawyer representation agreements (affiliate links). If you’re really that interested in learning more about Carolyn, just Google her. The Internet never lies, right? You can contact Carolyn by email at elefant@myshingle.com or follow her on Twitter at @carolynelefant.

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