Disruptive Innovation: Lawyers Must Pay Attention

During the recent American Bar Association meeting in Chicago, the National Conference of Bar Presidents presented a panel discussion on the popular subject of Disruptive Innovation. The panel of experts included senior officers of two of the leading online legal providers, Legal Zoom and Avvo. The discussion was eye opening.

To date, more than a million corporations have been incorporated using forms from Legal Zoom. In addition to forms, Legal Zoom now has a network of lawyers who can be called for a flat fee for subject matter or procedural advice on a wide array of issues.

Avvo now has 75,000 legal questions and answers arranged by subject matter for consumers to access free of charge. Avvo’s database has bio pages for tens of thousands of lawyers. Chances are that the majority of readers of this article have an existing bio that they have never seen and didn’t know existed. Avvo lawyer ratings are rapidly overtaking other lawyer rating services for popularity. If you have not checked your Avvo bio and studied your Avvo rating, you should…consumers are seeing it every day. Avvo also provides forms and packages for consumers to represent themselves. Avvo and Legal Zoom forms for divorces and wills are hugely popular.

The leaders of Legal Zoom and Avvo told us that their mission is to make access to justice possible for as many people as possible. They concede that they do not want the top one percent of the legal market, nor do they want the bottom fifteen percent of the hopelessly poor. However, they view the roughly eighty-five percent in between as fair game. Indeed, they cited a recent report by LawMediaLabs, Inc., that estimates that there is an untapped “latent legal market” worth annual fees of $45 billion. This “latent” market consists of the legions of middle-class consumers who do not consume legal services because they believe they cannot afford them or they want to represent themselves.

According to Wikipedia, the term “disruptive innovation” has been loosely defined as “an innovation that helps create a new market and value network, and eventually disrupts an existing market and value network (over a few years or decades), displacing an earlier technology.” What it really represents to all of us is the change in our profession that is coming at us as fast as a tsunami. As big as Legal Zoom and Avvo seem, they are merely the tip of the iceberg. Virtually every task we lawyers undertake is being studied by an innovator, and we can expect competition and change in about every practice area.

I would like to tell you that there is no cause for alarm, but to lawyers who handle consumer transactions, family matters, wills, bankruptcies and other staples of solo and small practice firms, the innovations in technology and online offerings are a serious threat.

Everyone who will potentially be impacted by new innovations must study the competition and be prepared to adapt their practice so that competition with the innovators will be possible. Many of you will have to put more information online about your services and how you will charge. Cafeteria menus of services with hourly or flat-fee pricing may need to be posted. All bar associations, including the IndyBar, will have to provide forums for discussion, seminars, and training so that our members can remain viable. This is not something we can put off until tomorrow. The changes are happening today.

We can take some solace in the fact that the proper practice of much law requires educated and informed judgment. Consumers will still need to consult lawyers to help them make choices in many instances. Some consumers will make uninformed choices online and will need lawyers to correct their errors.

However, as the consumer population gets younger, we can expect younger consumers to place trust in the Internet. Innovative Disruption is real and all lawyers must pay attention.•

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