Wednesday, August 17, 2011

Google Backing Of DIY Legal Forms Will Force Lawyers To Lower Fees

Google captured the headlines this week with its purchase of Motorola Mobility. But this big deal has overshadowed a smaller one last week that will drastically transform the way we consume legal services. And in the long run it may have an even more profound impact.
As Forbes senior editor Daniel Fisher reported here, Google Ventures is part of the group that invested $18.5 million in Rocket Lawyer, one of a growing number of web-based services that can spew out documents like wills, leases and incorporation papers for a fraction of what many lawyers charge. In a separate deal, its competitor, LegalZoom, raised $66 million of venture capital last month from Kleiner Perkins and Institutional Venture Partners, among others.
While venture capitalists see gold in the do-it-yourself legal movement, the latest developments make me cringe. I’m all for educating consumers about legal issues – I’ve spent most of my career doing just that, most recently in my book, Estate Planning Smarts. But having also worked as a lawyer, I know how complicated writing documents can be. In fact, I make a hobby of collecting horror stories about consumers who get in trouble by acting as their own lawyers. You’ll find some doozies in my Forbes story, “The Case Against Do-It-Yourself Wills.”
In a pinch, both LegalZoom and Rocket Lawyer can help people connect with a live lawyer, but I have several objections to this arrangement. One involves the quality of the advice people are likely to get. At Rocket Lawyer, it costs $19.95 a month. That’s far less than I recently paid my plumber to install a new flushometer in the toilet.
In addition, the premise of both companies is that consumers will use the online documents to avoid lawyers altogether – that’s what attracts them to LegalZoom or Rocket Lawyer in the first place. So they can’t be counted on to ask for help, even when they need it. Spotting potential trouble spots is one of the things lawyers do. Chances are laymen will be dangerously ignorant of what they don’t know.
Consumers can profit from the latest developments, but not in ways that Rocket Lawyer, LegalZoom or the venture capitalists contemplate. Here’s how: they can use the widespread availability of DIY documents as a tool for negotiating reasonable legal fees. The same technology that has spurred the DIY movement has made it much easier for lawyers to do their jobs. Whether lawyers use their own forms or a commercial product, in many cases it is possible to prepare documents in minutes. They have no right charging for them as if they were being custom crafted and written with a quill pen.
Sourced from Forbes