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LegalZoom Faces New Challenge

February 23rd, 2010 by IP Warrior

A story recently came across my desk about a complaint filed in Missouri against LegalZoom, alleging that LegalZoom engages in the unauthorized practice of law and requesting class certification.  What caught my interest on this matter is not so much the facts of the case, but the context under which it has arisen.  (Read about it on LawVibe.com)

 

LegalZoom’s core model is very straightforward – select a form, and answer a questionnaire, which will drive the completion and delivery of said legal form to the user.  Gene Quinn, of IPWatchdog, describes the issue well in his review of the same case:

 

“The use of forms is not the practice of law, and to the extent there is any practicing of law here it would seem to me to be in the choice of form to be used.  I have always understood the LegalZoom process was dictated based on an attorney who created the form and then provided the created form to be used passively in defined circumstances.  I don’t see that as being the practice of law, although LegalZoom would certainly be better off if they did not have a real person doing the transcribing work.  Still, the work of a scribner has never been considered the practice of law.”

 

To be fair, the complainants allege that LegalZoom’s customer service staff are the ones who actually provide legal advice, a question of fact yet to be determined.

 

What I find most compelling, however, is how the case is framed.  According to LegalZoom’s petition for its removal to Federal court, they have served over 14,000 Missouri residents in a five-year period, generating over $5,000,000 in sales.  In various blogosphere commentaries of this case, most seem to focus on this fact, and as LawVibe themselves point out, the disruptive nature of this player in the legal industry.  And therein lies the rub!

 

I see most of this noise as yet more professional protectionism.  I understand it and where its motivation comes from – in the need to protect the profession and the status quo – but I’m troubled by it.  I also think that LegalZoom and other “disruptive players” have the momentum on their side.  In an industry challenged at its very core since the start of this Great Recession, all consumers – corporate and retail alike – are looking for alternatives to get fair and balanced legal services at reasonable costs.  There’s much more to the call for the “end of the billable hour” than merely a sound-bite.  Furthermore, LegalZoom provides a alternative venue for the provision of commodity legal services. We’re not talking about bet-the-company stuff here!  So is this really all just about sour grapes? 

 

LegalZoom represents new and innovative thought, an injection of new ideas to a stale business model.  My humble opinion is that this industry needs much more of that, and judging by the palpable discourse throughout the profession over the past few months, these disruptions are on their way en masse!

I’ve spent the last several years writing about the “next generation” of IP management systems. However, I find myself penning this post under the realization that in 2010 we have certainly made it through and past the “next generation” to something altogether more evolved. I find that we no longer need to convince people of the merits of workflow-based thin-client technologies that provide more holistic approaches to IP management (again, beyond docketing). But now we find ourselves asking what competencies are critical to master in an environment where we’ve overcome many technological hurdles. 
 

I think there are many key capabilities we should be looking for from our system providers. But, as I’ve pointed out many times before, IP technology, more than anything else, must be manifest of its processes. So, before we address specific technological feature-sets, let’s review the process paradigms that must ever drive them.
 
Four key competencies drive the IP Management system paradigm: Workflow, Automation, Collaboration, and Knowledge Management. Seeking these competencies often occurs in the order listed – pursue a strategy that mitigates daily process and information inefficiencies, while developing the structures for advanced information mining and cohesive portfolio management at the more strategic levels of the organization.
 
Workflow
  • Leverage staff – codify policies and procedures and let the system route, manage, and even audit business processes.
  • Apply workflows to prosecution processes (filings, actions, reviews, approvals, work product) and among firmwide systems (New Business Intake, Conflicts, Records, Billing).
  • Delegate – in a commoditized practice, leverage is crucial. Use workflow to delegate work and establish rules for the staff so that you can remove yourself from the process until necessary.
  • Paperless processes – Workflow-based systems automate and manage the routing of information throughout the enterprise. Create digital file wrappers associated with your docket matters and create efficient processes that reduce or eliminate your reliance on paper and manual processes.
 
Automation
Lawyers already keep the majority of the information needed for filings, transmittals and letters in the IPM system, so use it to automate the generation and timing of work product. Don’t re-invent the wheel with work product – establish boilerplates and template that both automate the work and mitigate risk. Automate these core competencies:
  • Document Assembly
  • Matter Modeling
  • Electronic Data Exchange
 
Collaboration
  • Codify institutional knowledge and share it with colleagues, clients, and partners. Provide access to critical, context-sensitive information and capture both the practitioner’s and client’s desktop
 
Knowledge Management
Knowledge management gives practitioners the power to:
  • Leverage critical information and act swiftly and measurably
  • Define, manage, control and analyze institutional knowledge
  • Capture every knowledge perspective – internal, clients, agents, PTO, governing bodies.
 
In the next installment of my series on the next Next Generation IP Management systems, I’ll review some specific technologies we hope to exploit to truly transform the way we work.