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Are platforms coming to legal?

Much has been written recently about “platforms” and their impact on the legal industry. And by platforms I’m referring to the digital business model rather than the shoes (sadly). Avvo, Rocket Lawyer, and LegalZoom are touted as the next platforms for legal, and I want to delve into this proposition a little.

So what is platform technology? The best definition I’ve found is in the Deloitte Business Trends Report on “Business Ecosystems” from 2015: “platforms are layers of infrastructure that impose standards on a system in which many separate entities can operate for their own gains.”

Good examples of these kinds of true platforms in our everyday lives would be: Uber, AirBnB, and eBay. Taking the first of these through the definition:

1.    Layers of infrastructure

    Uber provides a well-marketed app with sophisticated GPS functionality for all of its driver “contractors.” The layers of infrastructure on which the app is built help scale both the participation and the growing marketplace for new ventures (such as UberEATS).

2.     Impose standards

    The terms of service that Uber imposes — e.g., UberX, UberHop, UberBlack, Taxi, etc. — each have a pre-defined set of standards about the level of service provided and expected by users when using the brand.

3. Separate entities that operate for their own gains

    This is the final ingredient for a platform — they ultimately create a marketplace — a marketplace within an umbrella brand that different players join and operate in together to create value and make money.

These companies own the “interface layer,” the all-important place where the virtual relationship exists. But they haven’t stopped there; they’ve created the layers of technology infrastructure to create scalable and agile solutions that can respond to the “rapid and unexpected shifts in demand.” They become an ecosystem for an industry to facilitate participation and collaboration, and they ultimately create value for the users of that platform.

In fact, the best value created by platforms is trust. The social aspect of the Internet creates a level of trust through reputational features, user ratings, or reviews. Who would have believed that we would get to the stage of trusting a technology platform enough to book a taxi with a driver who has no formal credentials and is driving his own car? Or book the third room in some stranger’s house in another country on a smartphone?

This is all very interesting, but how does any of this apply to legal, if at all?

At the consumer/retail end of the industry, Avvo, Rocket Lawyer, and LegalZoom have all created platform business models. They have solved the chicken-and-egg problem of getting both lawyers and consumers on board to create a viable marketplace. For consumers, they’ve done this by seeding their own forms and documents, and allowing them to choose the specific legal help they need using simple, fixed prices. Solo or small firm lawyers benefit from the reasonably priced way of getting their bio in front of more eyeballs than they could possibly reach by themselves.

All three platforms operate in the same consumer, retail, and small business areas. The precedents, documents, and simple/fast legal help they provide are all examples of the “rote” and “robotic” type of work at the bottom end of the Robot Curve outlined in my last column. They have fully productized a set of legal services — simple consumer/employee legal problems, small business formations, wills, etc. — to deliver in a commoditized market. According to Clayton Christensen’s theory of disruptive innovations, this entry into the low end of the market is where all newcomers start as they work their way from the bottom to the top, eventually pushing the incumbents, at the rarefied end of the market, aside.

We are starting to see evidence of innovation at larger law firms that share some of the features of the new platform businesses by delivering a suite of online services or “knowledge products.” Ron Friedmann’s recent Prism Legal review of Cadwalader Cabinet is an example. It is an online legal service covering financial regulations created by Cadwalader Wickersham & Taft LLP.

Some of these online services operate down at the commoditized end of the Robot Curve, with individual firms competing with Rocket Lawyer or Avvo to offer forms, documents, and restricted legal advice to small-to-medium enterprises and startups. But some being designed, developed, and delivered by law firms are amazingly creative and innovative. They often target a niche audience, like Goodwin Proctor’s Founder’s Workbench, or provide very niche knowledge and information in heavily technical areas of law, such as Allen & Overy LLP’s

Legal technology providers are also starting to experiment with the platform model as they integrate tools and solutions into the workflows of a deal or case. It will be fascinating to see whether technology platforms like HighQ or the currently closed platforms of Thomson Reuters will nudge law firms to create more platform-like experiences for their clients.

So, will we ever see the so-called Uberization effect? Might platforms be the only way we’ll deliver legal services in the future?

I think it’s much too early to predict. But it is clear that there are legal innovators creating new types of value for both clients and lawyers, which, if they prove successful, will surely be copied and lead to a wider shift towards platform business models.

First, we need to see whether clients of legal really value the social features of customer rankings, ratings, and reviews. I can’t see why these wouldn’t help individuals or small business clients looking for simple answers. Even in a regulated profession, visiting a single web page and brand that funnels me in the right direction to a good lawyer is better than sifting through pages of Google search results looking for recommended local lawyers.

It isn’t clear that this will be borne out for larger clients or more complex cases though. Confidentiality, conflicts, and privacy issues will hinder sharing information publicly, as will the more complex personal relationship and networking dynamics of larger clients and firms.  

Second, it will be interesting to watch how successful the new knowledge products and online legal services become. For clients, the value is in making it easier to understand, find, and buy legal services — whether through more standardized services with predictable and low-cost pricing or through more niche offerings that can be productized by focusing on highly targeted market needs.

But our legal needs don’t always slot nicely into prefab boxes. The complex layers of legal obligations and duties can be lost when turned into the black or white or the zeros and ones of computer code. Unique legal problems often need unique solutions designed by leading experts that welcome the grey, the unique, and the complex.

And, finally, on the lawyer side, the value of these platforms will be in having greater access to clients. Avvo creates a better digital storefront than a lot of small and medium law firms can through their own web sites. If more clients start shopping around for lawyers, then the reasons for not joining such a platform may disappear. And, as we’ve seen with Uber, many people may not like the new models, but if there are enough competitors willing to go along with it, critics may not have much to say in the matter.

While none of these value propositions necessarily need to be part of a platform to be successful, the more value that is created and enjoyed in each will certainly point to a more platform-based future for legal.

Kate Simpson is national director of knowledge management at Bennett Jones LLP, and is responsible for developing the firm’s KM strategy and initiatives. The opinions expressed in this article are her own.