Attorneys on Amazon? Online Marketplaces for Legal Services
For an individual with a legal need, shopping intelligently for a law firm can be a frustrating experience. It is difficult to get any objective information about price or quality, and comparison-shopping is arduous. Are online marketplaces, which play an increasingly central role in the consumer economy, part of the solution to this access to justice problem?
The Canadian Bar Association thinks so. The CBA’s Futures Report called for a “full-blown technology-enabled marketplace where sellers of legal services can present their offerings, credentials and fee structures.” In such a marketplace, consumers would be able to “choose the types of services they wish to purchase,” and “investigate a seller’s quality and reputation.” Online legal services marketplaces may be most appealing for individuals and small businesses, which usually lack internal legal expertise and long-standing relationships with firms.
This vision — an eBay for consumer law firms — could have significant appeal both for clients and for legal practitioners. Online marketplaces can connect firms and clients who would otherwise never find each other. Today, many people with legal needs and some capacity to pay for legal services, nevertheless go without legal services. This is often because they cannot find a firm that is offering the service package the consumer wants and that is willing to accept the individual as a client. After interviewing hundreds of self-represented litigants (SRLs), Windsor Law’s Prof. Julie Macfarlane reported that
A significant number of SRL’s describe ‘shopping around’ for a lawyer but with no success. Some SRL’s complained that while they were willing to pay for legal services, they could not find a lawyer willing and competent to take their case on. These respondents described placing numerous phone calls to lawyer’s offices – sometimes as many as 15 or 20 …
An online marketplace can connect more paying clients with firms, to their mutual benefit.
Online marketplaces are especially useful in facilitating long-distance retainers, between clients and firms that are geographically far apart. Long-distance retainers are increasingly feasible thanks to technological improvements and relaxation of interjurisdictional practice rules. Online marketplaces can help lawyers target practices at sub-niches (e.g. Islamic family law or employment law for athletes), drawing clients from around the province or even around the world.
A sufficiently robust online marketplace could reduce law firms’ reliance on paid advertising and referral fees to connect to clients. These traditional “offline” methods are not only expensive for law firms, but also problematic for access to justice and legal professionalism. At best, they provide clients with little or no useful information about alternative firms.
Online comparison shopping is much easier for prospective clients than visiting multiple law firms and trying to distinguish between them. Comparison shopping also fosters competition, which helps consumers in the long run. Increased competition may sound like bad news for lawyers. Indeed, for firms whose services are effectively commodities – e.g. simple wills or residential property conveyances – online marketplaces could heighten price competition and squeeze profits.
However, most law firms’ offerings are differentiated in some way. Family law firms, for example, don’t just sell divorces “off the rack.” They make very different claims about their approach to files, the experience and attributes of their lawyers, etc. Research suggests that, for differentiated offerings, a move to online marketplaces can actually make consumers less sensitive to price, and more attentive to quality differences. This is apparently because good online marketplaces make it easier for consumers to get information about quality.
Steps toward Online Marketplaces : Public and Private
How close are we to the CBA’s vision of a “full-blown technology enabled marketplace” for personal legal services? Steps have been taken in this direction both by legal services regulators and by private sector entrepreneurs.
Public sector efforts to connect consumers with firms online have come in two varieties. Directories are name-based: they let users look up practitioners, and see contact information, license status, and (sometimes) disciplinary history and practice areas. Many of these are now specialized—the National Directory of Professionals Assisting SRLs, operated by Windsor Law’s National Self-Represented Litigants Project, is a great example. Referral sites, by contrast, are need-based: a user answers questions about his or her legal need and a list of practitioners in the appropriate area is generated.
Private sector entrepreneurs have also responded to consumer desire to shop intelligently online for legal services. Private sector sites generally obtain advertising revenue from law firms and list contact information. Some serve as intermediaries between client and firm. The American site Avvo, for example, sells fixed-fee service packages delivered by lawyers under contract with Avvo. Private sector sites offer both name-based directories and need-based referral pathways. Others specialize based on legal niche (e.g. family law) or client demand (e.g. for fixed pricing).
The Distance Left to Travel
Despite these steps, online marketplaces for legal services still face significant challenges. Providing reliable quality information is one challenge. Marketplaces like eBay and TripAdvisor succeed because users trust the information they provide about the quality of different options. No online marketplace for legal services has yet managed this feat, although Avvo probably comes closest. Personal legal services are credence goods. Ratings from prior inexperienced consumers would be of limited value in evaluating quality, even if users could trust that those ratings are not being manipulated by the firms or the online marketplace itself.
Users of online marketplaces also expect to find clear price information. Flatlaw delivers, but most legal services for contested matters in this country are still billed by time or on a contingency basis. Even if firms could be convinced to disclose their hourly or contingent rates, this information still wouldn’t tell the consumer what the final price will be.
In other sectors of the economy, the most successful online marketplaces have all been private-sector ventures, and this may also be true for legal services. However, regulators have an essential role to play. Good information about price and quality is the lifeblood of an online marketplace. For law firms, regulators have a unique capacity to define and gather this information (e.g. through mandatory annual reports from lawyers), and to make it public in a responsible way.
Understanding and measuring law firm quality is a major challenge for regulators. Providing useful and accurate price data to consumers, without encouraging a “race to the bottom” or collusion among firms, is just as difficult. Regulators in the UK are currently world leaders in tackling these problems.
Will shopping intelligently online for legal services ever be as easy as ordering a pair of shoes on Amazon? I’m not holding my breath. Still, online marketplaces are definitely a “space to watch” as the legal industry slowly lumbers forward into the future.
University of Windsor
Faculty of Law