Online legal documents: “not a place for the faint-hearted”

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By Legal Futures

12 June 2012


Online documents: market skewed by free giveaways

The only winners in the online legal documents business are those supplying services to the likes of law firms, financial institutions and trade associations – rather than selling them directly to the end-user – new research has found.

Market intelligence firm RBP also warned that engineering online legal documents is not an end in itself.

It said there are 37 businesses offering a range of forms, data, formations and precedents, but are being undermined by the plethora of free services available from a wide range of sources.

RBP director David Johnston said: “This no-man’s land between professional services markets is so full of techniques that destroy value – actively deployed, enthusiastically pursued, escalating and often recklessly indifferent about the damage done to others – that even standing still is exceptionally hard.”

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Valuing the market as worth £53m, the research said “this is not a place for the faint-hearted”, with profits no better than in other areas of legal information services, and sometimes worse. It estimated the long-term profitability of the market at 13.3%, and the long-term growth rate at 10.8%.

Mr Johnston explained: “Every client of a lawyer or accountancy practice will have had documents supplied as an inherent part of their service, as well as increasingly a range of ‘dabbling freebies’ up front now too. Many of the suppliers to law firms and accountants go direct too, and company formations, credit agencies etc will offer a wide range of documents as loss leaders.

“Every franchise, tradesman, van driver, beauty technician, micro business and SME has access in some form or other to forms and precedents from government sources, trade associations and affinity groups, often backed by insurance advice and assistance too. The insurers go direct as well, often to hundreds of thousands of prospects as well as hundreds of thousands of direct clients. The banks flood the market for every new business with packs and tools, many of which are quite good.”

The issue for those in the market is how to get heard above all the noise. The only successes are those in the niche of supplying retailers with these tools; the likes of Epoq, Law Donut, Qdos, Hotdocs, LawontheWeb, smarta and Employment Law Essentials have 24% of the overall online documents market, it said, up from 6.3% in 2005.

“Winners sell the shovels; they don’t dig for gold,” the research concluded. It also argued that content is not king – “document/precedent quality matters only in context” – while legal engineering and intelligent automation is not an end in itself.

Mr Johnston said law firms tend either to over-engineer the use of documents as a standalone ‘product’ or expect far too much from them as a marketing gambit. While they can form part of a firm’s service, it is unlikely that “a retail document based ploy will reinvigorate the firm’s marketing”, he said.

“Perhaps the key point now is that legal engineering is an established toolkit, but it guarantees nothing in and of itself.”

  • The research is available from RBP for £150. Click here for information.

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5 Responses to “Online legal documents: “not a place for the faint-hearted””

  1. Maybe the low take up is because consumers want human interaction and not to do everything themselves. It will be interesting to see what happens when the Americans arrive. Will Rocket Lawyer and Legal Zoom be able to replicate their success in the US?

  2. Gary on June 12th, 2012 at 10:00 am
  3. Very interesting. It confirms what I have been thinking for some time. Law firms need to recognise that forms and documents are just a small part of the value chain. It’s just content. It’s what you do with content that’s more important. Other markets have shown the service you deliver around content is what matters more than the content itself. Look at Amazon, Facebook, online financial brokers, internet banking etc. We select and use these services because the experience is good, easy and meaningful and not just because of the content.

    I don’t think law firms should get too hung up on documents and forms and instead put thier effort into designing a good cusotmer experience. Get this right and the place for content will become clear.

    Be sure you are looking down the right end of the telescope!

  4. Arlene Adams on June 12th, 2012 at 11:08 am
  5. Interesting observations. Often I have spoken to people who serve professional advisers with services such as process software and documentation, document management, help-lines and consultancy services, who do not see themselves as being in publishing or as part of the same mix as their more obvious publishing colleagues. I do see this as a mistake, when they all have in common the same customer base and. often, the same customers’ clients in their long sights.

  6. Robert McKay on June 13th, 2012 at 4:59 pm
  7. It is a fact that the value of legal forms is heading to zero. Charging clients for forms hasn’t paid off in the long term for lawyers: now people see them as a standalone product and they go to cheapest seller, who’s never a lawyers. Lawyers should educate clients that the real value is in the consultation, not in the form.

    I can go one step further: lawyers should give away the forms for free, as content marketing. It’s a great, free way to showcase your work and brands the firm as a thought leader and a real advisor. Some already started doing it, and eventually everybody will follow, but first movers will have a competitive advantage here.

  8. Veronica on June 13th, 2012 at 6:27 pm
  9. I agree that online legal documents on their own are unlikely to inspire confidence in the end user. Recent research by the LSB in this regard (as reported in Legal Futures on 8 June) bears out the fear of “not knowing what you don’t know”.

    True online legal services will replicate as much as possible of the entire process of a case or transaction, with break out points at appropriate stages for valued advice and representation.

  10. Martin Langan on June 15th, 2012 at 1:00 pm

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