Google: first investment was in crowdsourced legal advice for companies

Internet behemoth Google has made its second foray into the legal market by investing in US online legal service Rocket Lawyer.

Its venture capital arm, Google Ventures, has joined a group of investors putting $18.5m (£11.4m) into the company, which provides a subscription-based legal document assembly service, including electronic signature, backed by lawyers across the US who review the documents for free and offer discounted services for more complicated matters.

The financing, led by August Capital and also including Investor Growth Capital, will be used to build Rocket Lawyer’s brand and patent-pending online legal solutions. The company says over 15m small businesses and consumers have used the service; each month more than 20,000 wills and 40,000 business contracts are created.

Lawyers pay $90 a month or $900 a year to be part of the referral network, and also have access to the document library and online marketing tools.

David Hornik, general partner of August Capital, said: “As a former attorney and venture capitalist, the value proposition for small business owners and individuals is truly outstanding and very disruptive, as Rocket Lawyer drives down costs to benefit both the consumer and the local attorney.”

Google Ventures partner Wesley Chan said: “We see a large market opportunity for legal solutions that are easily accessible and affordable to users. Rocket Lawyer’s combination of an intuitive user-driven front-end with a strong technology-based platform uniquely positions the company to scale and deliver the type of ‘wow’ user experience that online customers love.”

Earlier this year Google Ventures also put money behind LawPivot, which offers crowdsourced legal advice for businesses with or without in-house lawyers. Companies – which will soon pay to use the service – submit a question and LawPivot selects the best lawyers to answer it; the company can choose to receive replies from all, some or one of them, and can then continue the conversation.

Online document assembly is rapidly gaining traction in the US; Epoq Legal, the leading provider in the UK, also has a US operation, while LegalZoom has become on the country’s biggest legal brands. It provides an in-house document review process performed by non-lawyers, which has become controversial in the US with questions of whether this constitutes the “unauthorised practice of law”.

LegalZoom was reported to have received a $66m injection from investors last month and talk of the company listing continues to swirl around.

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