It’s difficult for folks to find a lawyer at an affordable price, even when many lawyers are sitting jobless. In other words the marketplace for lawyers is inefficient. This is bad for everyone and makes all of us poorer in terms of access to justice.
The legal market is also not fully realized. As per the Legal Transformation Institute: “50% of US consumers have at least one legal event per year but only 20% of them use a lawyer”. According to one estimate from the same organization, the untapped value of this market is north of $45 Billion. It states that “There are 23 million small businesses in the US. Roughly 7 million did not seek the help of a lawyer when presented with a significant legal event. Those that did get legal help, report that they spend on average $7600 per year. This creates an untapped market (the 7 million who avoid lawyers) equal to roughly $45 Billion.
Flipside: There are about 1.3 million lawyers in USA (American Bar Association, 2015); many are jobless; yet the lawyer unemployment rate has grown for the sixth year to 15.5 percent(National Association for Law Placement, 2015)
So why is there such a disconnect?
First, getting legal help is unaffordable for many consumers or small businesses. Therefore many potential clients avoid getting legal help Consider the case of a software startup seeking to sign an office space lease contract or brining on-board a computer science graduate who requires work visa in USA. In Seattle area for example, an immigration attorney can cost any where between $300 to $450 per hour and visa packages are around $5000 to $10,000 per case. Any follow up work can be extra. Long term costs add up quickly. So pursuing legal help is financially a major decision which leads companies to perform suboptimally.
Secondly there is tremendous friction in getting legal help. Locating a lawyer one can trust is difficult. Usually the process begins by searching on Google or asking from your social circle. It’s difficult to find quality indirect validation of an attorney’s work.
Setting an appointment is another lengthy process. Usually there is be back and forth in explaining the problem to the attorney’s secretary to see if the case matches attorney’s specialization. First time clients are uncofortable disclosing sensitive case details not knowing if the phone or email conversations enjoy the attorney client privilege. Then setting an appointment — usually exclusively in business hours — can be challenging for a potential client who is is likely working a full time job. Legal offices also generally not technologically advanced so don’t have responsive email communicaiton or online calendars which add to the friction.
Why are laywers so expensive ?
As a recent law review article notes, “The typical legal services consumer in the U.S. makes approximately $25 per hour, and is priced out of the services lawyers provide even at low attorney rates of $125-$150 an hour.” In fact, as per the the guidelines from the U.S. Department of Justice in the document “2013 Laffey Matrix” attorneys can be charging as much as $245 per hour.
Accordingly to LawCrossing.com, law office have operating expenses that chip away more than half of the revenues. These are things like the lease for office space, marketing costs, maintaining a staff, the internet and telephone connections, courier fees and other office equipment like fax and copier machines
So if the operating expenses can be reduced, legal help can be made more affordable, and the market size in terms of number of clients served or the net incomes of all the lawyers can increase.
A new approach can be taken to solve this riddle. The approach is to use software to create efficiencies in how clients interact with lawyers. Divorce papers can now be prepared using JDivorce, a web based, free, document assembly tool. The tool was just launched by a legal tech startup in Seattle founded by UW, Microsoft and Amazon alums.
While JDivorce allows Pro Se clients to prepare paper work, but it’s larger purpose is to connect clients with lawyers. Lawyers can setup a free profile and don’t need to pay anything. In future, if the startup gains traction, it may charge lawyers a referral fee only if the client ends up hiring a lawyer.
The tool is an improvement over existing free solutions as it covers all common case types including “with dependent children”. It also has a very modern look and feel.
JDivorce is secure, encrypted, and maintains user privacy. It follows Washington state guidelines for filling forms e.g. clearly marking questions as NA which don’t apply to a user rather than leaving them blank.
The tool is limited Washington state only for now.