The Legal Profession Pivots?

"Pivot" is a hot word these days.  Entrepreneurs need to be able to "pivot" -- refine or revise just about everything that they are pursuing -- in order to survive and eventually succeed.

When and how should lawyers "pivot," on behalf of clients, on behalf of markets and industries, and in their own right?  Lawyers can and should be innovators, too, and even entrepreneurs.

Here is a start.  From Wired comes news of a lawyer startup called, yes, "LawPivot": 

Starting a startup these days is cheap with free software tools, $7 domain names, and robust web hosting for less than $20 a month. But one thing that hasn’t changed: lawyer fees that cost hundreds of dollars per hour.

But now there’s a startup for that problem called LawPivot, that promises to get startups cheaper legal advice and hook them up with good legal advisers from the outset, without emptying their bank accounts.

The problem of expensive startup legal fees came into the spotlight this week. Prominent venture capitalist Fred Wilson issued a challenge to startup lawyers to find a way to lower their fees dramatically, after a company he was investing in got a $17,000 legal bill — even though the investment used standard documents..

That’s where LawPivot, funded in part by Google Ventures, comes in, according to co-founder Nitin Gupta, who called Wilson a “true thought leader.”

“He recognizes that disruption needs to be had in legal industry,” Gupta said. “We want to make it fair for companies and lawyers. We feel startups don’t need to pay $500 an hour to meet their legal needs.”

LawPivot’s solution is to create a Q&A site where startups can ask legal questions confidentially and then get recommended lawyers to answer the question, which can lead to the former hiring the latter.

While California-based startups can now ask three free questions a month, LawPivot will soon be charging companies $80 for each question. For lawyers, the benefit is being able to land new clients for themselves or their firms, and to build a reputation — though they don’t get paid to answer a question.

Currently, many startups simply rely on a recommendation from a friend or go with expensive counsel recommended by investors. With LawPivot, startups can see lawyer profiles, and hopefully be able to choose from a few lawyers after getting advice from each.

Just as important, the site aims to get startups to deal with their legal issues early on, rather than putting them off because getting advice is difficult and expensive.
The full Wired report is here.  Wired isn't alone; here is a page of links to other news coverage of LawPivot.

Who knows whether "LawPivot" will succeed.  But its existence points out that the ongoing problems facing startups that need legal advice are not limited to smaller markets like Pittsburgh:

All entrepreneurs, even grad student entrepreneurs, should get some elementary legal advice *before* going too far down the path of developing a new product or service, and ideally a relationship with a good lawyer will continue *during* development.  Get information about basic corporate law, basic corporate finance law, basic tax law, basic employment law, and basic IP.  Lawyers don't like being the "Dr. No" of the business world, but that's often the default when an idea comes in the door, fully fleshed-out but full of legal problems. 

Even if an entrepreneur gets connected with a lawyer early in the development process, all too often the entrepreneur makes it clear that there are no resources to pay a big time hourly-rate based legal bill -- and then the lawyer drops a big invoice on the entrepreneur after the work has been done.  That's the story that prompted LawPivot, and I've certainly heard that story in Pittsburgh.  Note to clients and prospective clients:  Negotiate fee caps and milestones, and get the deal in writing.

Finally, I love the idea that the legal profession itself is starting to be subjected to pro-active disruptive innnovation ("here's a new business model for delivering legal services"), rather than re-active disruptive innovation ("our corporate clients aren't willing to pay high rates for junior lawyers any longer, so we're no longer going to hire or retain junior lawyers"). 

Here is hoping that LawPivot, or something like it, comes to Western PA.

Comments

2 Responses to "The Legal Profession Pivots?"

Chris said... 3/30/2011 9:44 AM

While I appreciate the idea behind LawPivot's model, I don't think commoditizing legal services will benefit entrepreneurs over the long term. Moreover, I don't think that this service will help practitioners establish their bona fides. I suspect that too many entreprenuers will find that "it depends" isn't a good enough answer and either not continue using the service (or worse) not find out what the right answer is. Likewise, I think attorneys will find that they aren't developing enough business out of this model and simply stop participating.

Technology is not the solution to this problem. Entrepreneurial practitioners with well thought-out solutions to their clients' needs and financial resources are.

Dean said... 4/01/2011 3:03 PM

For Pittsburgh nonprofits, also worth a look: http://www.google.com/nonprofits/

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Pittsblog 2.0 is written by Mike Madison, a law professor at the University of Pittsburgh. Send email to michael.j.madison[at]gmail.com. Mike also blogs at Madisonian.net, on law and technology. Chris Briem of Null Space drops by from time to time.

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