The New Legal Economy and What It Means for Small Companies
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For small business owners adhering to a budget, finding a lawyer usually isn’t No. 1 on their wish list. But as so many managers have learned the hard way, proactive legal advice is often a money saver even lifesaver in the long run.
It’s no revelation that the big businesses have fulfilled their legal needs easily at large, one-stop shop firms. Smaller businesses have long struggled to find excellent legal coverage that doesn’t cost an arm and a leg. They have relied on referrals from friends and colleagues to navigate the fragmented and opaque market.
In 2011, an American Bar Association study found that less than 7 percent of consumers searched for lawyers online. Small business owners searching for a lawyer turn to family, colleagues and friends. While the answers to queries “do I need a trademark” abound on the Internet, it’s a wilderness on Google when it comes to deciphering who might be the right lawyer to pick. This is true for myriad reasons: the sheer magnitude of options and lawyers’ reticence to sell their services online. Also when someone hunts for a lawyer online just using a search engine, the list of law firms generated is not ordered by the quality of their services and the whole industry is not represented.
But now, the United States is on the brink of ushering in a new legal economy -- and it has consequences for small businesses.
A decade ago it was unheard of to ask strangers on Quora to opine on a legal concern or comb through droves of legal documents on Docracy. Now it is commonplace.
And hiring lawyers online will also evolve in a similar fashion.
So far, most of the resources online have targeted price not quality. Most early online legal solutions were focused on finding customers the lowest price not the best value, so web options provided no panacea. But with more options cropping up, the number of business owners searching for and hiring lawyers online will increase.
My company, Priori Legal, which provides an online platform that connects small business owners with a network of attorneys, recently conducted research with 120 small business owners or managers exploring how they hire lawyers and contract for legal services. Here are the findings:
Friends and colleagues remain the primary source for legal referrals. Of the small business owners surveyed, 61.3 percent reported searching for legal advice online but only 21.4 percent searched for a lawyer online (and less than a quarter of those hired one).
Small businesses want high-quality and subject matter expertise, above all else. When small business owners named their top considerations in hiring a lawyer, 74.5 percent of respondents prioritized finding a lawyer who was highly recommended by others, 67 percent wanted an attorney with experience dealing with their specific legal problem and 63.2 percent sought a lawyer with experience in their particular industry. This can be compared with a mere 13.2 percent who stated that price was their most important consideration.
These findings reflect what I see every day. More often than not, the biggest differentiator when it comes to a company's selection of a lawyer is expertise not price.
The bottom line is that business owners can gain access to top lawyers at lower prices. As higher-quality lawyers cultivate their online presence and online services curate them, the new legal economy can finally satisfy small business owners’ desire for quality in service and simplicity in the search.
These trends will change the way lawyers are hired by small businesses -- just as they have altered their methods in recruiting other professionals. And this may have far-reaching ripple effects, with entrepreneurial lawyers gaining more opportunities to provide great legal services to small business owners. And over time, the fees at larger law firms might be lowered as a transparent marketplace coalesces online.