Interview With’s Chilwin Cheng

FiredWithoutCause's Jim Hamlin (left) and Chilwin Cheng (right)Last month I wrote about Fired Without Cause, an online legal service for consumers created by Vancouver startup Paradigm Shift Solutions Inc., formed by Chilwin Cheng, LLB and Jim Hamlin, a software development expert. Since I’m curious to know how innovative companies get started in the Canadian legal industry, I arranged for a telephone interview with Chilwin Cheng through his PR company Fleishman-Hillard.

Connie: I want to start at the beginning. Where did you do your law degree?

Chilwin: University of Toronto.

Connie: Are you originally from Vancouver?

Chilwin: I’m originally from Vancouver, grew up in small town Port Moody, got my Bachelor of Economics from Simon Fraser University and then went to law school immediately thereafter.

Connie: How did you get started with FiredWithoutCause? What prompted the idea?

Chilwin: I had an entrepreneurial streak in me forever and I have also been concerned about the ability of Canadians to afford lawyers and access to justice. I had never thought that the solution to access to justice is to ask lawyers to work for free or to get them to reduce rates. I’ve always believed that only with new operational models can lawyers deliver. I should say not just lawyers, but the legal system can serve Canadians with innovative new business models and the ability of providing over the Internet enables low cost accessibility to legal information. I think it’s just the start of that trend, so that’s kind of a big picture.

And as a result I’ve had a business model in mind for a number of years and probably started about 2 1/2 to 3 years ago. Then I was actually the chief prosecutor for the Stock Exchange Regulator, that was with the old Market Regulation Services. They merged with the Investment Dealers Association and I was laid off. I was based in Vancouver but I wasn’t prepared to move to Toronto. Going through that experience made me think that wrongful dismissal would work perfectly for the business model that I had in mind. I was going through the Executive MBA program at the same time so one of my teammates and I got together, he was the IT professional, my business partner Jim Hamlin. So I brought the law side and he brought the IT web development side and we collaborated to create

Connie: What need do you think you are filling with this service? The timing seems impeccable.

Chilwin: It was honestly entirely coincidental. As I said, I’ve had this business model in mind for some time and it wasn’t until last year back in July when I was laid off, this was before everything started to melt down.

We’re not here to replace lawyers, in fact we think that we are expanding the demand for legal services. What we’re really after is to help the ordinary Canadian, the Canadian who if they could increase their severance by just one week, that’s $500 for the average income. That’s a month of rent for the average Canadian or 5 weeks of groceries, and they can’t afford a lawyer to just provide some initial routine legal information or advice. So this service is targeted to help those Canadians, which frankly is the vast majority of us. Only if the case is really worth pursuing and there is a wide discrepancy then they can go on and see a lawyer.

Also, because we rank so highly in Google, when people are searching for information about wrongful dismissal they can find some readily available accurate, simple, easy to read information about wrongful dismissal so that they can understand those rights. Many people don’t even know what they are entitled to, and so we fill that need as well.

For the lawyers, what we’re doing is we’re expanding the market. There are now more people that know they are entitled to these rights and we also can prequalify clients that have cases that are worth the time of the lawyer. Which for lawyers, they often spend a significant amount of time trying to speak with a client and the best they can do is sit down with them for an hour and realize that it’s really not going anywhere. So we can help bridge that gap as well.

Connie: How has the reaction from the legal community been so far?

Chilwin: I think guarded. I like to think that we are offering something quite different and lawyers are notoriously conservative. No one has attacked the idea directly. Many people will say, well, it won’t replace lawyers, lawyers add something to it that this calculator can’t provide, but we’re not after the whole enchilada of legal services. Really we are just at the niche of people who just want to know if what they have is within a reasonable range of their severance. We’re not looking to provide comprehensive legal advice. That’s not what we’re set up for. We’re there to support people when they just need some basic legal information. We’re more than just the free stuff you can find, where the actions have a ballpark of whether or not what they got was fair from their employer.

Connie: It seems like you have created a new niche then in some ways.

Chilwin: Absolutely. What we’ve done is rearranged the legal value chain. This is to use MBA talk here but we’ve reconfigured the value chain to fit a low-cost model. Most lawyers work on a certain kind of value chain which is overhead heavy and also requires significant labour leverage and we are trying to reconfigure that.

Connie: Will we see more direct-to-consumer legal services like FiredWithoutCause?

Chilwin: Well we already do. We have a number of, for example, business form websites that are out there. I see significant opportunity to improve on that myself. There are a number of services, for example, in the area of family law, where there are some attempts to bring the family support guidelines to the public. Right now most of that is really lawyers providing software to other lawyers, but I’m starting to see some glimmers of potential direct-to-consumer type of calculators. So, it will require some significant mindset and commitment to changes on the part of lawyers. I have worked on this almost full-time for the past year and a half, along with my own savings, to bring this to fruition. Lawyers are going to have to make some tough choices for themselves about whether they want to pursue one kind of business model or the other kind of business model.

Connie: I can see that. Do you think the economy will probably help that along?

Chilwin: You know it’s funny. One would think so, but there is a certain culture in the legal profession. In the lawyers that I’ve talked to, many saw a slow-down in their business and referrals and file openings for the past couple of months, but then as soon as business starts to pick up, which some of my colleagues in Vancouver seem to be experiencing, I mean they are right back practicing in the traditional way. Again I think it will require some real mindset changes before they break out of the traditional production model.

That’s why my business partner and I called our company Paradigm Shift Solutions, it requires a change of paradigms, seeing how law is delivered to people in the Internet world. You’ve got Richard Susskind who talks about the symptoms. I agree with a lot of what he’s saying, but I think there’s a missing piece to what he’s talking about, and my perspective is that lawyers and actually professionals generally need to think about this implication. What do you do in a world where data is free? Wisdom is free. But people are prepared to pay for information? It’s those fundamental economics, the economics of information. The difference between [Asao] Fujiyama’s theory of tacit knowledge versus explicit knowledge. Until lawyers get a handle on that, they will be trapped in the traditional model. What I’m trying to do is to say, I think I understand where this is going and I’m trying to develop some new business models around those concepts. The lawyers need to choose which part of that knowledge section they want to be on. That’s I think when you read CBA National and all the lawyers’ magazines, no one seems to be addressing the nature of legal knowledge itself.

Connie: The large law firms are trying to figure it out within the firms, but they aren’t using it to change the business model the way you are, from what I can tell.

Chilwin: They are trapped with their cost models. In my personal view they would literally have to commit to laying off everybody and re-starting.

Connie: You had a lot of mainstream media coverage. Congratulations on that.

Chilwin: Thank you.

Connie: How has that gone for you?

Chilwin: It’s gone fantastic. We needed to get that initial burst of credibility for our site and as a site that is quite different, a new kind of offering and to be able to get some fantastic support from mainstream media has been very helpful for us. In particular because in order to make our model work, it needs scale so we needed to go national. We couldn’t just be a lower BC operation, so the fact that we had national coverage from coast to coast just fell into our business strategy.

Connie: I notice that you brought in Fleishman-Hillard to help with that. How has that gone?

Chilwin: That’s gone well for us. Again, largely because they are a well known name in the traditional media world. Folks like yourself are well known in the online world, but we needed some credibility with the traditional media so we went with a brand name for PR.

Connie: This is just the start for FiredWithoutCause; where do you see it going? Do you have a path for the future?

Chilwin: We do. There are certainly some features and functionality that we want to enhance with the site, make it easier to use, more value for our customers, be able to respond more quickly to our customers when they provide us with inquiries. We have some projects in our pipeline that we are working on but if you don’t mind I’ll demur at this time. You’ll be the first to know as soon as we start putting those out.

Connie: Thank you very much. Is there anything I haven’t covered that you want to mention?

Chilwin: It’s been great talking to you. Because of the casual nature of our conversation I’ve been able to talk a bit more about the higher level issues and my concerns and my true passion for the legal industry. We, as a profession, need to get a handle on these higher level issues and not just talk about value pricing. It’s not just about pricing but the nature of knowledge is changing and I feel like we are still treating knowledge like it was done back in the 1300’s and it is changing. I think lawyers should be reading much more about [Jürgen] Habermas and post-modernism and understanding how people legitimate knowledge nowadays. I think the answers to our profession, the challenges we face, it is found in those ideas, not in purely accounting tricks and changing how we bill and pay people. For now, if we can do that we can serve Canadians better and in the meantime, my hope is that FiredWithoutCause is the first of several ventures to bring law to the people in a cost-effective way and to empower people with legal information so they can get the help they need whether they do it by themselves or engage a lawyer when it is serious.

Thanks to Laurie Mapp of Halo Secretarial Services for transcribing the interview for me. I did some light editing for the print format.

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