“The Franchise”

Almost two years ago, I asked here on Slaw “Is It Time For A National Retail Law Firm?”. I argued that some twenty plus years on from the dawn of the national firm model in the business law context, there was a growing opportunity – at least to my mind – for the emergence of a similarly scaled venture focused on consumer-oriented legal services: family law, personal injury, simple wills, basic contracts and other legal services required by individuals and small businesses.

I left off that earlier column as follows:

The gradual loosening of inter-jurisdictional practice rules, the twenty-year track record of Canadian national law firms in the business context, the increasing automation of basic processes and utilization of standardized technology tools like practice-management software in even very small practices, and the increasing competition from non-lawyer service providers and self-help options all suggest to me that a similar national retail law firm in Canada isn’t far-fetched. A franchise model seems a distinct possibility. The big question in my mind is not whether it’s coming, but rather who is going to build it? Over to you. . .

Developments both here at home in Canada as well as across the border have left me with the desire to pull on this thread once again.

First off, here on the home front Axess Law offices (you will remember them as “The Walmart Lawyers”) have been sprouting like weeds across Ontario. Axess has a highly structured operating process and a limited scope / fixed-fee pricing model that has been seemingly purpose-built to scale well in the way most traditional law firms just can’t. According to their website they are currently at 10 locations with two more confirmed sites on the way. I had the opportunity to see the firm’s two founders speak at a CLE conference in the intervening period since writing my earlier column, and I was struck by a couple of things from that session:

1) They seemed like whip-smart “lawyers’ lawyers”, but combined that old-school sensibility with a deep understanding of “New Law” concepts around branding, understanding their target market, and incorporating technology into their practice, and

2) They had very clearly process-engineered the heck out of their business model in order to ensure that they could deliver their services in a consistent, efficient (and profitable) manner at scale.

Axess is to me represents one possible path for the emergence of a National Retail Law Brand – an entity that we can readily recognize as a “law firm” at heart, but one that is not shackled to all the baggage that a traditional law firm model often brings to bear (expensive downtown office space, a loose partnership full of conflicting agendas, and a collection of smart individualists working in silos according to their own idiosyncrasies) and that takes full advantage of technology, branding, and a consistent service delivery model to effectively compete in low-margin service areas.

The second item that crossed my desk recently that brought me back to this discussion was the recent announcement that Avvo has launched a limited scope, fixed-fee legal service across 18 U.S. states (representing 70% of the U.S. population) through a network of attorneys that will pay Avvo a per-service marketing fee for each matter they handle through the service. (As an aside, the potential legal marketing / ethical issues around that per-transaction fee are worthy of a separate post in and of themselves). In essence, Avvo acts as a middleman – finding clients, defining the scope of services, and handling the billing and collection pieces for a fee. And this brings us to a second possible path for a national retail law brand to emerge. Avvo is not what we would normally think of as a “law firm” – rather it is a company/brand that is going to utilize lawyers essentially as freelancers to complete work under its banner. In this model the company brings technology prowess, large-scale funding, and sophisticated marketing to the fore, and then contracts out the actual legal work to its freelance attorney network. Interestingly, in this model control over what services are offered and the pricing for those services is taken out of lawyers’ hands – a lawyer can choose whether to be part of the network, and if so which of the menu of services Avvo offers he/she would like to personally deliver, but the larger decisions on pricing and scope of services are made by the company. Avvo to my mind is a disrupter to the legal industry in the same way Uber is in the taxi industry or AirBnB is to hotels – an outsider that is pushing traditional business models to the side and ultimately challenging regulators to adapt to its existence because consumer markets are speaking with their wallets that they support these new services.

I concluded my earlier column with the statement that the question in my mind was not whether a national retail law firm was coming, but rather who was going to build it. Two years on, I remain intrigued as to whether a national legal brand (or brands) will emerge – and whether it will come from within the legal profession itself or from a “disrupter” that doesn’t automatically play the game according to the traditional rulebook. Interesting times.