Rocket Lawyer: Just Another LegalZoom...Or the Fastest Growing Legal Start-Up We've Never Heard Of?
There's a "new" player in town and they go by the name "Rocket Lawyer." "Who?" you ask. Followed by, "What do they do?"
Just like many of you, I was caught off guard when I read the Forbes post yesterday about Google investing a big chunk of change in a company called Rocket Lawyer.
That's correct, according to Forbes, Google has "entered the online legal marketplace" with an investment in a San Francisco start-up called Rocket Lawyer.
Rocket Lawyer was founded three years ago “to make legal services easy and affordable for everyone,” according to their website. Users can access legal form templates, customize them, download and share and also have their documents reviewed by “a real lawyer” for $19.95/month for personal legal documents or $39.95/month for both personal and professional (business) legal documents.
Rocket Lawyer also has a lead referral service they call Smart Referrals Program – an attorney can pay by the month ($89.95) or by the year ($899.95) for local referrals the website generates.
Recently, I had the pleasure of meeting some of the staff from Rocket Lawyer while speaking at the California Bar Solo and Small Firm Summit. They were very sharp and excited about their business.
However, when they started talking about the amount of website traffic they were generating, I must admit I was very skeptical.
As someone who tends to stay current on what's happening around me -- and especially in the legal industry -- I had heard their name before, but didn't know anything about them or their services.
As it turns out, they may just be the fastest growing legal start-up we've never heard of. With revenues of more than $10 million this year, and a series of venture capital investments by some major players, CEO Charley Moore has certainly positioned the company to grab a lot of market share in the upcoming months!
From a strategic perspective, I think there's a lot of room for these types of service providers in the legal industry and Rocket Lawyer may be perfectly positioned to become a market leader...as long as they can avoid 2 major pitfalls:
1. Getting in trouble with the State Bar Associations like LegalZoom. When the Forbes writer tried to differentiate the two services, he didn't get it quite right when he said that LegalZoom doesn't work with attorneys. I have it from an inside source that this is precisely one of the growth strategies that LegalZoom is actively pursuing--working with actual attorneys in the form of...wait for it...using the pay per lead (PPL) model!
From what my source has told me, they are seeking to set up what could become that largest PPL provider in the legal industry. So from the legal industry's perspective, that's not really a true distinction between the two.
In case you aren't aware of the fast changing game of law firm marketing, let me give you some context of the newest business model: Pay Per Lead (PPL) is when attorneys pay a set amount per lead that is provided to them, regardless of whether or not that lead becomes a client.
Total Attorneys, a nationally recognized PPL company that provides leads to primarily bankruptcy attorneys on a pay per lead basis (they have leads for other practice areas but are most well known in the field of bankruptcy), has taken the lead on proving this new business model.
They have spent hundreds of thousands of dollars, perhaps even millions, defending over 40 different lawsuits defending the right of attorneys to obtain leads on a PPL basis. To the best of my knowledge, they have won every single one of them and--kudos to them--have also paid all of their clients’ legal bills as well. Now, many other companies and websites are getting into the PPL model--including LegalZoom.
So, if both LegalZoom and Rocket Lawyer work with and refer to licensed attorneys, what's the real difference? I don't know. Rocket Lawyer will need to build their case and quickly before attorneys and the Bar Associations make up their minds.
Here's the second pitfall Rocket Lawyer needs to avoid:
2. Having attorneys see them as competitors. If they aren't careful, they can end up just like LegalZoom and become the new "evil" that is "leading consumers astray"...or something like that...which is how most attorneys I meet now look at LegalZoom .
Instead, Rocket Lawyer needs to actively develop specific ways for attorneys to see them as a benefit and even possibly a lead generator for their law firm, as well as a way to assist clients who aren't willing or financially able to spend money on hiring an attorney for basic documents.
Only time will tell which road they will choose and how attorneys, the legal industry, and thus Bar Associations will perceive them, but as of now the choice is still theirs to make.
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