Elawyering

Every attorney that I know is suffering financially as a result of the recent economic downturn. In California, thousands of the highest performing, best educated attorneys in white shoe law firms have been let go. And they cannot find a job. What is even more depressing is the fact that things are likely going to get much worse.

For instance, before I went to law school, one of my initial reasons for becoming a lawyer was the fact that it was seemingly impossible to outsource legal work. After all, in order to dispense legal advice, one would have to be a licensed attorney in at least one state. Another thing is that the level of skill and talent would be difficult to outsource to someone who knows nothing about the law. Thus, unlike software development or manufacturing, the legal industry would be safely insulated from the powerful deflationary forces of globalization. Unfortunately, that hypothesis proved to be flawed.

Putting aside the notion that one has to be a licensed attorney to practice law, one disturbing trend for American Attorneys is the increased outsourcing of legal work to India. A lot of grunt work regarding legal research, and transactional work is being outsourced to eager corporations delighted to work for a small fraction of the same fees as Attorneys in the USA. Even more disturbing is the fact that the practice of outsourcing legal work is just getting started. In Beijing, for instance, Jeffrey Lehman, former dean of the University of Michigan Law School and former president of Cornell University, has started up a law school there (they speak English) which will someday be ABA accredited. Graduates of this law school will be able to take the bar exam and practice law in any jurisdiction within the USA from China.

To date, the Legal Services industry in the USA is roughly $135 Billion per year. This comprises about 1% of the GDP of the USA. Surprisingly, the online legal services industry spearheaded by LegalZoom has reported earnings over $15 Billion this past year. Yes, that is 11% of the entire US legal profession. And you can bet your bottom dollar those sales figures are headed north in a hurry. Combine this with blue chip clients revolting from the billable hour, the worst US economy since the Great Depression, and the outsourcing of legal services overseas, and you've got yourself a perfect storm of disaster. And don't forget the fact that ABA accredited law schools across the nation are churning out tens of thousands of fresh and hungry graduates each year.

So, beset with this perfect storm battering the legal industry, what's a lawyer to do? What is the solution to salvaging your law career and justifying your massive student loans? Well, I do not believe that there is one silver bullet. And I believe that the reality is that massive swaths of the legal profession will be completely wiped out over the next three years. But if there's one imperative, it is to cut overhead.

By cutting overhead, you can deliver your legal services and knowledge at more competitive rates to compete with the likes of Legal Zoom or the upstarts overseas. And don't forget that you do have one competitive match that the other guys cannot match: experience. Your personal knowledge of the minutiae within the judicial system, the bureaucracies, your connections, etc. is something that has enormous value. This is especially true in certain areas of law and in some courtrooms.

So how do you cut overhead? For starters, you should know that one of the most expensive costs for overhead for most attorneys is office space. Many solo and small firms can spend between $1,000-$10,000 per month or more on downtown office space. Unfortunately, another source of pruning is human resources. Although it is regrettable to let go a paralegal or other assistant, the laws of economics will command it. Fortunately, there are great technologies such as document assembly software, and other virtual paralegal services that can dramatically cut costs. Depending on your particular situation, you can shave another $1,000-$10,000 here as well. And another prime target for waste management is marketing expenses. Many attorneys can spend $3,000 per month on phone book advertising, $5,000 per month on TV and radio advertising etc. However, you should know that there are powerful forms of advertising that are virtually free to the savvy.

Basically, elawyering is simply offering your legal services over the internet. It sounds complicated and some will try their best to convince you it's rocket science. But elawyering is actually quite simple.

The whole premise of elawyering is that by offering your services and knowledge through a website, you can dramatically cut costs and save your clients a lot of money. Without a brick and mortar downtown suite, and a staff of paralegals and interns, you can cut your rates by 25-50% or more. In so doing you might even be able to become more profitable and improve overall net income as well. What's more you can offer your services unbundled in order to become more cost-competitive.

As you research the concept of elawyering you will hear a bunch of complicated and mysterious buzzwords like "secure portal software", "cloud computing", "jurisdiction-checks", and anything that sounds like a physics experiment. Truth be told, the only two things you need are a website and a secure line of communication between you and your client. Nothing more. Although others will scream and holler that it is more complicated than that.

The good news is that getting a decent website and a secure line of communication is not that difficult or expensive. If you go to the right vendor you can get both for under $2,000 and you can have it up and running between two to five business days. You should avoid vendors who make the process sound like they have a doctorate from MIT. Because at its core, the only thing you need is to have the ability to send and receive email from your clients through a website or a firewall that someone cannot crack into. All the other bells and whistles are superfluous and are designed to bilk the unwary. Kind of like a tourist trap. Virtual Law Office

Other considerations to keep in mind are to have a good SEO campaign, a solid looking website, multimedia on your website, and cost effective legal software to handle all your document preparation. Again, these services and products are actually a lot less expensive and complex as you would be led to believe otherwise. Virtual Elawyer