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Step right up and get your legal services, folks! Today only on the Web, IPOs are a flat rate of $20,000, whole trials start at $8000, and the special of the week is incorporation, for the low, low price of $450! Reverse-auction and name-your-own-price Web sites are very popular among buyers of books, computers and airline tickets, so why not legal services? Among lawyers, the fairly new concept of submitting bids for work over the Internet has raised more than a few eyebrows. Some believe that the prospect of lawyers auctioning off their services will cheapen the image of the legal profession and erode the level of prestige it currently enjoys. Others worry that it will create more competition among lawyers and drive hourly rates down to the point at which quality is sacrificed. A growing number of law firms, however, view online fee-bidding as an efficient, cost-effective means of expanding their marketing efforts and garnering new clients. PROVIDERS ON PARADE On Sept. 13, the San Francisco Bay Area Chapter of the Legal Marketing Association, a professional association dedicated to promoting professional standards of law-firm marketing, explored the online bidding concept during its annual Technology Program. The program drew the top marketers from the biggest and best law firms in the San Francisco Bay Area. As Nat Slavin, publisher of Corporate Legal Times, introduced the speakers, the audience of marketers displayed a good deal of curiosity and a healthy dose of skepticism. The panel included Kipp Johnson, CEO of Examen, Inc.; Janice Ugaki, cofounder and executive vice-president of business development of Firmseek; Kay Ellen Consolver, COO of eLawForum Corp.; and, in a surprise appearance, Adam Gutride, vice-president of business development for LegalMatch.com. Two scheduled speakers — Donald Murray, CEO of ELF, and Blaine Prescott, a principal of Altman Weil, Inc., were unable to attend — so Gutride, who was in attendance but not scheduled to speak, was asked to drop his sandwich and join the panel. For her part, Ugaki was quick to establish that Firmseek is a “B2B and G2B exchange,” and “not an auction site.” She described a global marketing tool that enables a law firm to highlight its expertise to potential clients, and to integrate a request-for-information/request-for-proposal platform into the firm’s Web site, making it possible to capture, track and manage such requests. Huh? How about an English translation? Basically, a company or government entity in need of legal services (or any of five other types of services) visits www.firmseek.com, supplies some basic information and briefly explains its project needs and criteria for hiring a law firm. This data then is transmitted to Firmseek member firms, which can express their interest in performing the work directly to the company. Firmseek then steps out of the picture, and the company selects among interested firms in a traditional “beauty contest.” Ugaki also emphasized that in addition to providing a matchmaking venue, “Firmseek offers an entire suite of Web-based services to help firms leverage and profit from their networks.” Where does the bidding come in? Johnson explained that at Examen’s LegalPath.com, “lawyers respond [to posted cases] with a flat fee they want to charge.” For example, a bank can post its desire for debt-collection work, and lawyers submit bids. After the bids close, the bank can select from all submitted bids. SLOW WARMING In theory, competition among lawyers to be chosen to do the work should drive down their fees. There has been keen interest in LegalPath’s service among lawyers, although relatively few companies have signed on, and only a modest number of transactions actually have taken place. Similarly, attorneys using LegalMatch.comare seeing a small but growing number of posted cases. LegalMatch operates along the same principles as Firmseek and LegalPath, although Gutride admitted to the large-firm marketers that “your firm probably won’t use our service.” Attorneys using LegalMatch generally range from sole practitioners to members of small firms of about 10 to 20 lawyers. A very different approach was adopted by eLawForum, which seeks first to sign up Fortune 1000 companies in need of legal services, and then to attract large law firms to the client base. “We make the choice more efficient,” said Consolver, who described the service as one that assists firms in their quests for the best clients. There is diversity also among the sites’ billing structures. Both LegalPath and Firmseek charge annual fees to participating firms and attorneys, but eLawForum is paid a percentage of the legal fees by the clients, and the attorneys pay nothing. NOT EVERYONE’S CUP OF TEA The online matching services have drawn mixed responses from large, traditionally conservative law firms. Many see the sites as better suited for firms that handle “commodity”-type cases. Asked whether Littler Mendelson, a national employment and labor law firm, was considering using such a service as a marketing tool, Proposal Manager Cheryl Handel responded, “I am certainly willing to consider online services,” but was quick to add that she would only consider them if “the process makes good business sense, is a cost-effective use of our resources, and complies with all ethical guidelines.” Unlike most firms its size, Littler focuses on a single niche practice area, handling a full range of employment-related matters for clients that range from small companies to the Fortune 500. For this type of firm, it might be worthwhile to have one of its attorneys bid, for example, to represent a restaurant owner in need of an employee manual and defense in a sexual harassment suit. Other big-firm marketers, however, do not see these online services as a viable marketing tool. Frank Moon, marketing director for Jeffer, Mangels, Butler & Marmaro, said, “We looked into them briefly and they were largely dismissed.” He believes the services are fine for commodity legal work, but stated flatly that “the type of work our firm does is not something you can find in the phone book.” In other words, not just any old client is going to qualify for services from Jeffer, Mangles. “We represent motion picture studios; they know how to find us.” INEVITABILITY FACTOR As Moon implies, online bidding for legal services currently is not for every law firm. The process by which many firms and their clients find one another, however, is not fundamentally altered by the shift to the Internet. Rather, as with so many products and services, taking it online saves time and energy. Eventually, most firms will come around and use these types of services as an additional marketing tool. Many of the matching sites will not charge them unless they actually obtain business through the process, so there is nothing to loose. If for no other reason, the firms will make the transition because they will have an increasing number of Internet-savvy attorneys calling the shots for them. The only question, then, is whether companies like Firmseek, eLawForum and Legal Match will be the ones to win the law firms’ loyalty, or whether the online matching game will come to be dominated by some other legal services giant, such as Martindale-Hubble or West Group, that decides that Internet bidding is a lucrative ancillary business. One thing is certain: The online matching services, especially those that take a percentage of the legal fees generated, stand to generate enormous revenue if and when the law firms do come around. Holly Pranger is a student at Hastings Law School, University of California (’01), where she is the founder and president of the Internet and Technology Venture Group. Holly is currently the Business Development Manager for LegalMatch.com. This piece first appeared on Pro2Net.comin October 2000.

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