Do we see an emerging business case for online Access to justice?

May 12, 2012 at 8:55 pm Leave a comment

LegalZoom, online legal services company, filed IPO papers seeking for raising $120 million. According to the SP1 form the core value propositon of LegalZoom is ” to make the law more accessible to small businesses and consumers”. LegalZoom primarily targets the small business and consumer legal markets:

“The law provides numerous benefits and protections to businesses and consumers. For example, entrepreneurs incorporate their businesses to shield personal assets, limit liabilities and help raise capital, and consumers use estate planning tools to ensure their assets are distributed according to their wishes and to minimize tax liabilities. According to the U.S. Census Bureau, in 2009, there were approximately 26 million businesses with fewer than ten employees. We estimate that in 2010, approximately two million new businesses were formed in the United States. According to the U.S. Bureau of Economic Analysis, legal services in the United States in 2010 represented a $266 billion market. We estimate that in 2011 approximately $97 billion of legal services were provided to small businesses and consumers, based on a study conducted on our behalf by L.E.K. Consulting LLC.”

The company has served more than 10 million customers in the past 10 years. In 2011 LegalZoom had revenue of $156 million, in 2010 – $121 M and $103 M in 2009.  For the future the company plans to expand its subscription base and grow internationally outside of the US. LegalZoom outlines the following risks:

“- our business and services subject us to complex and evolving U.S. and foreign laws and regulations regarding the unauthorized practice of law, legal document processing and preparation, legal plans, privacy and other matters; 
– if we fail to provide high quality services, customer care and customer experience and add new services that meet our customers’ expectations, we may not be able to attract and retain customers; 
– our business model is evolving from a transaction model to a combined transaction and subscription model, and our existing and new customers may not become subscribers; 
– if we fail to successfully promote and maintain our brand and reputation, or if we incur excessive expenses in doing so, our business may be adversely affected; 
– if our marketing efforts are unsuccessful, our ability to attract new customers or retain existing customers to our services may be adversely affected; 
– if we fail to safeguard our customers’ information and privacy, our brand and reputation may be harmed, customers may curtail or stop using our services and we may face claims and potential liabilities; 
– we expect to face increasing competition in the online and offline legal services markets from law firms, solo attorneys, online legal document services, national legal plans and other service providers; 
– if we are unable to effectively manage and minimize errors, failures, interruptions or delays caused by third parties, or if our third-party service providers cease to do business with us, our ability to deliver our services may be adversely affected;”

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Entry filed under: Access to Justice, IT.

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