Are you looking for a Legal technology hub to learn about the industry and potential jobs? You’ve come to the right place. We will talk about the trendsetters in this article, including Clio, Clearway, and Avvo.

Back in 2007, Jack Newton (CEO of Clio) saw that the cloud was going to revolutionize the legal industry.

These kinds of disruptive waves of tech don’t come along that often. Mobile phones were the last wave of tech to change the world back in 2010. Artificial intelligence has yet to come through and majorly change any industry. The other founder of Clio, Rian Gauvreau, used to work at Gowlings as their IT manager.

He realized that the technology that law firms were using was garbage. Around the same time, the law society was looking for better technology to help smaller law firms stay in compliance. Only large law firms could afford a large support staff to stay on track of everything. Solo practitioners didn’t have anyone to help them stay on track.

Therefore, Clio said that small law firms should use technology to catch the ball before it drops. This would help solo lawyers and small law firms stay in compliance.

Good Technology That Is Affordable

There was no good technology that was affordable. Lawyers would have to hire an IT manager and build a server. So Clio built practice management software that is cloud-based. This meant that small law firms would have to hire a tech manager and build a server. If you are building something that doesn’t exist, there are two outcomes.

Either there is no market for it, or you are about to become very wealthy. Clio was started by the founders of Clio remortgaging their house for capital. There was no investment around 2008 because of the financial crash.

Legal Education and the Online Courts

The real question was, will lawyers and the Law Society be comfortable with the information being stored on the cloud? Jack Newton is a big fan of the book, The Four Steps to the Epiphany. The book says to forget about the product development exercise. Instead, think about customer development. Understand what your customers need, and then work backward from there. The important part of the book is the idea that if you can find 10 customers, you can find 100.

If you can find 100 clients, you can find 1000. But the key is to understand what the first 10 customers need. And then go and build the product after you know what the clients want. The job of a tech company is to make it look like their customers have superpowers. Clio’s first customer came around 2008 around the time they built the beta version of their products. They were very strict about who they let into the beta.

Clio is a Legal Technology Hub. It’s a central place that meets the needs of lawyers.

Legal Technology Hub

They would do onboarding for each new customer. During a beta, means that there are bugs everywhere and customer information could be lost. Their first customer wasn’t just testing the product but was using the product very heavily. The customer loved the product and found a lot of errors. Clio then worked hard to fix all the issues. It was a call to action to make the product work for this first customer. If it worked for the first customer, it would work for thousands of other customers. Clio now does over $100M in sales each year. It’s valued at around $1.7B.

Lawyers are only using around 25% of their time for billable work

According to Clio, lawyers are only using around 25% of their time for billable work. This means that 75% of the time lawyers spend at work they are not getting paid for. The average lawyer only gets paid for around two hours of billable work per day.

And then clients only pay around 80% of the bills the lawyers send out. Therefore, lawyers are only getting paid for around 1.8 hours of work per day. Pretty terrible. Many lawyers thought they would get rich when they were law students. For many lawyers, this was not to be. Instead, they are just trying to get by and pay their bills.

Client Expectations For Law Firms

There is also a massive gap between lawyer expectations and client expectations. There needs to be a bridge between lawyers and clients. When customers are looking for a lawyer, they simply want to be called back. Many clients have a hard time speaking to a lawyer.

Despite the fact that many lawyers complain about not having enough clients, they do a terrible job closing the leads that they do get. Many lawyers do not even know what a “lead” is. Lawyers just see people as either clients or non-clients. The lawyers don’t see the need to move a lead through a sales funnel.

Mark Britton, the founder of Avvo said that fewer than 10% of people that use Avvo get a callback or email from a lawyer who receives a lead. This is completely unacceptable. Every law firm needs to think about the customer experience when reaching out to firms.

Lawyers Need To Be Open To Working Remotely

These days as long as lawyers have a good internet connection at home, they can be successful working remotely. One of the things that people love about working from home is that they can see their family more. Instead of spending this time in traffic, you can spend more time with your kids.

During the COVID-19 pandemic, it was obvious that lawyers needed to upgrade their technological capabilities. It’s not a requirement for lawyers to be 100% cloud-based. But they do need to be open to change. Because change happens regardless of whether they want it or not. Managing partners need to focus on the productivity of the lawyers that work for them. Not where the lawyers are working from.

Legal Technology Concept Validation

There are so many reasons why legal tech startups fail. Most of the time, it’s because the market didn’t want what the company was selling. Legal tech is a specific industry. The legal industry is highly regulated as well. The technology company might not be regulated by the law society, but their clients are (the lawyers.)

It’s important to know what the Law Society rules are. Ideas are fantastic but the problem is that you shouldn’t fall in love with your idea. You must be able to accept feedback. You need to ask yourself what problem your issue solves. Is it a dollar issue? Are you saving your customers money?

Understand your customers

You need to understand your customers. Saying your customer is a law firm is not good enough. What types of lawyers are you going after as customers? You need to build this out and really know this. You need to know who the competition is. Don’t say you are unique.

There is always some form of competition out there. You need to have deep thoughts and research about this. Why are you the right person to bring the product? Why is right now the right time? Many companies come too early or too late.

A great way to do concept validation is to say something like…

“We believe that lawyers struggle with setting up technology. So we created a product that helps lawyers set up their IT. Their customer is lawyers who are setting up their own legal office for the first time. Our competition is expensive and confusing. We can help the lawyers set up much quicker and cheaper.

We are the right ones because we have been in the industry for five years.” It’s okay to pivot if you are not making the difference that you wanted to make. ClearWay Law did that ourselves. We couldn’t make the difference that we wanted as a law firm. So we moved into being a legal technology company.

Signs Of A Good Problem To Solve

If you are not solving a real problem, people are not going to pay you for it. The pain point also needs to affect lots of different people. There needs to be a prominent issue. Something that someone needs only once in their life is not ideal. You want to find something that is regular to sell to people. It should also be time-consuming.

It should take up a lot of time for your clients to do. Further, it should be stressful or boring for your clients to do. They would rather pay you than deal with it themself. Also, if it’s complex like family law, a lot of people would rather hire a lawyer than deal with it themselves. You don’t need to solve all the issues, but you should solve multiple problems.

Legal Technology Hub

When you get to an answer, you should ask why again. You can call it the five “why’s.” If you ran a red light, why? Because I was late for work. Why were they late for work? Because I don’t have an alarm clock. And you can keep drilling down on the “why” to find the real problem. You need to get to the core of the problem.

You should do 50% on client development. Also, you should do 50% on product development. Early on product development is not very important at all. It’s much more important to talk about customer development. If you don’t know your customer, you are probably building towards the wrong thing.

However, if you don’t end up building the product, the customers will never come to you. Who is the stereotype of the person that would use your product or service? You want to get into their mindset. Do you want to include how are they feeling? What influences their decisions? The more information you have the better.

Some Examples of Legal Technology

In the graphic above, Clearway Law would fit into the “tech-enabled B2C legal services” category. Our company is most like Avvo. Avvo doesn’t operate in Canada. You can also see that LegalZoom made the list. Clio is in the Law Firm management suite. We have also written about Axiom in the past. We don’t believe Total Attorneys exists anymore. Many of these companies operate outside of Canada. LawDepot and lawyer.com is well known in Canada.

77% of legal issues go unaddressed by lawyers

The best companies respond to leads in minutes. Top software companies like HubSpot get back to clients extremely quickly. When lawyers get back to clients within days, it’s horrible. It’s important to measure the response team in minutes. If lawyers think two days is good, and customers think two minutes is acceptable, how do you bridge the divide?

There is so much opportunity for lawyers to thrive in the industry. Also, to make their clients happier and to solve the access to justice problem. However, things are not moving fast enough. Lawyers need to do a better job at innovation. 77% of legal issues go unaddressed by lawyers.

Any industry that was well put together would find a way to quickly solve this problem. The way that legal services are offered today is the same that it was thirty years ago. Lawyers learn how to practice law from those that practiced law thirty years ago (law school professors.)

Downloading legal forms

Legal websites are a popular place to go when consumers are looking to download a legal form that looks convenient and cost-effective. Many legal professionals have argued that using such platforms could cost you money in the future. That legal forms are inadequate and in some cases could even lead to larger problems later.

It’s up to you to decide if you are comfortable taking the risk of downloading legal forms on the internet. Next in this article, we will take a look at the future of lawyers, or if legal tech companies will completely take over. Are lawyers even needed anymore? We are working hard to be successful in the legal innovation industry. We have gathered several of the lessons we have learned by speaking to and studying major successful companies.

Evolving legal trends

The internet changed everything over the last two decades. As time went on, it was clear that lawyers were going to need to catch up to evolving legal trends. Many law firms also don’t understand marketing. Gaining top spots on Google requires writing thousands of blogs. You need to get tons of backlinks in the media. The media only publish around 5% of the articles that are sent to them. We put together a guide for SEO for lawyers that’s worth checking out.

At the end of working hard at content creation, you need to make sure that once someone comes onto your website, they convert into a lead. Only once someone converts into a lead can it be sent to a law firm. Law firms are willing to pay good money for quality leads. We saw that this business model was working well down in the USA, and we wanted to bring it to Canada. At some point, once we decide to scale across Canada and later into Australia and New Zealand.

An online platform for legal services connects people with a legal problem and a lawyer. This is done in a way much easier than before. People can quickly find the best lawyer for them. And unlike a law firm, an online business requires little money to run the business.

There is no fancy office, office supplies, or art to line the walls. All the money goes into improving client service, branding, marketing, and technology. Most legal innovation focuses on artificial intelligence and high-end technology services.

But what about fixing the most simple of problems? According to the Legal Trend Report, 64% of people have a hard time connecting with the right lawyer. Legal tech companies need to focus on solving that basic problem.

Legal Education and The Future Of Law

ClearWay has gotten involved with organizations such as the Legal Innovation Zone in Toronto. The Legal Innovation Zone (LIZ) is an example of a legal technology hub.

We are working hard to use any resources they offer to carry out our mission of improving the legal industry. We use to be a law firm, so we know how hard things can be for lawyers.

Lawyers are now our clients. We work hard to make sure they are connecting with clients that are serious about hiring a lawyer. For the past few years, we have been trying to direct lawyers, innovators, and techies to the massive untapped market that is the legal industry.

60-80% of individuals going through the courts during a family law dispute do so without a lawyer. There are new kinds of companies competing with law firms. Many lawyers want to start their own businesses. The idea of being their own boss is very attractive.

Legal Technology Hub

The idea of working for 10 years just to have the opportunity to invest money and “make partner at the firm” isn’t as attractive to millennial lawyers. Old school law is failing. Younger lawyers want work-life balance. They want to help clients, earn money, and go hiking (or drinking) on weekends.

But things are getting hard for new law firms these days. Technology companies such as Avvo and LegalZoom are entering the industry and crushing small law firms that don’t have a marketing budget to compete. Many clients find their lawyer online these days and many lawyers don’t understand things just like SEO and pay-per-click advertisements.

The tech companies have other advantages as well. They are not regulated in the same way that law firms are. They don’t have to report to the law society. Tech companies have no industry-wide regulator.

This means tech companies can grow much faster than law firms. Further, they also often have a better business model, since the management is made up of businesspeople instead of lawyers. Many lawyers are too risk-averse to grow a company.

Tech Companies Can Raise Capital Easier Than Law Firms

It’s also easier for these technology companies to raise capital. Some companies such as Avvo are a success story in how legal tech companies can raise money. The owner of Avvo just sold his company for around $850 million USD. Other companies such as Atrium are a warning to other legal tech companies. Atrium after raising $65 million dollars appears to have failed.

Avvo created a legal technology hub. It’s a one-stop-shop for legal needs.

They just laid off most of their legal staff. Atrium tried to run a law firm and a tech company at the same time, and it seems they are shutting down the law firm part of their business. Instead, they plan to focus on providing tech services to lawyers.

If you are starting a legal technology company or want to build a legal technology hub, below are some tips on how to be successful.

You Should Know How The Law Works

The best legal tech companies are created by people who understand the legal space. You should have been a lawyer or have at least worked in the legal industry for many years prior to starting a company that sells to lawyers.

How can you tell lawyers if you don’t understand their needs? How can you help lawyers improve their efficiency in going to court when you have never been to a courthouse? If you don’t have a legal background, then find a business partner who is a lawyer or comes from the legal industry.

Law firms are heavily regulated

It’s also important that you understand what can be improved and what can’t be in the legal industry. Lawyers are heavily regulated, and they must follow the law society’s rules. If you design something that helpful for them, but they can’t use it, then it’s useless. Lawyers are not going to risk losing their license to use your product. Lawyers that get disbarred are publicly shammed on the law society website.

Know the law society’s rules before you start selling to lawyers. Keep in mind the rules are different (but often not much) in each state and province. Some places like Quebec and Louisiana follow a completely different legal system (based on French law) instead of British law. Most of the other provinces and states follow the same laws.

Law Firms Have Dropped The Ball

According to the Clio Legal Trends Report, 64% of law firms don’t even answer their phones when called. This makes competing against law firms easy. All you really have to do is answer your phone…

There are very few law firms that do anything creative. There are some law firms that meet clients over video conferencing. Axess Law is another creative law firm, that has office space inside of Walmart.

Most law firms just hope that any company or law firm that tries something innovative will fail. Many companies that try to beat a new path do fail, but it only takes a few to change an industry. These law firms that wait and see what happens will be out of business in the next decade. Avvo changed the legal industry in the USA, but Canada hasn’t had any game-changers yet.

Most law firms are a decade behind in technology and are just starting to look at using Facebook and Google for marketing. Perhaps next decade they will consider AI and big data. Lawyers are often the last people to adopt new technology.

Law firms need to catch up to other industries, or they will be in for a hard time over the next decade.

Legal Technology Hub Conclusion

We are working to dominate the untapped market and thrive and conquer part of the $1 trillion legal markets. Our website provides primarily legal education. We then move the “lead” to do research about lawyers using our website. The client ends up finding the right lawyer. And of course, the lawyer potentially gains a new client. If you want to learn more about legal technology companies, reach out to a few of them.

We hope you found this legal technology hub article interesting.

Author: Alistair Vigier is the CEO of ClearWay Law

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