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IPFS News Link • Justice and Judges

Can an On-Demand Lawyer Startup Transform the Legal Business?

• Bloomberg

John Suh is certain he can put lawyers back to work.

A perfect illustration of how he plans to do it can be found in a bland office building in Pasadena, Calif., that is headquarters to the Arroyo Law Group. You could be forgiven for confusing Arroyo, at which a group of lawyers helps small businesses navigate legal problems, for a typical law office. A closer look, though, reveals oddities. Employees arrive and leave whenever they want. In the course of a day, they take around a dozen half-hour calls from clients, many of whom they have never heard from before, and may never talk to again. 

The company, which functions more like a call center than a traditional law firm, represents the most serious challenge that the American legal industry has faced in recent history. That's because Arroyo gets all its clients from LegalZoom, at which Suh is chief executive. With its Uber-for-lawyers model, Suh hopes LegalZoom can upend the legal business.

"If the legal system only works for the 1 percent of Americans that can afford it, and 99 percent can't use the benefits, that's not a system, it's an oligarchy."

The law could use fresh energy. In the past decade, the number of working lawyers has fallen by more than 50,000. Solo practitioners, the mom-and-pop shops of jurisprudence, have been in a death spiral for even longer. Since 1988, income for stand-alone attorneys, of which there are 354,000 nationally, declined by 31 percent. In 2012, their average income was $49,000, according to tax returns. Meanwhile, the typical person (PDF) who needs legal services makes $100 less per hour than what lawyers charge, and most small businesses opt not to hire attorneys when they have legal problems, research shows.


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