Last week, the annual Clio Conference was held in San Diego. Attended by approximately 2500 lawyers, technologists, and Clio customers, it has appropriately become the go-to legal tech conference. Part seminar, part marketing, and part pure celebration, it is almost everything you want a conference to be.
Clio provides cloud practice management programs mainly to small and mid-size law firms. Also, through partnerships with countless providers, it can offer a broad array of other products to customers. At its Conference, Clio releases a valuable Legal Trends Report, which looks at the practical and business trends of its law firm customers and others.
The Conference is chock full of useful information and included keynotes from such noteworthy writers and pundits as Daniel Pink, Shaka Senghor, and Glenn Greenwald. As my friend Joe Patrice wrote in Above the Law recently, “it might be fair to say that the show is about the philosophy of all legal technology and how its product fits into that…”
The Problem Is The Problem
As it does every year, Clio offered a glimpse of where it is going. Clio plans to provide even more products and services. It has a new mobile app. 35 new integrations. It also released a new law firm maturity model that will help law firms become more profitable.
Clio wants to enable its customers to provide better access to justice (A2J) to a vastly underserved population
But the most far-reaching announcement at this year’s Conference received little fanfare. Clio wants to enable its customers to provide better access to justice (A2J) to a vastly underserved population, a population that either doesn’t think a lawyer can do them any good or can’t afford one.
So what, you say. Others have tried with little success to make a dent in this problem, a problem, truth be known, most have just preached about it. Perhaps that’s because the problem is so multi-faceted: from the costs of providing service to regulations designed to protect the profession to the way people want to consume legal services to the nature of law itself (there are no easy or straightforward legal answers). And, of course, unlike health care, there is no insurance to help pay legal costs for most people. All make our A2J problem a hard one to solve.
The issue is one of product market fit: the product is legal services, the market, those with legal needs.
Clio sees the problem differently than most, however. According to its CEO, Jack Newton, the issue is one of product market fit: the product is legal services, the market, those with legal needs.
The blind trying to find the invisible
Newton sees the fit gap as an opportunity. And the numbers suggest he may be right. According to the Report, 81% of lawyers want more clients. But 77% of the population is not adequately served. The blind trying to find the invisible. The opportunity, according to Newton, is to somehow bring the product and the market together.
Newton compares the A2J problem to that which Uber and Airbnb identified and seized. Uber and Airbnb, using new ways of thinking and technology, were able to offer their services to new, underserved customers and make a considerable profit. Uber and Airbnb also put a severe dent in the business model of existing industries and improved the delivery of services to the rest of the population, a lesson lawyers might think about.
The problem is always the problem.
Defining a problem is key to solving it; a college professor told me one time: the problem is always the problem. If this is true, then Newton’s product market fit concept may be revolutionary. (Newton’s new book, The Client Centered Law Firm, which discusses these concepts, is set for release in early 2020 and can be preordered now on Amazon).
The Opportunity
Newton and Clio COO George Psiharis, who was in charge of creating this year’s Legal Trends Report, cite interesting statistics relevant to the A2J opportunity. 59% of people who hire a lawyer do so based on the referral of a family member or friend. The rest relies on the internet. 42% hired the first lawyer they contacted. What people want from lawyers is also instructive: responsiveness. A roadmap on how things will go and what to expect.
Clio hired a firm to contact 1000 law firms either by email or by phone posing as a potential client with a legal problem for which they wanted legal help. The results of this Survey show part of the intractable element of the legal service problem. Often, for example, the law firm didn’t respond at all to either phone calls or emails. And those that did? The responses were, in a word, shitty.
So those who want to hire a lawyer get either no response or a one of little value. A reply that provided no roadmap of where to go next or what to expect. A response that didn’t even answer the questions posed in the email or the call. A response that gave no cost estimate: when most of us buy a product or service, we at least want to have some idea of what it costs! This lack of responsiveness combined with the fact that a good percentage of the population hire the first lawyer they contact (who will more likely than not give a shitty response), it’s no one wonder people think lawyers will do them little good.
Referral is a nonscientific, non-evidence based decision-making process.
The problem goes beyond that, however. Those that want to hire a lawyer have no practical or reliable way to find one. Most people rely on referrals. Ask in house legal department how the naked referral system works out for complex legal problems. It doesn’t. Referral is a nonscientific, non-evidence based decision-making process.
Then there are the people who have so little exposure to the legal system they have no family member or friend to ask for a referral. (Or they have a legal problem is so different that the reference they get is irrelevant). These people turn to the internet. Have you tried that? There is no reliable information, period. Plenty of ads. Plenty of lists. But no way to determine who is good and who is terrible. No way to figure out who is knowledgeable about a matter and who isn’t. To use Newton’s term, poor (or nonexistent) product market fit.
A friend of mine recently had a significant legal problem. She went through 18 lawyers before she found one that could actually solve her problem.
A friend of mine recently had a significant legal problem. She went through 18 lawyers before she found one that not only was empathic but who, because of experience and knowledge—and the fact he was a good lawyer—could actually solve her problem. Most people would give up or hire a lawyer that probably couldn’t solve the problem. Poor product market fit. (By the way, many of those lawyers who couldn’t answer her question still tried to charge for not solving it!)
Beyond those who try to hire the right lawyer for their problem, another group concludes there’s no way they could afford a lawyer. Most of them think a lawyer wouldn’t do any good anyway. But in fact almost everyone needs competent legal help at some time during their lives, some desperately. At best the lack of legal help impedes progress, at worst, it’s devastating.
There is a massive opportunity available for lawyers…willing to embark on the necessary industry shift towards providing clients with the experiences they’re looking for.
Newton believes between the lawyers looking for clients (81%) and the underserved (77%), there is a “potential multi-billion-dollar latent market for legal services that’s currently untapped by lawyers, but that is also entirely within their reach and that a purposeful shift to a client-centered approach will get them there”. Said Newton in a Clio press release, “There is a massive opportunity available for lawyers…willing to embark on the necessary industry shift towards providing clients with the experiences they’re looking for…The opportunity for the legal industry to not only survive but to thrive, hinges on our ability to strengthen the product-market fit between lawyers and consumers of legal services…”
Product Market Fit
I talked at some length at the Conference to Psiharis about this year’s Report and Survey and why lawyers fail so miserably to be responsive. One answer, said Psiharis, is that they don’t have time–they are pulled simply in too many directions. Another reason, according to Psiharis, is that lawyers’ mindset doesn’t match expectations: lawyers genuinely think they are responsive when they aren’t.
But Psiharis also agreed too many lawyers desperate for clients try to answer questions to which they simply don’t know the answer. The first 18 lawyers my friend went to, for example. One reason for this may be that lawyers cannot effectively reach a market in which they are knowledgeable, so they frantically cast a broad net and seek business for which they are less qualified.
And then there are the underserved. How do potential clients find a lawyer that is a good fit for their problem and them? Psiharis had an idea: what if we had more robust online reviews? I immediately thought of Amazon’s announcement last week it is offering a group of lawyers to do trademark and IP work. A vital component of this service will be online reviews. (Yes, there are problems with online reviews. But the more you have, the better picture you get. Plus, let’s not let perfection be the enemy of the good or even the better).
I came away from the Conference, thinking not that Clio had figured it all out, but that it was trying hard to do so.
I came away from the Conference, thinking not that Clio had figured it all out, but that it was trying hard to do so.
What’s Next?
What can Clio do that others haven’t? First, Clio is using data to define and analyze the problem instead of speculating. And Clio, due to the number and nature of its customers, and the expensive survey it was willing to undertake, now has a lot of data.
Second, Clio sees A2J as an opportunity, not just a philanthropic undertaking. The fact Clio sees A2J as a business opportunity is refreshing and may lead to solutions.
Clio was formed ten years based on the idea it could create and sell cloud based practice management tools. Most people thought the concept would never work. Today, Clio has 150,000 customers spanning 90 countries and the blessing of over 65 bar associations and law societies globally. In September, Clio received $250 million in venture capital funding to do things like pursue the product market fit project. This is one of the most substantial legal technology investments and the largest ever for a Canadian company.
Stay tuned. I’m not betting against Clio.