I recently wrote about Trends in Online Legal Services. One of my legal market friends offered some interesting comments that help explain why online services have so little traction.  

Here is my friend’s analysis:

“1. Law firms aren’t equipped to provide ongoing content. The internal reward system at most firms doesn’t adequately compensate the expert for his time on such pursuits over the long haul.

2. Law firm turnover is around 20% at most big firms. That means the fellow who spearheaded or maintains the content site isn’t likely to be around for long. In fact, because of point 1 he’s likely to get kicked out.

3. In-house counsel, like everyone else, are used to getting web-based content for free. To get them to pay for it would require substantial marketing outlays, which most firms are unwilling or unable to make.

4. Those firms who have tried to do this right, by hiring dedicated staffs, spinning off side businesses, incenting them to provide great content, creating content that doesn’t require constant maintenance, and marketing the results properly — e.g., Littler Mendelson’s labor training modules — have lost money on the venture, and scared others away.

5. There’s little evidence that a firm’s creation or maintenance of sites of this sort improves the likelihood that it will get premium business from top clients, so it’s not demonstrably worthwhile as a loss leader. Nonetheless, those who have already made the investment to create an online business sometimes keep it in the hope that it will yield indirect benefits.

Assuming I’m right, it’s scarcely surprising that big firms have backed off. Still, I believe there’s an opportunity for small firms, boutiques or entrepeneurs to come at this successfully with an entirely fresh business model — e.g., Greg Siskind’s development of his immigration practice via VisaLaw.com, or Milberg Weiss’s use of its website to attract plaintiffs to its class action cases.”