Last week featured an attempt at a visual treatment of the trend of billing rates for corporate legal services. We even offered up a Legal Pyramid (in PDF format, to boot).
While catching up on non-legal reading over the weekend, something really caught my eye. It was the direction of pricing for digital goods, such as e-books or music/video. Just like law firm rates, that trend was down. Down as in many are priced at 99 cents. Some think that isn’t the endpoint, that a high percentage of these goods will be offered no cost in the not-too-distant future. Yes, free. As in beer.
So I started thinking about what this might mean for lawyers and law firms. To me, the crux of the analysis comes down to a distinction between “legal services” and “the law.” The pricing for legal services will be under pressure from the forces outlined in the Legal Pyramid series. The pricing for the law, as in questions about “what is the law on X?” or “what is the citation for the point of law Y?” will be even more profound:
I think that the price for “the law” is heading to zero.
The basic point is that most of “the law” is information in the public domain. Heck, we learned in the first semester of law school that “ignorance of the law is no excuse!” Given this (largely) free public good, plus search that is usually quite good, the only item left is the cost of packaging and delivery. These days, the transfer cost of digital information nearly zero.
So by my back-of-the-envelope math, “the law” has little or no intrinsic value. It’s all how it is applied, how you bundle advice and counsel with “the law” to arrive at something we would recognize as “legal services.”
(I leave for another day what this means for the viability of some products offered by online legal publishers.)
Tomorrow I will describe how a “free law” model could work for some large law firms. It might even be a strategy that could enhance profitability.
This continues my practice of offering free advice to law firms too cheap to pay for it.
Or is it that this “legal good” is also heading towards a price of zero?
