Linkilaw Buys LawyerFair: Growing The Legal Marketplace
How Linkilaw’s Acquisition of LawyerFair Has Created One of UK’s Biggest Legal Marketplaces – Giving More Startups the Opportunity to Scale Up.
Reid Hoffman, co-founder of Linkedin noted that ‘first mover advantage’ is not necessarily dependent on launch, but on ability to scale and grow.
This is relevant to business at large, but also bears significance to the Legal Industry at this pivotal point in its history.
Although the legal sector has proven difficult to disrupt, the next few years are looking to be very exciting for its future – to the benefit of entrepreneurs in particular.
In 2016, 5.5 million businesses operated in the United Kingdom – and the vast majority of them were classified as small-to-medium sized enterprises (SMEs). SMEs are responsible for 47% of the UK private sector turnover and employ the majority of the private sector workforce.
As new businesses across the United Kingdom are created, unfortunately so are legal disputes. In May 2017, YouGov reported that UK SMEs suffer with 8 legal issues per year and are collectively losing £7 million an hour as a result of neglecting their legal obligations.
The legal disputes that many businesses, in particular startups, face are largely avoidable – and are proving expensive not only for the founders of these failed companies but also for the economy.
Besides legal issues having a direct impact on the deaths of businesses, owner’s’ lack of legal acumen has been seen to discourage investment into their businesses. When more than half of startups looking for loans are rejected by conventional funding sources, the inclusion of legal preparations could prove decisive in a startup’s ability to find funding externally, as the odds are already stacked against them.
The Legal Industry needs to innovate not only to support entrepreneurship, but for its own benefit too.
Public trust in lawyers has been reported to be as low as 42% in recent years, and in at least 30% of cases where a respondent did not consider using a solicitor. Whilst Legal Executive Institute reports that the Legal Industry (contrary to the increase in business creation and commercial legal disputes) actually loses $66,672 (£51,860) per lawyer per year due to a decrease in productivity.
Many components affect public trust of legal sector and productivity of lawyers, but process definitely has an impact – and unfortunately, the Legal Industry is rife with archaic processes which include unnecessary inefficiencies and bureaucracy. This increases the time that legal professionals spend working on a case and ultimately causing a domino effect and subsequent increase in the cost that a startup founder spends on legal protections.
Disruption in the Legal Industry in this climate has stopped being an option and has become a necessity as research from YouGov has shown that 77% of those surveyed stated that price of legal fees influences where they look for legal services. This was the second largest factor, as expertise influenced the decision of 85% of respondents.
Fortunately, more and more options for these entrepreneurs are finding their way into the mainstream as disruptive companies such as Linkilaw, a legal platform dedicated to supporting startups in finding specialised legal advice, are taking a lead in the legal marketplace space.
With the marketplace model, the relationship between a client and a lawyer can see major improvements due to:
- The savings of time seen as a result of the client’s’ legal queries and its developments kept in centralised locations online.
- The reductions in legal costs as a consequence of fixed fees generated by lawyers competing for the cases they are most qualified or more interested to work on. Typically Linkilaw saves startups over 70% of the standard fees they would normally pay.
- A strengthened trust in the lawyer as they were ultimately chosen by the client on the basis of expertise, personality and cost.
Linkilaw, founded in 2015, began as ‘The Legal Marketplace’; a unique model that worked by ‘linking’ clients to the most suitable legal professionals for a case. The marketplace proved successful – creating a network of hundreds of experienced lawyers which were eager to work on a variety of cases in a variety of fields whilst escaping the traditional constraints that come with working in a law firm.
Since 2016, Linkilaw has expanded its marketplace, and has become ‘The Legal Platform for Startups’ – becoming the one-stop-shop for startups looking for legal advice and legal services. By combining the marketplace with an legal in-house team specialised to work on the needs of startups in the United Kingdom, the company has provided many hundreds of emerging companies with lawyers, legal documents and even free consultations.
Alexandra Isenegger, CEO of Linkilaw, states:
“Many bootstrapped startups have suffered with the injustice of either paying thousands of pounds on legal fees, searching the internet for irrelevant templates or simply foregoing legal work altogether. This leaves founders unable to understand the legal obligations they have to their business and is putting the potential of great ideas in jeopardy.”
To further consolidate its position and growth in this rapidly expanding UK Legal Tech market in the UK, Linkilaw saw an opportunity to further corner the legal marketplace market with its acquisition of LawyerFair, a leading legal marketplace for companies.
“We’re excited to have had the success we’ve had. We were the first UK marketplace for commercial legal services, finalists in the Pitch National Business Competition in 2015/2016 and one of the Mass Challenge UK Cohort. We’re proud to have scaled successfully and now to have sold to the ever expanding Linkilaw. I’m excited to be working alongside them as the team and business continues to grow” says Andrew Weaver, CEO of Lawyerfair.
“LawyerFair’s mission coincides with ours and CEO Andrew Weaver and the Lawyerfair team have done a fantastic job at implementing and bringing such a disruptive idea into the legal market. We are excited by this acquisition and for the next steps we face in the legal industry: in-depth innovation.”
The acquisition of LawyerFair has led to the creation of one of the United Kingdom’s legal marketplaces – and the team is committed to further developing the company in a way that will support a startup’s journey when scaling up.
Promising companies struggle to grow domestically and expand internationally and are taken over by larger – often foreign – firms at a significant discount to their potential.
Of the businesses that were created in 2009, only 4.1% grew to have £1m turnover in the three years.
Although the UK economy is growing faster than many other nations and is the birthplace of many successful businesses, recent data shows that it lags behind the US and other leading economies in the extent to which its companies scale. This difference has been labelled by many experts, such as Sherry Coutu, as the ‘scale-up gap’.
“Although fun and incredibly enriching, scaling my business has proven to be incredibly challenging. Luckily, I’ve learnt from the best mentors, partners and friends and from my personal experience there is no doubt in my mind that the right piece of advice at the right time makes the difference between fight or flight of a scale-up. I want startups to be giving the support that I was fortunate to receive in the early stages of my business and I’m dedicated to making that happen.” states Isenegger.
Scaling companies drive economic growth, job creation, and productivity in the longer term. With this, entrepreneurially-friendly innovations in the UK’s Legal Industry have the potential to support UK SMEs in their bid to innovate on national and international scales – leading to a lengthening in the lifespan of startup and scaleup businesses.
According to research conducted by RBS, by closing up the scale-up gap, The United Kingdom could see the creation of 238,000 jobs and an additional £38 billion of turnover within the next three years.
For entrepreneurs, things may be looking up if projections in the legal market prove to be true.
At the moment, Deloitte report that 77% of law firms surveyed do not use technology for in-house legal tasks – but in 5 years times, of the same cohort, 52% will be using technology in their in-house tasks.
If this proves to be true, this could save many bootstrapped startups a lot of money on their legal fees in the future.
Although a lawyer’s expertise is essential in the vast majority of legal transactions, technological innovation within the legal sphere will result in streamlined legal processes – making a lawyer’s job smoother, simpler and faster. This also benefits the consumer – reducing the cost of legal services for businesses without shrinking lawyers’ profit margins.