Legal Bistro is an online community where consumers with legal needs are able to quickly and easily find qualified lawyers who are seeking new clients. Our service is completely free for consumers. Lawyers bid for the placement of their profile (“Bid-for-Placement”) and are only charged the amount of their bid after the consumer requests a lawyer to contact them.
The name Legal Bistro was chosen to bring together two very powerful meanings of the word Bistro. The Russian word bystro (быстро), which means "quickly" and the French word bistro (sometimes spelled bistroit) which means a small restaurant serving moderately priced meals, wines and coffees. Legal Bistro seeks to use the power of the Internet to quickly and easily present to consumers qualified lawyers all of whom have expressed an interest in their case. We believe that When Lawyers Compete for Your Business, You Win!
Legal Bistro has been designed to make consumers feel at ease throughout the entire process by protecting their anonymity. In much the same way that you would feel at ease drinking coffee and talking to your friends in a French Bistro, our objective is to eliminate as much of the stress and confusion as possible when you have a need for legal services. You will be able to review lawyers who have expressed an interest online in handling your case from the comfort of your home.
Our site does not look anything like a typical law firm website. We have chosen bright colors, icons, key words or “Tags”, animation and video to help guide you through the process of selecting the right lawyer for your case. Our approach is very similar to the methods used by Rosetta Stone to teach their clients a foreign language. After all, handling a complex legal problem can often feel as confusing to many consumers as learning to speak a foreign language.
While we may have designed our website for consumers, our paying customers are lawyers who are seeking new clients. Our goal for lawyers is to use the power of the Internet to find and convince consumers who may not have decided to hire a lawyer on their own to seek legal representation for their legal matter. Our value proposition for lawyers and law firms is to use the Legal Bistro online community to drive down the cost of acquiring a new client while at the same time providing all of the information that a lawyer needs to assess the case.
All lawyers who register on Legal Bistro will have Law Dollars credited to their Legal Bistro account simply for completing the registration process. Lawyers will be able to use these Law Dollars to bid for the placement of their profile and acquire new clients on the site. In other words, all registered lawyers on the site will have the opportunity to use the site until their Law Dollars have been exhausted. Lawyers who wish to continue using the site will be required to purchase additional Law Dollars.
We have provided several ways for lawyers to establish their online credibility on Legal Bistro. Recommendations can be easily obtained from other lawyers, business associates, clients, family and friends. According to a 3rd Quarter 2011 Global Trust in Advertising Survey conducted by Nielsen:
92% trust recommendations from people they know
70% trust consumer opinions that are posted online
Lawyers who enhance their profiles with articles and publications have nearly a three times greater chance of having their profile viewed by a consumer on the site. You will be able to upload a previously written article of publications or to write a posting for the Legal Bistro Blog. Professionally written articles on legal subjects are an excellent way of demonstrating your legal knowledge and skills to interested consumers on the site.
Our interest in developing an online marketplace for legal services dates back to 2004. At that time, the Company was known as Law Tree. Later in 2006, the name was changed to Lawflower.com and today we have chosen to brand ourselves as Legal Bistro. Since our first beginnings in 2004, the online world has changed significantly with the proliferation of social networks such as Facebook, LinkedIn and Google+. As a result, we have designed our website to reflect those changes.
Our inspiration for the site comes from what Lending Tree accomplished in the market for loans, particularly home loans and mortgages. Lending Tree used the Internet to explain in simple terms the process for obtaining a loan and brought together banks, mortgage companies and other qualified lenders to compete in the delivery of these loans. We wish to express our admiration to Lending Tree for the Company’s very significant accomplishments in transforming the online lending market.
We believe that the market for legal services exhibits many of the same characteristics that were present for loans before Lending Tree helped to reshape the market and the way that consumers apply for loans. Legal Bistro is seeking to make legal services easier to understand and more affordable through our online community.
In February of 2011, development work began for the current version of the Legal Bistro website. Legal Bistro LLC is a private Delaware Limited Liability Company that is owned and operated by a small number of serial entrepreneurs. The Company is not venture backed and is not currently seeking any outside investor capital.
The global legal services industry generated revenue in excess of $585 billion in 2010, according to MarketLine. Market growth is expected to exceed a yearly rate of 5% between 2010 and 2015 to reach almost $752 billion. There was an increase in excess of 1.5% in the number of legal professionals operating over the four-year period ending 2010 totaling over 3,285,000.
According to the American Bar Association, there were 1,128,729 resident and active attorneys in the United States in 2006 and 1,143,358 in 2007. The number of law firms in the United States is estimated to be in excess of 50,000. Approximately 70% of all attorneys who are in private practice work for law firms with ten or fewer attorneys and 76% of all law firms employ five or fewer lawyers.
The 2010 AmLaw 200 Report indicates that the Top 200 Law Firms earned $81.9 Billion in 2009 and had 110,283 lawyers employed at these firms. We estimate that the remaining 50,000 law firms throughout the United States generate approximately $110 Billion in annual revenue based on the 2002 revenue numbers1 reported by the Census Bureau after adjusting the revenue for overall increases in the Legal Services Market over the past ten years.
Legal Bistro will initially concentrate on the legal services market for the United States and Canada. Over time, we expect to offer our services in other developed countries with well structured markets for legal services such as the U.K., Germany, etc.
We tend to break down the legal services market into the following categories:
The U.S. Civil Liability or “Tort” Market
The U.S. Market for Arrests
The Under Served Market
Our Addressable Market
Tort is a French word for wrong and can best be defined as wrongful conduct by one individual that results in injury to another individual. A tort has been committed when someone has suffered injury caused by the failure of another person to exercise a required duty of care. The injured party is entitled to recover damages. The function of a tort is to provide the injured party with a remedy rather than to punish the party causing the damages. Because of the changes in the tort laws over time, the United States has the most expensive tort market in the world. There are almost 1.2 million licensed attorneys in the United States for a population of slightly more than 314 million people.
American tort law can trace its origins to early English common law, also known as case law or judge-made law. There are three major categories of torts:
Intentional Torts include assault; battery; false imprisonment; infliction of mental stress; defamation; misrepresentation; invasion of right to privacy; trespass to land and personal property; conversion; nuisance and infringement on trademarks, patents and copyrights;
Negligence Torts are the commission of a tort through negligence and result in the injury of another person. Medical malpractice, as an example, often allege a negligence on the part of a physician or hospital;
Strict Liability or Liability Without Faults are the third category of torts and include workers’ compensation and areas of product liability.
The common law goal of tort law is to efficiently deter wrong doers and to fully compensate the unjustly injured victims. The loss is calculated in court, and compensation awarded through economic and non-economic compensatory damages equal to the actual loss incurred by the individual. Unfortunately civil law has moved far beyond this goal to award punitive damages that are meant to punish, not compensate. As a result of these actions, costs have skyrocketed.
According to Tillinghast-Towers Perin, who compiles the most frequently cited study on tort costs, direct U.S. tort costs were $260 billion in 2004 or the economic equivalent of $886 per person. These same costs in 1950 were only $91 per person. U.S. tort costs are measured in the following components:
Insurance Costs broken down as follows:
Benefits paid to third parties or their attorneys alleging injury or damages caused by insured persons or companies, excluding medical malpractice;
Benefits paid to first party insureds in the form of claims handling and legal defense costs; and
Insurance company administrative costs
Self Insured Costs (excluding medical malpractice)
Medical Malpractice Costs for both insured and self insured
In the past 50 years, U.S. tort costs, as measured by Tillinghast, have risen more than 100 times. In contracts, the U.S. population has not yet doubled and the U.S. economic output has only risen by 37 times. The American civil liability system costs twice as much as that of most other industrialized nations.
Tort costs accounted for 2.2% of the nation’s gross domestic product, compared with 1.4% in 1970 and only 0.6% in 1950. Put in dollar terms, tort costs equaled $12 per U.S. citizen in 1950 and were $809 dollars in 2002. When adjusted for the growth of inflation over the period from 1950 to 2002, the comparison would be approximately $90 to $809 or a growth of nearly 900%.
The tort system is highly inefficient, returning less than 50 cents on the dollar to claimants. The actual breakdown of this return is as follows: an estimated 22 cents go to litigants for their actual (economic) losses and 24 cents to compensate for pain and suffering. Of the remaining 54 cents, 19 cents pays for claimants' lawyers, 14 cents for defense costs and 21 cents for administrative costs associated with the settlement of tort claims.
Beginning in the 1980s, in an effort to reduce litigation costs, business groups and others mounted a campaign to reform tort law. Tort law is the basis for the U.S. liability system. Most reforms have taken place on the state level and during the last decade all but a handful of states passed significant tort law reforms. However, some have been overturned by the courts.
A very large portion of the “Tort Market” can be further classified as the “Market for Unintentional Injuries”. According to the National Safety Council 2010 Injury facts Report, unintentional injuries continued to be the fifth leading cause of death, exceeded only by heart disease, cancer, stroke and chronic lower respiratory diseases. In 2007, 34.3 million people (about 1 out of every 9 Americans) sought medical attention. Approximately 27.7 million people were treated in hospital emergency departments. The following chart breaks down unintentional injuries by accident type for people who were treated in a hospital emergency room.
There are 10.6 million automobile accidents involving nearly 17 million vehicles that occur every year in the United States. As the above chart indicates, approximately 2.7 million of these involved injuries that were serious enough for the injured parties to visit a hospital emergency room.
While the number of accidents is very large, the dollars that are associated with the economic loss are enormous. Total economic loss for the United States was $701.9 billion. $145.1 billion of this number was for medical costs. The largest loss category is wage and productivity losses at $354.9 billion. The automobile loss category totaled $255.7 billion.
The following chart from the National Safety Council 2010 Injury facts Report breaks down the most significant economic costs by accident class.
According to a recent report by PRWeb, revenue for personal injury lawyers is expected to grow 1.9% annually and reach $26.7 billion over the next five years. According to the American Bar Association there are over 76,000 personal injury lawyers in the US comprised mostly of law firms with 50 or fewer lawyers.
Approximately 95% of all legal cases that are initiated in the United States are filed in state courts. Examining the Work of State Courts: Ana Analysis of 2009 State Court Case Loads is probably the most authoritative source on this subject. For the seventh consecutive year, total caseloads in state trial courts exceeded the 100 million case mark. The following chart provides a breakdown of these cases by type.
In 1989 The American Bar Association commissioned the Law School of Tulane University to conduct a comprehensive and sophisticated national survey entitled: Legal Needs and Civil Justice – a Survey of Americans – Major Findings from the Comprehensive Legal Needs Study. The purpose of the study was to adequately reflect the complexity of the legal needs and levels of intervention necessary. The study was the first large scale survey conducted in more than two decades. The survey was significant in its findings because it conducted separate analysis of the legal needs of both low and moderate income households.
Low income households were defined as those that had an annual combined income of not more than 125% of the poverty level as designated by the federal government. Moderate income households were defined as annual income levels above the 125% poverty threshold but below $60,000. The survey showed that 48% of the low income group had at least one legal need annually and that more than 50% of those requiring legal services had more than one need in that given year. For the moderate income group, 52% required legal services and more than 50% of the group requiring legal services had more than one need in that given year.
Even more astounding, was the percentage of each group that elected to either take no action or handle the situation themselves. Forty-one (41%) of the low income group elected to handle the situation themselves without the advice of a lawyer and another 38% took no action at all. In other words, 79% of all the legal needs of the low income group were either not serviced or poorly serviced. While the numbers were slightly lower for the moderate income group, 42% handled things on their own and another 26% took no action at all.
The survey results raised two very important issues:
Why are people not receiving legal help when they may benefit from it? (Is it because they are unaware of their legal rights or worry about the cost of representation? Are they resigned to some adversity? Do they face administrative obstacles or some kind of barrier? Do they want to avoid strife? Or, are they unaware of legal help that may be available?)
Are there certain kinds of problems that can be resolved adequately without the help of a lawyer or other part of the system of justice?
The study’s findings sounded an alarm that our civil justice system is fundamentally disconnected from the lives of millions of Americans. A follow-up study was completed in 1996 entitled: Agenda for Access: The American People and Civil Justice – Final Report on the Implications of the Comprehensive Legal Needs Study. This final report suggests methods by which our justice system can both use existing resources more effectively and be simplified to improve access, while at the same time acknowledging that additional resources will be required.
The following are some of the conclusions of the follow-on study:
The most often cited reasons for staying away from the justice are doubts that it would help, concerns about cost, a sense that the problem was not serious enough and a desire to handle matters on their own.
Substantial portions of the low and moderate income households need legal help and are not getting it. Over the past 20 years, the percentage of overall legal services being provided to individuals and households has declined compared to the total legal services that are being provided by the civil justice system.
The kinds of legal problems being reported by low and moderate income households are more alike than different and represent bread and butter type issues that come up in everyday life. The most common matters being reported are the following:
Personal Financial & Consumer problems
Housing and Property issues
Even with their combined efforts, the private bar and the publicly-funded legal services programs now serve only a small portion of legal needs reported by low income households.
Even more significant than the findings of the survey are the eleven steps that have been recommended to make the civil justice system more responsive to the general public. We believe that the launch of the Legal Bistro website will directly impact many of the following steps that have been recommended:
Increase the flexibility of the civil justice system, thereby expanding the options available to people seeking help with a legal problem.
Develop better ways for people to obtain information about their options when facing a legal situation. Ensure that people are able to get referrals to appropriate legal resources.
Make the practice of personal services law more attractive within the legal profession.
Increase pro bono services by the private bar to low income individuals and households.
Increase the availability of affordable legal services to less affluent moderate-income individuals and households.
Affirm the crucial role of public funding for legal services that provide access to justice for low income persons.
Encourage legal services programs serving low income persons to retain as much flexibility as possible in deciding which cases to accept.
Expand the tracking and dissemination of information about innovations in the delivery of legal services.
Evaluate programs that may be strong candidates for adoption by others.
Draw on the experience with the Comprehensive Legal Needs Study to improve the methodology of legal needs surveys and identify important topics for further study.
The American Bar Association should take concrete steps to implement this Agenda and work in concert with others outside of the Association to improve access to justice.
At the time that the original study was commissioned, the Internet had not become a widely accepted means of distributing consumer information nor, was it widely available to the average consumer. One could even argue that at the time of the follow-up study in 1996, the Internet had still not yet been widely adopted by the general public. With over 700 million worldwide Internet users, it would be very difficult to make that same argument today.
2 Insurance Information institute February 2004 Research Report: Liability & Tort Reform
According to the Law Marketing Channel in 2008, more than four million consumers and small business currently search for legal services via the Internet every month. The Pew Internet & American Life Project has forecasted that these numbers would rise to more than 7 million and that the legal services market will reach $82.5 billion by 2008.
Lawyer offices (defined as the primary component of NAICS code 5411) generated $170.8 billion in 2002 revenue3, according to the U.S. Census Bureau. In an industry where profits per partner routinely exceed $1 million for top tier firms, according to The American Lawyer published by ALM Properties, Inc., the law is big business. While it may be hard to imagine, U.S. residents filed over 100 million new lawsuits in state courts in the year 2003 alone, according to the National Center for State Courts (NCSC).
The 2010 AmLaw 200 Report indicates that the Top 200 Law Firms earned $81.9 Billion in 2009 and had 110,283 lawyers employed at these firms. We estimate that the remaining 50,000 law firms throughout the United States generate approximately $110 Billion in annual revenue based on the 2002 revenue numbers reported by the Census Bureau after adjusting the revenue for overall increases in the Legal Services Market over the past ten years.
While there is no definitive report for marketing dollars spent by law firms, estimates range from 3% to 5% of gross revenues. Based on the above numbers, we estimate that the addressable market for Legal Services Marketing dollars spent by law firms is $5.8 billion (3% of gross revenue) and $9.6 billion at 5%.
It should be no surprise that each and every year a greater percent of marketing dollars are spent in online advertising on the Internet. In 2011, Google earned approximately $36.5 billion in Total Advertising Revenue up from $28.2 in 2010. According to a report by eMarketer, online advertising is expected to generate $39.5 billion in sales this year — a 23.3% increase from 2011 — compared to a sum of $33.8 billion on print.
That’s impressive growth, especially since 2011 also witnessed a 23% jump in online ad spending, according to eMarketer’s calculations. Online ad revenues should continue to grow over the next half-decade. Total online ad investment is projected to hit $62 billion by that time.
While the legal services community was previously slower than other industries in spending money in online advertising, that is no longer true. Avvo and LexBlog recently partnered to publish their first annual review of the legal marketing industry. The survey entitled: 2012 Legal Marketing Survey Report, incorporated responses from more than 1,300 attorneys and legal marketers.
The following are some of the highlights of the survey:
While an increasing number of law firms are spending more money online to drive visitors to their websites, very few appear to be concentrating their efforts on converting these leads into paying clients. Conversion rate statistics are not easy to come by and definitions of what constitutes a conversion vary. Google considers its job done and its advertising customers happy when an ad placed on Google is clicked through and the visitor arrives on the Home Page of the Google Advertiser’s website. Many Internet Marketing firms define a successful conversion when the website visitor completes a Contact Form on the target website.
Our definition of a converted lead-to-subscriber is when a customer browsing a website of clicking through an advertisement becomes a paying customer. While actual conversion rates vary significantly, a typical online business can expect to see its conversions rates range from 1% to 2% of the visitors who come to the site. Anything above 2% would be considered to be a very good conversion rate.
We believe that many law firm websites are experiencing actual lead-to-subscriber conversion rates that are lower than the typical 1% to 2% of other industries for the following reasons:
Many consumers are intimidated by the process of acquiring legal services as evidenced by the American Bar Association commissioned study and therefore; fail to complete a Contact Form when visiting a law firm website
Many law firm websites have are not very user friendly. They use dark colors, legal images and are written with difficuylyt
Research reports have shown that web properties that are topic specific have much higher conversion rates than those sites that are more general in nature.
Given the growth in annual ad revenue for Google, we would conclude that