Rocket Lawyer

Rocket Lawyer was founded in 2008 by Charley Moore who was an experienced law attorney. Initial start-up equity came from Moore and LexisNexis. In contrast to Shake, Rocket Lawyer is based on legal rather than technological expertise. LexisNexis provides academic legal resources amongst its content-enabled global business activities; its stake in Rocket Lawyer suggests a desire to consolidate its legal presence through a horizontal strategy.

Rocket Lawyer has an online presence and provides various subscription models with single document services costing $84 a year and premium and Accelerate services costing $39.99 and $49.99 per month. Amongst its strongest rivals is LegalZoom which was established in 2001 with funding from venture capitalists Kleiner Perkins Caufield & Byers, Polaris Venture Partners and Institutional Venture Partners (AltAssets, 2014). It garnered publicity when co-founders Brian Lee and Brian Liu convinced Robert Shapiro (O.J. Simpson’s lawyer) to both invest and act as spokesman for the company (Fisher D, 2011). It offers personal legal plans costing $9.99-11.99 per month, payable 12 months in advance and single purchases from $14.95.
Rocket Lawyer, LegalZoom, DocuSign and EchoSign were all seeking a share of the lucrative low cost, high volume legal market. To illustrate the value of this market; after acquiring EchoSign Adobe Document Services recorded an annual rate of return in excess of $100 million in 2013 (Clark P, 2013).

Rocket Lawyer’s start-up model was not strategically priced to gain market share. It is based on a focused differentiation strategy, offering single documents with a legal check facility, providing value for money. Following a successful launch, the recession altered the business dynamics. CEO Charley Moore quickly recognised the client’s unfavourable reaction to paying for every document in a difficult economic climate and switched to a $40 per month subscription service. From a strategic perspective a SWOT analysis at that time would have identified the strength of the product was the demand for the service was high, the weakness was the reluctance to pay individually for multiple documents; the threat was that clients would delay or abandon start-ups because of initial high costs in a financially unstable climate. Finally, the opportunity was to transform the client base from single user to committed member. Moore’s actions had two effects; it increased site visits by 600% over the year and turned “accidental entrepreneurs” into long-term clients (Klein K, 2009).

Stephen Fairley (12/08/2011) CEO of law marketing company Rainmaker Institute commented on Google’s investment in Rocket Lawyer and its Smart Referrals Program; an opportunity for attorney’s to avail them of a monthly or yearly local referrals service costing $90/ month or $900/ year. He observed that the company was positioned to become a market leader providing; it remained complementary rather than competitive with attorneys and it didn’t follow LegalZoom’s legally contentious, Payment Per Lead (PPL) strategy. PPL is similar to the disreputable practice of ambulance chasing. Attorneys pay non-refundable referral fees in the hopes of gaining clients (Fairley S, 2011).

Rocket Lawyer’s On Call was one of several service upgrades during 2011 that impressed Jonathan Blum (31/08/2011) when he tested the new service. However, it was the simplicity and sophistication of the forms he created that led Blum to suggest it made it unnecessary to continue “paying for the full service.” This view must be taken in context with his quandary over the legal relationship fostered by whether it is the client or company employing Rocket Lawyers attorneys (Blum J, 2011).

In a strategic marketing move, Rocket Lawyer partnered with Score, a free business advisory service in January 2012. Score’s mentoring services dated back to 1964 with 13,000 experts providing advice and workshops for approximately 375,000 businesses a year. Their website received 5 million unique visits in the preceding year. The partnership allowed Rocket Lawyer to consolidate its business model through a horizontal acquisition. Score experts would be encouraged to showcase Rocket Lawyers tools and resources and members would be granted 5 free legal forms to encourage them to use the service (Score, 2015).

In 2012 LegalZoom sought an order for summary judgement against Rocket Lawyer citing false advertising claims. In 2013 the request for summary judgment brought forward by LegalZoom was rejected, amid claims Rocket Lawyer had already taken steps to alter its advertising. The case is ongoing.

Both Rocket Lawyer and Legal Zoom sought to expand horizontally into the U.K. market in 2012. Legal Zoom partnered with Quality Solicitors an umbrella company representing 200+ independent solicitors who trade under the QS brand and provide a discounted service for LegalZoom clients. For its part Rocket Lawyer limited its expansion to 15 law firms including Stephensons a prestigious 36 partner, top 150 law firm. To bring value to its proposition, Rocket lawyer launched its Ask a Lawyer, Q&A system in October 2014. The service guarantees access to a lawyer within a day (Hyde J, 2014).

However, the U. K. business has been reliant on its U.S. parent. Its Balance sheet for the year ending 2013, show liabilities exceed assets by £1.98m and Company assets amounted to just £74,000. Following an interim review in September 2014 Director Charles Moore signalled funding would be the remit of its bankers, shareholders and future trading profits. Mark Edwards V.P. and general manager of the U.K. company, indicated the business would focus on growth of its “ customer base and revenue” following its investment (Hyde J, 2014).

Legal cases continue to challenge Rocket Lawyers business model. In 2014 Lemay v Rocket Lawyer, the defendant (R.L.) paid $175,000 in settlement of a class action for unauthorised practicing of law (U.P.L.) and violating the Missouri Merchandising Practices Act (MMPA) (Lemay settlement, 2014). Meanwhile Legal Zoom successfully defended several similar lawsuits including one in South Carolina. Its success has encouraged the firm to consider expanding its services to include full legal advice. Chas Rampenthal Legal Zoom’s general counsel stated “We need to…continue to connect consumers with services…at a price they can afford to pay” (Ambrogi R, 2014).

During an interview in 2014, Rocket Lawyer founder Charley Moore stated “the legal system is broken. It doesn’t scale to the billions of transactions the modern economy needs” subsequently adding “Law should adapt to economical and societal changes, not the other way round” (Grondin M, 2014). He then went on to praise the disruptive models of Airbnb and Uber.
Rocket Lawyer operates in a knowledge based economy using on demand principles and practices to compete with rivals; these business models benefit from scalability but are also prey to low margins and low barriers to entry. R.L. is guaranteed a level of expertise from the legal profession’s governing body and using the Boston matrix to examine its performance would suggest it was a star in its home market. However, the U.K. market is somewhat different. It is less litigious, possibly due to the social infrastructure e.g. The NHS.Market growth is presently in the low spectrum and R.L’s market share is also low suggesting it is a dog. However, the growth of zero hour contracts in the U.K. is creating a market that is barely indistinguishable from On Demand. Aligned with the cutbacks in legal aid, there is clear room for growth in a service that provides cheaper legal options.

Rocket Lawyer’s recent vertical acquisition Dealcircle provides an environment that simplifies the investment processes for angel investors and start-ups It also claims to be able to reduce the process time from months down to weeks (Wright M., 2015) This has the potential to be a major differentiator in time and savings. By continuing to expand around its core business Rocket Lawyer looks to be building a sustainable model; despite setbacks and strong competition it has developed into a market leader. Relating Porter’s five forces to Rocket Lawyer indicates little threat from alternative models; consolidating whilst the market is expanding strengthens its competitive capability’s with rivals and new entrants (Eonsoo K, 2003). Law firms are fighting for custom while clients are relying on these lower cost solutions to grant them access to legal resources; consequently, I believe this model to be sustainable.