Last week, the legal tech community was rocked to learn that the lawyer rating service, Avvo, had been acquired by something called Internet Brands. Internet Brands is in turn owned by the private investment powerhouse KKR.
Avvo has always been a lightning rod and represents what many would say is both wrong and right with the new realities of the law profession-depending of course on your perspective. Avvo has represented the “young, scrappy and hungry” legal innovator startup which challenged the way we did and thought about things. It offered a legal rating service and then recently branched out into offering a fixed fee limited scope legal service program and a do it yourself offering for legal forms. online legal directory, marketplace and reviews site.
So, imagine the surprise when we heard that Avvo was being acquired by a company that also owns of all things, Martindale Hubbell, the staid, traditional legal resource for information about firms, mainly large ones. And while on the face of it Martindale does provide a rating service of lawyers, the rating bands are broad and non-controversial. It’s like your father’s exclusive private club has now allowed a radical leftist to not only join but to move in.
Imagine the surprise when we heard that Avvo was being acquired by a company that also owns of all things, Martindale Hubbell, the staid, traditional legal resource for information about firms, mainly large ones
How all this will shake out remains to be seen. And since the legal tech community is pretty close knit and we all know each other well, it’s hard not to rejoice at the success of Mark Britton, Avvo’s co- founder and his team in bringing along Avvo to this point and making it so sought after and valuable.
But there are concerns. The Avvo acquisition joins a line of recent acquisitions by tried and true, traditional players in the legal tech arena of new and more innovative companies trying to move the needle and change things. Ravel Law was acquired by Goliath LexisNexis in 2017, LexisNexis also acquired Intelligize in 2016 and Lex Machine in 2015. Advanced eDiscovery acquired Altep Inc. in 2017, Tyler Technologies acquired Modira in 2017, iManage acquired RAVN in 2017, Thomson Reuters acquired Practical Law Company in 2013, Deloitte and Kira announce an “alliance” for machine learning in 2016.
So, what’s the big deal? Many of the acquiring companies are long time service providers of big law and the traditional legal profession. While certainly these companies are not likely to turn down the chance to earn a buck, I worry how much innovation and disruption of their tried and true customers the acquiring companies will permit. Unlike other industries where there are mega companies who started as innovators and disrupters and have that spirit (think Google and Apple), will the legal tech acquirers foster the same?
How much innovation and disruption of their tried and true customers the acquiring companies will permit?
Another question is whether there will be a cultural clash between a company like Avvo, which grew out of a startup mentality and its new, perhaps more traditional acquirer. In 2017, Wal-Mart, the primarily brick and mortar retail giant, acquired Jet, an e-commerce start up. Jet was a typical Silicon Valley company with nontraditional work policies at least in Wal-Mart’e eyes. The result: no one was happy and the acquisition not what everyone hoped. Here’s a link to a good article about the clash. At the very least, the risk of distraction and dissatisfaction that ultimately impacts the product and sales is high.
And what’s next? Will Clio be the next to go? Ross? LegalZoom? Legal tech is difficult market. The upside is limited. The customers are difficult to sell to. The big players have made their money being traditionalists, rocking the boat gently if at all. And many cater to big law not small firms and solos, not to those in need of and who can’t afford access to justice. And the things that Avvo must have valued, the freedom to make decisions and pivot when necessary, to challenge and do new things, to disrupt could be constrained now that it is owned by a group of companies that end up at the altar of KKR, an entity who cares about turning a profit irrespective of any business or professional interests.
So while we should all take a moment to toast Avvo’s success, we should also bemoan just a bit the fact that an independent legal disrupter is no longer with us
So while we should all take a moment to toast Avvo’s success, we should also bemoan just a bit the fact that an independent legal disrupter is no longer with us. Whether and how much that absence is impactful remains to be seen.