With the recent multi-million dollar investment by Google Ventures into Rocket Matter, and the apparent success of LegalZoom, there is much discussion about the role and effect of venture capital on legal services.
There is a long list of reservations about the intersection of venture capital and legal services, and many are watching to see what develops. Consumer Reports recently reported that do-it-yourself legal forms have some problems, yet many are predicting disruptive effects upon the legal profession.
However, for those practicing Social Security disability law, venture capital is already here, and has been for several years.
Why did venture capital go first to Social Security disability law? Three reasons come to mind.
- The first is that you don't have to be a lawyer to represent claimants before the Social Security administration. I have never understood why, but that's the way it is. So a nonlawyer firm can represent clients before the SSA, and that "advocacy" firm has no worries about unauthorized practice of law, or the ethical requirements of the state bar associations.
- Social Security disability is a national program. The rules are pretty much the same around the country, with a few local variations (such as prototype states, and slightly different processes among the various ODARs). So with advertising on tv, radio, or online, it is possible for an advocacy firm to capture clients around the country.
- It can be lucrative. The often-ignored fact about Social Security disability is that the overwhelming majority of people who apply for disability benefits are, in fact, actually disabled. So even a bad firm can win 50% or more of its claims. If a company can keep its costs down (venture capital is good at that, right?), it will make money.
So that's why venture capital came: The convergence of opportunity and money.
What can we Social Security disability lawyers, who have been living with this situation for years, share with the broader legal community? Not much, really.
The big venture capital-backed advocacy firms are doing the same thing in basically the same way as smaller law firms. They are just doing it on a massive scale. Unlike the products offered by Rocket Matter and LegalZoom, these advocacy firms offer no cost savings to the client. The advocacy firm receives the exact same fee as a lawyer would.
For the disability legal community, the disruption (for lack of a better word) is on the client acquisition front. The VC-backed firms have big advertising budgets available. The challenge for boutique firms like mine, which are practicing on a retail rather than a wholesale scale, is to reach potential clients and differentiate our legal services.
This site is designed to educate those applying for disability about the disability claim process. The more knowledge and insight a claimant has, the better the likelihood that the claimant will make a good decision about representation.