The answer, in fancy business terms, is "risk-adjusted return." In plainer terms, it's simply that the "stakes" involved in most legal issues are too small to justify paying an attorney's high [retainer + hourly rate].
This makes it irrational, therefore, to hire an attorney when the stakes of a given legal issue are low.
Jeff Bezos likes to say: "your margin is my opportunity."
What he means is that businesses who have long enjoyed thick margins and high prices should worry when Amazon starts eyeballing their market. Why? Because Amazon can and will sell stuff cheaper as a way to out-compete a given market's incumbents.
But there is a more important effect of this price-competition from Amazon: incumbents have to decide whether to begin competing with Amazon on price or instead yield some portion of the non-premium market to Amazon, without putting up a fight.
This explains why Veeto is not for everyone.
When we looked at the market for legal services, we saw incumbent providers (lawyers) charging consistently high prices at comfortably thick margins.
Taking inspiration from the "your margin is my opportunity" ethos, we wondered what the effect would be on the legal services market if someone like Veeto entered the market and began handling entire cases at prices 90% less than the average attorney's. We wondered is attorneys would suddenly start competing on price, the way that some have over the years in response to the competitive threat of "online document mills" such as LegalZoom.
But there was a key difference between what we aimed to do and what companies such as LegalZoom had already done: we wanted to serve a market that no one was serving at all. We call that market "low-value claims." No attorney was handling cases to get out of a cell phone contract or terminate a small co-working lease. Why not? The stakes in those cases were too low to justify the attorney's fees. So attorneys have always just ignored those small-ish problems.
We designed Veeto to serve that heretofore un-served market.
Basically, we looked at all of the case types that attorneys were already handling, and then we drew a line through each of those. What remained were all of the case-types lawyers were not handling, many of which legal commentators like to cite as examples of the "access to justice" problem. At first glance, many people think access-to-justice (A"2J") is about helping poor people. It's not. It's about helping most people, with most legal issues. A2J can either mean people who cannot afford to hire legal help, or it can mean the cases for which people need legal help but cannot find an attorney who will take the case at a justifiable fee. To us, the latter type was the larger issue, and that's what we set out to solve when we founded Veeto.
Having now done this for several years, we can actually report back to you with what we've seen so far--some of which has been surprising, even to us:
- Attorneys don't seem to see Veeto as a threat. They seem to recognize, in other words, that Veeto does not compete with them for the same market; instead, Veeto helps people the attorneys themselves cannot afford to help (in the sense that there is some practical basis for the high prices and thick margins attorneys charge...law school student loan debt, perhaps).
- In fact, about 25% of Veeto's clients are themselves attorneys. So, Veeto actually ended up solving an unexpected problem, which is handling the cases that trained legal professionals could handle themselves, but cannot afford to handle themselves due to the high opportunity cost of doing so (if they spend time handling a small-ish case DIY, that's time they can't be billing to their clients).
- Our clients are not poor. Most of our clients are executives, freelancers, and professional service providers (attorneys, accountants, etc.). They hire us usually because they determine that we have the requisite expertise for their given case and can take the case at a rationally justifiable price, given the limited case stakes.
So Veeto is solving a large list of "use-cases" that no other legal service is solving. But there is still some delineation between who tends to be a Veeto customer who does not, which does not depend solely on the case stakes.
The short explanation is that people who can afford to be brash and irrational don't need Veeto, but I'll still give you an example to illustrate the delineation.
This is a list:
But of what? Any guesses?
It's a sample of all of the people, places and things that Donald Trump has either sued or threatened to sue in the last couple of decades. In case you're wondering, the Eastern Pequots...over there on the right...that's a Native American tribe with less than a thousand members.
No one is safe from "the long arm of justice." If Donald Trump feels like you have wronged him, he will fight "the good fight," no matter the economics. He exemplifies someone who does not need Veeto. He can and will sue anyone he wants to sue, and neither rationality nor economics seem to matter much to him when deciding.
Why Veeto is not for everyone?
There are two types of people in the world:
- those like Donald Trump who can afford to stand up for themselves in any case, and
- everyone else, people like you and me, to whom the constraints of rational economics apply.
There are also two types of cases in the world:
People to whom rational economics apply cannot afford to pursue--or justify pursuing--justice when the stakes are below a certain dollar threshold. That threshold is about $2,500. At stakes of $2,500 or below, it's hard for you to justify hiring an attorney to solve your legal problem.
It's also hard for you to justify putting in the leg work to try doing it yourself, because, not only is your time worth something too, but if you have no legal training, you can't be confident that you would actually achieve the outcome you desire. Therefore, when the amount of money at stake in a dispute is $2,500 or less, most consumers just walk away--not Donald Trump, of course, but you and I are different than Donald Trump.
So the short-hand for who tends to use Veeto might be: not wealthy enough to be irrational, with a case of too low value to justify splurging on an attorney.
How many people are in that market that we designed Veeto to serve?
Joshua Kubicki of The Legal Transformation Institute estimates that...
- 50% of US consumers have at least one legal event per year but that only 20% of them use a lawyer.
- For the remainder, there is roughly $45 billion in untapped market potential.
- There are 23 million small businesses in the US.
- Roughly 7 million did not seek the help of a lawyer when presented with a significant legal event.
- Those that did get legal help, report that they spend on average $7600 per year. This creates an untapped market (the 7 million who avoid lawyers) equal to roughly $45bb.
Let's focus on the consumer segment for a minute. I estimate that the average US consumer household walks away from about $2,000-$3,000 every year that they are otherwise entitled to claim for some legal reason. Most people don't pay attention to how often buyer's remorse occurs in the wake of their own purchases, much less add up all of the abandoned compensation each moment of buyer's remorse signals.
I will deconstruct that $2,000-3,000 estimate a bit.
Here is just one example, and it's one with which I am extremely familiar. When we were still in beta, validating some of the core Veeto concepts, we focused on a single use-case. For three years, in fact, we focused on it. That use-case was people who wished to get out of cell phone contracts.
The average amount of money we helped people claim and win was about $650, which, by itself would account for 22%-33% of that estimate. The remaining 70%-80% consists largely of other legal events that many people might not even think of as legal events: things in the $10 to $20 range, small-ticket purchases for things like groceries and cleaning products and other mundane necessaries.
If you own a house and are thus responsible for maintaining everything in it and around it, then it becomes much easier to imagine how a given consumer household could hit $2,000-$3,000 estimate in a single year.
Veeto is not for Donald Trump.
This is not a political statement. Donald Trump just happens to be the quintessential example of someone for whom we did not design Veeto.
Veeto is for you and me. It's for my mom and my neighbor, for my best friend and my hair-dresser (for clarity, my mom is not my best friend, and she does not live next to me or cut my hair; those are each different people). It's for people who have no choice but to make rational financial decisions, people who know what the sting of financial unfairness feels like when you can't afford to pursue compensation that you know you are equitably entitled to.
Veeto is for anyone who has ever said, "it's not worth it," right before you walked away from justice.
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