DLA Piper Joins 'Freemium' Strategy to Win Startup Clients
The global legal giant is now among a throng of law firms offering free legal documents for startups, joining a broader trend of using document automation tools to attract clients.
November 28, 2017 at 04:06 PM
3 minute read
DLA Piper is joining the throng of law firms that have turned to document automation technology in an effort to better match the economics of a firm with cash-poor, startup companies.
The global legal giant has launched free online interview tools that will let U.S. startup companies generate documents such as articles of incorporation, an employee offer letter, various nondisclosure agreements, stock purchase agreements and others. Within five years, DLA Piper hopes to make available interviews that will generate legal documents for startups in all major jurisdictions.
The DLA Piper program, branded “Accelerate,” joins others that give away legal documents online including Cooley Go; WilmerHale Launch; Goodwin Procter's Founders Workbench; and Orrick, Herrington & Sutcliffe's Startup Forms Library, the latter of which debuted in 2009.
DLA Piper's program is led by Louis Lehot, co-chair of the firm's U.S. emerging growth and venture capital practice, who in 2012 advised document generator LegalZoom Inc. as it prepared to go public. (The company subsequently pulled its plans for an initial public offering, one that securities filings show would have generated $1.95 million in legal fees and expenses.)
Lehot joined DLA Piper's Silicon Valley base in 2015 from Cooley, and he previously worked at Sheppard, Mullin, Richter & Hampton; Simpson Thacher & Bartlett; and Shearman & Sterling. At DLA Piper, Lehot said his firm's strategy is aimed at solving the problem he said all law firms are now faced with: How to serve startup clients “without losing your shirt.”
“We want to deliver technology services at scale for free,” Lehot said. “If we can be the one-stop shop where they can get everything they need, then we succeed.”
Whereas drafting documents was once a bread-and-butter service for law firms, they are increasingly offering free document generation services—as part of the so-called freemium business model designed to solicit future business—as a way to hook clients for higher-paying services.
Orrick, for example, recently launched a complementary online interview tool powered by HotDocs Ltd. that lets companies “stress test” their readiness for a new European data privacy law. Akerman also launched an interview tool this year backed by Neota Logic Inc. that helps clients understand their requirements in the event of a data breach (the firm charges a subscription fee for the tool).
The strategy is usually employed as an assessment of future legal needs with the hope that the potential client using the tool will call the firm once a real problem arises. Perhaps that is why startups were the first testing ground: They will always have future legal needs. The problem is that large firms often have to discount their services or provide them for free to entrepreneurs.
“A well-formed and documented startup requires a lot of stuff, and if there are real lawyers and people providing that stuff, it's expensive,” Lehot said. “But if you can [form a startup] with a program, you'll reach more startups, help them and they will be formed more properly.”
DLA Piper and Goodwin Procter also have partnerships with Shoobx Inc., a startup that provides document assembly tools and also stores those documents in the cloud. Through those partnerships, both firms' clients are granted access to Shoobx for free.
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