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Stress Testing Norton Rose Fullbright-LawPath's New Online Offer

By Joel Barolsky

$909.09 plus GST for a Norton Rose Fullbright (NRF)-drafted employee agreement plus two hours with a NRF lawyer to provide advice and additional drafting. This is one of the four online packages offered in a new venture between NRF and (LawPath).


To my knowledge this is the first market offer that marries a top-end corporate law firm with SME-focused online legal service provider. Gilbert+Tobin have a stake in LegalVision but no obvious joint products. Allens have done it all by themselves with Allens Accelerate.

What's to like

From a strategy perspective, I think there's a lot to like in the NRF-LawPath new venture:

  • Accessing a new market. For NRF the new service allows them to cost-effectively access new market segments (start-ups and SMEs) that would not normally be on their radar. There would be little cannibalisation of NRF's core target market of larger corporate and government enterprises.
  • Acorns to oak trees. Fast-growing emerging companies offer significant growth potential.  Imagine getting in on the ground floor with
  • Lead generation. Some customers of the online package will soon realise that they have much more complex issues than first contemplated. NRF will be in the box seat to advise on these matters and upsell traditional legal services.
  • Brand augmentation. For LawPath, partnering with NRF adds significant credibility for an young online business. For NRF, I think it's net positive from the brand perspective in that it projects NRF as an agile and contemporary firm. A less-persuasive counter view is that this venture takes NRF downmarket.
  • Experimentation. One of the keys to remake professional services firms is to to experiment more often, and to learn from both successes and failures. There is little doubt that the digital economy is embracing every aspect of society. Active experimentation by a law firm in this space is a good thing in my view. Deloitte Australia's journey over the past decade clearly points to the benefit of "try it rather than prove it" and a "fail fast and fail cheap" strategy.
  • Speed.  One option for NRF was to develop and launch its own online channel to market. Partnering with an established online service provider with a strong installed base of clients and a proven delivery system has facilitated a fast response and a range of first-mover benefits. While law firms like NRF are famous for their technical legal smarts, online retailing and branding is not a traditional core capability.
  • Cash friendly. Tyre-kickers are one of the biggest downsides of servicing start-ups and SMEs. Having clients pay cash upfront filters the real customers from the phantoms. It also reduces collections costs and improves cash flow.
  • Capacity filler. The nature of the online service offered is attractive in that its lawyer agnostic (the client is not requesting service from a specific person) and has some flexibility. The actual work can be done by any suitably-qualified NRF person in any NRF Australian office within a reasonable time expectation.
  • Low exit barriers. If this NRF-LawPath venture fails, there's unlikely to be many problems in finalising all current matters and closing down the relevant sections of  Any reputational damage can be contained.
  • Super margins. I'm guessing, but I bet around one-quarter of those that download the document templates don't actually take up the advisory aspect of the package. While there are some risks, the marginal cost of a download is $0.00 and so these "lazy" clients will deliver super margins.

Question marks

While there's a lot to like, there are some questions worth asking:

  • Make any money? Most of the costs of delivering this online service are fixed sunk costs and therefore one could claim that the marginal costs are very low, and therefore profits very high. If, however, one adopted an activity-based costing approach there would not be a huge surplus out of the $909.09 for the two parties to split*. Costs would include direct lawyer labour and on-costs, work allocation/triage costs, customer sales, hosting and servicing costs, insurance, advertising and credit card fees. If one then factored in apportioning software, website and legal IP development costs, there would be even less to share.
  • A genuine relationship? The argument that the new offer allows NRF to get in early and grow with future industry leaders is mitigated by a model that limits contact time, restricts personal engagement and is lawyer agnostic. One could counter-argue that the intent is to develop the relationship with the firm brand (similar to the strategy adopted by plaintiff law firms ) and this should provide some stickiness as the customer grows.  Personally I think it takes more than a template and a two-hour document review to develop a trusting relationship.
  • Price point? One of the new online packages prices a 5+ year NRF lawyer at $318.18 per hour + GST. This potentially sets a new frame of reference for both existing NRF clients and new clients. I'm not privy to NRF's current rack rates but I'd imagine these price levels are significantly discounted, especially for smaller, non-institutional clients. Partitioning this pricing and the service offer from the core client base will become increasingly difficult for NRF.
  • Quality risk? If NRF allows their most junior lawyers to do all the review and advisory work then it potentially adds a significant quality and professional negligence risk. Having more senior lawyers supervise the work adds cost and compromises the business model. Balancing risk and cost will be an interesting challenge for NRF.
  • Impact on LawPath's network? As I understand it, LawPath currently has a network of 600+ lawyers that it sub-contracts to review draft documents and provide advice. Many of these are sole practitioners and work in suburban or regional firms. The price point for these lawyers is generally much lower than the NRF-reviewed services. This price differential potentially undermines the credibility of LawPath's established lawyer network and potentially creates confusion as to who is providing what service.
  • Staff engagement?  I'd imagine that NRF promises all its new uber-smart recruits the opportunity to do great work for great clients. I'm not 100% sure junior lawyers would jump with glee if their days were filled with reviewing standard documents for corner store milk bars.  It may be a good learning opportunity for a few weeks, but the novelty will mostly likely wear off quite quickly.

On balance

On balance I think NRF and LawPath should be congratulated for their enterprise. Most traditional law firms would look at the questions/cons listed above and run a mile. I look forward to tracking their progress over the next few years.