So I started legal tech myself and am familiar with Upcounsel.
They struggled to build a sustainable network effect in their marketplace due to regulation (split fee is prohibited) and business model. Regulation deterred lots of lawyer to join in fear of losing their licence (despite the fact they already had a significant number) and thus increasing CAC of acquiring supply.
Second, legal service are very punctual (dont need them often) which mean its a low frquency purchase which again increase CAC.
Competion with traditional law firm on top of it didnt help. In marketplace you need absolutely a community that fuel word of mouth and network effect but in this case lawyer just couldnt rally as much as they wanted (regulation).
good idea, good founders, good product (yes there was some bad reviews but nothing out of the ordinary for an online marketplace/or any business) but in the end, business model didnt work. Avvo had similar issue and closed one of their product. Looking forward to their next startup.
They struggled to build a sustainable network effect in their marketplace due to regulation (split fee is prohibited) and business model. Regulation deterred lots of lawyer to join in fear of losing their licence (despite the fact they already had a significant number) and thus increasing CAC of acquiring supply.
Second, legal service are very punctual (dont need them often) which mean its a low frquency purchase which again increase CAC.
Competion with traditional law firm on top of it didnt help. In marketplace you need absolutely a community that fuel word of mouth and network effect but in this case lawyer just couldnt rally as much as they wanted (regulation).
good idea, good founders, good product (yes there was some bad reviews but nothing out of the ordinary for an online marketplace/or any business) but in the end, business model didnt work. Avvo had similar issue and closed one of their product. Looking forward to their next startup.