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SEPTEMBER 29 , 2000 VOL. 26 NO. 38 | SEARCH ASIAWEEK Law You Can Afford Getting good legal advice can leave you with nothing but fluff in your pocket. The solution may be just a click away By BELINDA RABANO How to deal with endless barking by the neighborhood dog? Or a careless driver who bent your fender? Or a boss who doesn't pay a promised bonus? Ask most Asians and you're likely to be met with a shrug and a wish for better luck next time. But people asking these questions on LegalStudio's Hong Kong website sometimes discover the law can be there to help. Unlike the U.S., where citizens fling lawsuits around like Frisbees, most Asians rarely expect the legal system to be of much help. Labyrinthine processes, the absence of a consumer-rights tradition and high-priced lawyers across the region are enough to dissuade most people with a valid gripe from pursuing their cause. Yet startup firm LegalStudio is working to change that attitude — at least in Hong Kong and Singapore — and drum up some business in the process. "Many people don't feel the law is easily accessible. We try to remove those barriers," says Milton Kiang, cofounder and president of LegalStudio. The former in-house lawyer at chipmaker Intel and New World Telephone says the internet venture is geared toward consumers and small businesses who typically aren't willing, or can't afford, to consult lawyers. "A lot of people who don't have immediate connections to law firms quite frequently just do without." On its five-month-old Hong Kong website, LegalStudio runs a free Q&A board where visitors can have their questions answered, albeit briefly. The site also sells a range of do-it-yourself kits, such as conveyancing, obtaining a divorce and setting up a new company. The webventure also hopes to make a good chunk of its revenues from site referrals to affiliated law firms. The do-it-yourself market in Hong Kong is sizable. In 1999, some 80,000 civil cases were tried in SAR courts. Of these, half the litigants represented themselves, according to LegalStudio. That's partly due to Hong Kong's dubious distinction of being home to the word's most expensive lawyers after London. Local solicitors charge between $190 and $450 an hour, which makes LegalStudio's downloadable kits and documents, priced between $6.40 and $83, look almost like giveaways. The ability of sites like LegalStudio to thrive is in doubt, however. "The market in Hong Kong is not mature enough to support their services," argues Andrew Law, a partner and head of IT Law Practice Group at Fong & Ng. LegalStudio won't disclose its figures, but says both its sites are generating revenue, with more than 1,000 registered users in Hong Kong, and, a month after launching, 300 in Singapore. Sites like LegalStudio could pose some hidden dangers for users, since they are largely unregulated. "Consumers may view this as a replacement for legal advice rather than a source of information, and may have particular legal problems arising out of their own individual situation that fail to be addressed," warns Mark Paist, a U.S. attorney with Morrison & Foerster who works with Internet startups in Hong Kong. Indeed, LegalStudio has already run into some roadblocks in Singapore, where the local Law Society tends to keep its members on a tight leash. The company has been told it is not permitted to offer free advice over its Singapore site, given restrictions on law firms' advertising. But most industry watchers agree that LegalStudio and other sites like it are a sign of the future. The legal industry, both in Hong Kong and internationally, already is under pressure to consolidate. And Hong Kong's many small law firms in particular are likely to feel the squeeze from online services, says Fong & Ng's Law. About 70% of firms in Hong Kong have less than five lawyers, most of whom practice general law. They cater primarily to small enterprises and individuals, the same group targeted by online legal websites. Even larger firms that don't compete directly with online sites have started using the Web to distribute news and legal developments to clients. "These websites are making clients more knowledgeable. That puts a real challenge on the part of the lawyer," says Law. In the U.S., the online solution has been taken one step further. One site, LegalMatch, is now conducting reverse auctions, where lawyers bid against each other for customers. Now that type of lawyer can't come soon enough for most Asians. Write to Asiaweek at mail@web.asiaweek.com
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