The quarterly publication of the International Legal Technology Association
Issue link: https://epubs.iltanet.org/i/34686
BEST I PRACTICES freemium fre me m -noun 1. a neologism combining the words and concepts of “free” and “premium.” 2. a viable business model for the practice of law? n 2009, Wired magazine’s Chris Anderson wrote a book called Free that looked at the growing Internet phenomenon of successful businesses based on giving away for free what traditionally were their core products and services, and then making money in a variety of other ways. The book’s subtitle, “How Today’s Smartest Businesses Profit by Giving Something for Nothing,” truly encapsulates the book’s premise. Anderson tells a story about Monty Python deciding not to sue the thousands of people who began putting video clips from their shows and movies on YouTube in its early years. Instead, the British comedy troupe created its own YouTube channel and made high-quality video clips of most of their shows available for free. In exchange, they simply asked people to consider buying their DVDs and other products. The result: a 23,000 percent increase in DVD sales in three months. The key point: they were giving the same video content away for free. That’s the essence of “freemium,” which combines the words and concepts of “free” and “premium.” Make something available for free, use that to extend your reach and audience, and then provide options for people willing to pay for enhanced value. As Anderson points out, we have a long and varied economic history (predating the Internet) of using free to generate revenue — free samples; buy one, get one free; free with ads, but pay for the ad-free version. Anderson lists 50 business models built on “free.” My Early Experience with Freemium Several years ago, when I was in private law practice, I met with a potential new client, a technology start-up, at their 24 www.iltanet.org Peer to Peer offices. Things went well, and they wanted to hire me to prepare terms of use and a privacy policy for their website. When I submitted an estimate, the president of the company joked that lawyers probably all used the same base documents and just changed the company names, or at least we created documents with one push of a button. We laughed, but I felt the need to mention that even standard documents had nuances. I thought a lot about that, and decided if clients assume we can use technology in this way (and, technically, we can) why don’t we? The question turns out to be less about technology and more about finding a workable business model. In fact, I had first implemented a document-assembly application 20 years ago in a targeted practice setting. Freemium in Action Today Many of us in the world of legal technology have been exploring Open Source software. In the Open Source model, the software itself is available for free, but a company like Red Hat can be quite successful selling maintenance, support, consulting services and even T-shirts around the software. Open Source is a classic example of the freemium approach. And consider a “legal services provider” model. Law is certainly an information business. Is the practice of law like the music business? Like the encyclopedia business? Like the newspaper business? Or like the other fields currently challenged by Internet models, aging business approaches and innovative competitors? Lawyers often will say that clients buy documents or hours — a lawyer-centric view. Earlier in my legal career, when I did estate planning, I concluded that, at heart, clients were really buying peace of mind — assurance that their family would be taken care of after they were gone. In other