Wilson Sonsini Goodrich & Rosati made more than $100,000 in sales during its first week offering subscriptions to an app that helps companies comply with California’s new privacy law, and the leader of the firm’s tech subsidiary said he expects the tool will generate “millions.”
The cloud-based app, sold by a Wilson Sonsini software development subsidiary launched in February, is an example of law firms’ nascent interest in selling subscription-style legal services via online platforms.
Delivering documents and legal advice straight to clients without a lawyer directly involved remains rare in Big Law. The new app from Wilson Sonsini tech subsidiary SixFifty allows legal departments to, among other tasks, generate documents showing compliance with the California Consumer Privacy Act with a few clicks of a mouse—at a flat price starting at $7,500.
“We very much adapted to the speed of a tech company, which is what law firms need to do,” said Douglas Clark, Wilson Sonsini’s managing partner. “And that’s what clients expect. They expect us to deploy innovation in practice.”
Kimball Parker, president of SixFifty, said he expects the app will generate millions in revenue as companies scramble to comply with the CCPA by a January 2020 deadline. The firm’s lawyers, on average, generated $1.1 million in revenue last year, according to the latest AmLaw rankings.
“This is its own business. It’s owned by Wilson Sonsini, but we’re not running it like it’s a law firm,” Parker said. “It’s not a law firm. Our biggest department will be our sales team.”
A Large Potential Market
Wilson Sonsini is best known for representing Silicon Valley startups and venture capital funds, and it took a page out of its clients’ playbook with its new CCPA offering.
The app was spurred by a huge demand from companies for compliance advice on the new law, which gives consumers more control over how companies collect and use their personal information.
The International Association of Privacy Professionals estimates that more than 500,000 companies will be required to comply. Based on Kimball’s estimates that companies would be willing to pay about $10,000 for those services, the market for CCPA-related legal services could be around $5 billion.
The firm’s lawyers likely would not be able to assist that many clients through traditional service models, Parker said.
Clark declined to provide an estimate of projected revenue but said he knows the app “is going to be successful.” The product is priced for smaller companies that would typically struggle to pay Big Law billing rates, he said.
Moves Toward Automated Advice
Large law firms have been slowly increasing their use of automated advice through technology.
Last year, Chicago-based law firm Chapman & Cutler sold to NetDocuments a software program it developed to automate the creation of final document sets for financial transactions. A catalog of law firm innovation compiled by Northwestern University Pritzker School of Law professor Dan Linna says there are 19 products marketed on Big Law websites that handle document generation.
Still, many Big Law partners resist these types of new models. Nearly 70 percent of law firm leaders say that partners resisting change efforts is the reason firms don’t do more to alter the way they deliver legal services, according to an Altman Weil survey from last month.
Linna said that most law firms struggle with investing in products like the SixFifty app in part because of a “myth” that lawyers provide higher quality advice through “bespoke” services rather than through systematized processes.
“One of the challenges is to get people to see that tools like this not only offer greater efficiency and cost certainty for clients, but they also improve the quality of the services delivered,” Linna said. “All law firms are going to need to understand how to make use of these tools.”
A La Carte Pricing
It’s also atypical that Wilson Sonsini has priced the SixFifty app on a flat-fee and a-la-carte basis. Generating basic documents required to show compliance with the privacy law starts at $7,500. A $2,000 annual fee will keep the documents up-to-date as the law around CCPA develops.
For another $5,000 a year, subscribers get access to a SixFifty-built website that furnishes requests from consumers to delete or modify their personal data. The app, hosted on Amazon’s AWS cloud service, provides training modules starting at $50 to $100 an individual. And starting at $7,500, SixFifty can build a CCPA-required “data map” that shows where and how consumers’ data is stored and shared.
Parker said those prices represent one-fifth to one-tenth of what it would cost Wilson Sonsini’s lawyers to provide the advice through traditional methods.
“We want to make it a big value proposition,” he said. “We want to say, ‘Hey listen, don’t go to another law firm to do this. You can get top law firm quality documents for a fifth of the cost.’”