MyLegalAnswers receives $1.25 million in CANARIE ebusiness fund financing

Executives at MyLegalAnswers.com, which recently announced $1.25 million in funding from CANARIE Inc., recognize that their plan to offer legal information online might be controversial in the legal community, but say the company hopes to work alongside Canada’s lawyers as a one-stop-shop for basic legal questions on the Internet. The one-and-a-half-year-old firm is building an extensive database of legal information in question-and-answer format covering a spectrum of issues from family law to the details of incorporating small- and medium-sized companies. The company is in the process of negotiating a number of co-branding deals with large financial and other institutions. It says those agreements will begin falling into place next year, and by the end of 2002, CEO/partner Michael List says it will be able to fully serve both the SME and individual layperson markets. Rather than serving consumers through the MyLegalAnswers portal, List predicts the vast majority will enter through bundled product suites and co-branded portals by the end of next year. Late last month, the company announced that it had won $1.25 million in funding from CANARIE, through the broadband funding consortium’s e-business program. The envelope of $28 million in total is available through March 2004 to fund projects that will accelerate the development of advanced e-business applications and services." Both List and CANARIE’s Stéphane Poirier Defoy emphasize the rigorous evaluation process winning projects must undergo. Defoy describes a multiple-stage evaluation by a steering committee of industry and government experts who scrutinize the business plan. While CANARIE won’t actively manage the MyLegalAnswers project, Defoy says the organization has provided the company, as it does with all projects, with a variety of tools to help it grow. He notes that the company will have to follow certain business development templates, and that CANARIE will be monitoring the project closely. Like other e-business fund projects, the $1.25 million will be paid as reimbursements on claimed eligible costs, usually to a maximum of 50 per cent. The funds are paid back as a percentage of gross revenues over a schedule determined by CANARIE and the company. MyLegalAnswers is the eighth company CANARIE has funded under the program. List says one of the hurdles the company had to overcome during the evaluation process was the potential MyLegalAnswers might have to displace traditional services provided by lawyers. The company has already built a database of 50,000 legal answers intended to help consumers save money on legal fees. While it can’t answer the most complicated questions, and users will have to consult a lawyer at some stage in the process, List says "they’re probably paying for an hour or two of a lawyer’s time versus $600-$2,000 which would represent 10-15 hours." He doesn’t apologize, however, for simplifying the legal process for laypeople. "As a practising lawyer and as a law student, I was always shocked at the number of questions I received on a daily basis from friends and family. It’s just a non-stop barrage of basic questions that I could find the answer to with half-an-hour of research. Lawyers have done a couple of things that are unfortunate, and this is just a personal opinion, but I think to a large extent lawyers as a group have priced themselves out of the range of the everyday person, and even of small businesses that don’t have the same resources that a large company has. "I’m not trying to paint ourselves as Mother Teresa figures, but I think one of the serious motivations getting into this, initially, was to offer a service at a low enough cost that it provided an alternative for the consumer." He says only a handful of practising lawyers at a convention of the Canadian Bar Association, where the company had a demonstration booth, voiced opposition. "Typically the reaction from the legal community, once they figure out what we’re trying to do, has been very positive." He adds that the Internet is changing the legal profession as it has so many other industries. "The fact is, and there’s no other way to say this other than if the lawyer’s bread and butter is the type of service that we displace, then they’ve got a problem with their practice." Currently, the company has a roster of 50 or so lawyers writing the site’s content, vetted by a full-time staff of seven. Conceding that the price of paying those lawyers for their time would be prohibitive, List says the company is providing minor equity participation in MyLegalAnswers and professional development in return for their services. He says the company can preserve the CANARIE funding and previous equity rounds for "another couple of years." List argues that the company has an advantage over competitors such as Ontario’s not-for-profit LegalLine, Alberta’s ACJNet or pre-paid legal plans can provide because the company takes a multi-jurisdictional approach to the law (Q&As do not yet cover laws in the territories). The database will be expanded, he says, as users provide feedback to the site’s writers.

MyLegalAnswers receives $1.25 million in CANARIE ebusiness fund financing

News | 12/21/2001 5:00 am EST

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