Amazon (AMZN) founder Jeff Bezos was thinking big from the start. He named the company Amazon because “it’s not only the largest river in the world, it’s many times larger than the next biggest river. It blows all other rivers away.”
Amazon has become the corporate conquistador. Its acute customer-centricity, platform, data mastery, agility, employee up-skilling investment, patience, and warp-speed ability to scale have contributed to its unique status as a serial disruptor. Amazon’s e-commerce dominance—everything from books to toys— has positioned it not only to take aim across retail verticals but also to vie for dominance in other sectors and even entire countries.
Amazon’s rapacious growth and long, malleable tentacles make virtually any company, industry, or economy a potential target. Amazon does not compete as traditional competitors do. It reimagines existing business models from the customer perspective. Jeff Bezos summed it up concisely: “If you are competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.”
Customers have long been Amazon’s central focus. The company is also legendary for measuring everything and applying data in a variety of ways. Amazon deploys teams of artificial intelligence engineers and embeds them throughout its business units, regions, teams and warehouses. They use data to drive faster, more accurate opportunity creation and to analyze what customers want now and what they will want next.
Amazon also makes the customer experience easy, accessible, transparent, and pleasing. Even in the pandemic, its ability to fulfill a tsunami of online purchases is testament to its logistical prowess and relentless effort to exceed customer expectations.
The question is not whether Amazon will continue its expansion into new sectors but which ones and when.
Will Amazon Enter The Legal Industry?
Spoiler alert: it already has. Amazon has quietly dipped its toe into the legal pond. Bob Ambrogi reported in October 2019 on Amazon’s launch of IP Accelerator. The initiative is a curated network of IP law firms that provide trademark registration services at pre-negotiated rates. The website touts that “IP Accelerator helps businesses more quickly obtain intellectual property (IP) rights and brand protection in Amazon’s stores.” It targets small- and mid-sized businesses (SME’s)—an enormous, underserved market segment, making it easier and more cost-effective for them to protect their ideas.
Is this a one-off or a harbinger of Amazon’s full-blown entry into the legal industry?The company’s approach to what it calls “high potential ideas” is instructive. Amazon has three criteria that must be satisfied to pursue ideas: (1) an original approach that does not mimic existing models; (2) scalability; and (3) potential for significant return on investment. The trillion-dollar global legal industry ticks all three of the Amazon criteria. Law is a fragmented, inefficient industry dominated by legacy models—partnership model law firms as well as many corporate legal departments that continue to operate like firms.
Jeff Bezos famously said, “Your margin is my opportunity.” It’s unlikely he was referring specifically to law, but he could have been. Law’s gaudy margins are ripe for a competitive marketplace that would reduce cost, drive efficiency, enable legal buyers to make more informed decisions, and better serve the unmet needs of corporate and retail buyers alike. Amazon’s ability to harness data in an industry that sits on a gold mine of it; its customer-centricity; ability to scale and enhance customer experience; and unparalleled agility would forever transform the legal industry.
Legal Buyers Are Ready For Amazon Even If Providers Are Not
The uptick of institutional investment in the legal industry and the strong growth of new-model legal service providers—particularly a cadre of elite legal service providers—evidences an enormous, pent-up appetite for new models among corporate legal consumers. They seek multidisciplinary expertise; “safe hands” to deliver data-backed solutions at scale and at the speed of business. Amazon could rapidly assemble a curated network of law firms, law companies, technology providers, consultancies, and other networks in the legal industry. It could also create a data-enriched marketplace for legal buyers to connect directly with various types of practice and business of law talent. This would put stress on non-differentiated providers and create pressure on their legacy models.
The legal press focuses on the corporate legal sector because that’s where the big money is. There is also an enormous, untapped opportunity to expand law’s customer base and also address its shameful access to justice crisis. Amazon’s entry could rapidly attract millions of new legal services buyers into the marketplace by providing a competitive, accessible, transparent, data-rich environment. Consumers presently priced out of the market could easily access a wide array of attorneys, allied legal professionals, service providers, information, self-help tools, products, bots, and other resources. They could better understand when and at what (competitive) price a licensed attorney is required and when other options might be sufficient. Not all “legal” problems require a lawyer. A platform offering this broad array of information and choice—coupled with data-backed profiles and consumer ratings—would create a more accessible, transparent, cost-effective, competitive, and customer-friendly legal marketplace.
Amazon Could Disrupt Law Without Engaging In Practice
Amazon need not engage in the practice of law to disrupt the legal industry. It can deploy its platform, data and AI mastery, customer-centricity, and capital to create a global legal marketplace that is a hub for legal providers and consumers. This is precisely what it has done in other sectors where it has three types of “customers.” They include: seller customers, buyers, and developers. Amazon would not engage in the practice of law (unless it elected to create captives). It would, however, provide a new ecosystem for legal products, services, supply chains, new models, talent, education and training.
Amazon would not compete with incumbents in the traditional sense. Its marketplace would, however, challenge the efficacy of their models. Not only would “buyer customers” have greater visibility into marketplace options, but they would also have a wealth of relevant data upon which to base buy/sell decisions. This would eliminate the industry’s current landscape where customers typically know more about the performance metrics of Uber (UBER) drivers than they do about lawyers.
If all the discussion of Amazon and “global legal marketplaces” sounds far-fetched, consider this week’s announcement by Thomson Reuters (TR) of Thomson Reuters Marketplace. Marketplace is an online, beta-version of 50 curated tech solutions and offerings that visitors can test before buying. The offerings include TR products as well as those of other approved vendors. The company has plans to expand Marketplace, growing the offerings for legal, tax and accounting professionals as well as adding solutions for government and regulator customers. Marketplace is a curated marketing channel providing Thomson Reuters with two types of “customers”: those that buy its products and approved vendors.
While there is certainly room for multiple marketplaces within the legal ecosystem, it’s easy to envision Amazon creating its own legal ecosystem. That could include everything from curated legal services and IT solutions, other products, access to data-backed providers of all-types (think: a 21st century hybrid of Martindale-Hubbell for licensed attorneys and allied legal professionals crossed with Uber driver data), self-help education and training tools, market research, events, etc.
An Amazon marketplace would be a boon to legal buyers and accelerate the end to law’s legacy buy-sell dynamic. For providers, it would be a challenge and an opportunity— providing a much-needed thinning of law’s provider herd. The challenge is for providers to offer differentiated services and products that can withstand heightened competition and better-informed buyers. It will demand that all legal providers reevaluate what they presently sell and what they should sell. It will also be a reckoning for the efficacy of their models, talent, competencies, management, strategic partners, collaboration with others in the legal supply chain, culture, and the sustainability of independent operation.
The opportunity is that customer-centric, highly-qualified, experienced providers—large organizations, boutiques, networks, strategic partnerships, or individuals— will extend their reach to a larger audience than ever before. A legal marketplace will expand the use of data as the basis for evaluation of competency, results, and the customer experience. It will replace law’s pedigree fixation and replace it with more meaningful metrics. The marketplace will reward differentiated resources and expose pretenders in ways that the legal industry has never seen.
Most legal service providers do not yet have Amazon on their potential competitor radar screens. As my good friend Richard Susskind remarked, “The competition that kills you may not look like you.” Amazon’s all-in entry into the legal industry would be more a transformational force than a direct competitor. Amazon would hasten the demise of most undifferentiated “big box store” law firms, underperforming in-house departments, redundant legal tech companies, many consultants, and, perhaps, several law schools. One thing is certain: digital transformation is coming to law, and the legal industry’s artisanal approach will remain only in isolated pockets. It will be replaced by a customer-centric, multidisciplinary, data-backed,collaborative, capitalized, dynamic, scaled, agile industry that is more closely aligned with its customers and strives to meet their objectives and exceed their expectations.