LegalZoom GC Eyeing New Tech, Expansion Into Foreign Markets

Things are looking up for LegalZoom. The online legal services provider and pioneer received a $500 million investment and reached a $2 billion valuation earlier this year. And its protracted and closely watched dispute with the North Carolina State Bar, which had accused the company of the unauthorized practice of law, has faded in the rearview mirror following a settlement

That’s not to say that the Glendale, California-based tech company, which was founded in 2001, isn’t facing any more hurdles as it forges ahead. But its top lawyer, Chas Rampenthal, said he’s seen a “tide turn” and believes that over the last decade the number of lawyers and bar groups who view his company as a threat has steadily diminished. 

Rampenthal spoke with Corporate Counsel about new legal tech, data protection and the future of LegalZoom. The conversation has been edited for clarity and length.

Corporate Counsel: What important lessons did you take away from your conflict with the North Carolina State Bar?

Chas Rampenthal: It’s really hard sometimes to look back on a fight and try to think of something positive about it. In the end, I think what’s more important is trying to learn how to not get into fights. We’ve been trying to figure out ways to get better help and information to the legal consumer. Then you show bar associations up front that you’re not the enemy they should be worried about.

Are you engaged in any other unauthorized practice battles?

There’s nothing else that’s going on right now. Some of these areas, you don’t necessarily get the exact same outcome as you did in North Carolina, where there’s the press release and a settlement. Some of them just send you a letter and you respond to it and never hear from them. But there’s nothing going on right now that’s threatening the core business model of LegalZoom.

I heard you were going to be offering “smart legal contracts.” What does that mean, exactly?

Smart contracts can be looked at two different ways: They can be looked at whether or not the contract itself is smart in its interface. And then there’s the smart that refers to the system of contracting itself. The smart contracts we’re talking about here are really that second part. What is the kind of framework underpinning a legal contract from its negotiation to its final terms? This is getting it signed, getting that contract managed properly though systems that could include the blockchain. These are systems that we’re in an exploratory phase on.  

Any idea when you’ll be offering this to consumers?

We’re taking it easy with new technologies. We’re trying to find out where the right fit’s going to be. I’d say it’s probably toward the end of next year before we see something that might be a little bit more suitable for mass consumption.

Can you be more specific about how you envision LegalZoom using blockchain technology?

When you think of small businesses that have to make regular payments or have to do regular invoicing and have to understand how to amend or renew contracts, putting them all into a smart system that tells them when and how to get that done so they’re not out there doing it themselves—that’s part of something the blockchain can do. But it can do a lot more. Right now we’re trying to figure out what, exactly, will a small business like. What will it need, use and pay for to make the contracting process a better value for the legal consumer?

What other new technologies are you excited about?

I’m excited about natural language processing and machine learning. These are technologies that we’re still exploring how they can be used. I don’t think it’s too far-fetched to think one day we might be able to ask questions of a very intelligent legal computer and get real answers to questions, questions right now that people don’t have answers to, questions right now where they’re having a hard time figuring out who can answer it and how much will it cost to answer it. If we can take that and make it more commoditized I think it will really change the face of the law. If we can figure out a way to harness the knowledge that most lawyers take to their grave and put it into an accessible, relatable medium, it’s something that can change the way consumers look at the law.

Cybersecurity and data protection are big topics of concern right now. Talk with me about how you’re dealing with those issues and the concerns that you have, as a GC of a tech company that deals with big data and lots of personal info?

If your head’s in the sand on this one you’re going to get owned. You’re seeing breaches almost on a weekly basis. It’s something that’s on the forefront of my mind not only from a risk standpoint but for customer satisfaction. People don’t want their data out there. We’ve taken a lot of steps to make sure that the data we’re collecting is secure and safe. We have training all the way across our company.

Do you have plans to expand to other regions, maybe Asia or Latin America?

A bit of a yearning maybe. We have some investments in other legal technology companies in Germany and Australia. We’re looking at others. You’re seeing companies now that are trying to start their own version of LegalZoom where you’re coupling marketing and technology with consultations with lawyers. Where that happens we’re keeping an eye on it and we’d love to expand where it makes sense by either partnering with their brand or acquiring their brand.

We have a pretty decent set of operations in the United Kingdom with several hundred employees out there. As of 2016, we were licensed to be an alternative business structure, which is a regulated law firm in the United Kingdom. We purchased a long-existing law firm that does conveyancing work. We’ve also been launching additional services through business formations where we can actually just not be a technology company but a legal company that employs solicitors and goes out and serves our customers in a regulatory environment that is more friendly than the U.S. 

Where would you like to do business next?

France would be a good one. I also think there are places in Asia that are interesting. A lot of work goes through Singapore and Hong Kong, for instance. It would be very interesting for us to play in those markets, but right now those are just kind of in my head. 

What’s holding you back?

We have a lot of fish to fry here in the United States. There’s just only so much you can do. That level of expansion takes, people, resources and time and right now, they’re all in short supply. There’s only so much that our leadership has the ability to chew on. That’s why we’ve been focused on making inroads in England, where you have a system of laws that are relatively similar to ours, where the language is relatively similar to ours. And we’re looking at other places that have relatively similar legal systems and partnering with professionals there who speak the language and understand our contracting systems.