Avvo, Modria and HotDocs: are the big fish taking over and does it matter?

Three companies important to the use of technology in access to justice have been absorbed within large commercial conglomerates in the last few months. This has not affected the continued growth of small legal start ups. For the time being, they continue to pro-literate: Stanford University’s CodeX website currently has a curated US list of 774. In the UK, Legal Geek and Thomson Reuters have sought to chart the breadth and number of a similarly burgeoning start up scene. But even as the sector continues to expand, does the fate of three of the early entrants indicate the shape of the endgame?

Avvo, Modria and HotDocs, the three companies concerned, have all been taken over by US commercial behemoths. Avvo, which provides a ratings platform for lawyers and ancillary legal services in every US state, has gone to a company named Internet Brands. This describes itself as delivering ‘an integrated approach to consumer media and client web presence in key high-value vertical markets’. It organises its companies in five categories: automative, health (it owns webMD), home and travel, legal and diversified media. The range is pretty eclectic. Avvo, once proud to proclaim is muscular impact on the legal profession, has gone into a pot that also includes with WeddingBee.com, a website on which the latest post is on 2018 wedding cake trends (hand painted and ‘drip’ cakes are very ‘it’ this year).

Modria provided the software behind the revolutionary Rechtwijzer online divorcee programme developed in the Netherlands (reborn with Dutch replacement software as uitelkaar.nl). Its software is still incorporated within the Canadian MyLawBC.com. Had Relate continued with its pilot of its project using a similar package, Modria would have been the software provider in a linked UK project. Modria is now part of Tyler Technologies, the ‘largest software company in the [US] solely focused on providing integrated software and technology services to the public sector — cities, counties, states and school districts.’ Tyler acquired its name during a period in the late 1960s when its largest source of revenue was the manufacture of iron pipes but has since successfully moved forward into the age of newer technology.

HotDocs is the only one of the three companies which has had its headquarters outside of the United States – in Edinburgh. It ‘allows you to transform your frequently used documents and forms into intelligent templates that enable superfast production of custom documentation.’ Those in the US legal services’ world know the firm because it has provided the document assembly facility behind the widely used A2J Author programme. This allows ‘non-technical authors from the courts, clerk’s offices, legal services organizations, and law schools to rapidly build and implement user friendly web-based interfaces for document assembly.’

HotDocs has a rather different history from Modria and Avvo. They were the classic products of driving founders. HotDocs was always more corporate. It began as a research project in a university (Morman Brigham Young in Utah) and ended up in Edinburgh via a sale first to LexisNexis and then on to capsoft.co.uk. HotDocs’ base has now returned to the US with its acquisition by AbacusNext. This is, as you might expect, all about anticipated synergy: ‘This acquisition will combine HotDocs’ market leading document automation technology and industry knowledge with AbacusNext’s 34 years of experience enabling professionals and business to automate their workflow, meet regulations, and eliminate the capital expenditures of IT infrastructure with AbacusNext’s compliance-ready private clouds. The newly expanded AbacusNext products and services portfolio will allow us to deliver the next generation of business management and cloud hosting solutions.’

And what about the people behind these firms as their companies seize the wonderful opportunities offered by their takeover? Well, this is the unsentimental offering from AbacusNext: ‘The sale of HotDocs was in line with HotDocs growth strategy. HotDocs talent and industry expertise attracted AbacusNext and made this acquisition a natural fit. We are very excited to join forces.Russell Shepherd steps down as CEO and exits the company, holding no further role as the company moves forward.’ We can only assume that the lack of thanks was balanced by a substantial financial payment.

The key people behind Avvo and Modria remain with the companies as they are integrated within the wider world in which they are now situated. They assert, of course, that nothing has changed in essence. But, Avvo’s Mark Britton and Modria’s Colin Rule were big beasts in the legal services world. For example, Mr Britton strutted his stuff with his counterparts at RocketLawyer and LegalZoom at a full plenary session of the ABA LegalTech conference last March. Colin Rule has been a major player in the world of online dispute resolution since his initial engagement with e-Bay. We will have to see how much their impact and roles are attenuated by their new employment relationships.

The crucial issue is, of course, whether this growing corporatisation makes any kind of difference or foreshadows a change in the market. At one level, the takeover of small firms by larger ones is part of the market churn that you would expect in any industry. The difficulties arise if the upstarts lose their edge as they are absorbed within what may be a more profit-centred and risk-averse world. Avvo, for example, has had to fight to establish its rating system of lawyers – including in court. In 2007, the US district court summarised the challenge thus: ‘Attorneys filed class action alleging that website, on which information about attorneys and comparative rating system appeared, violated Washington Consumer Protection Act (CPA). Website operator moved to dismiss.’ And dismiss the case is exactly what the court did, to the consternation of lawyers who objected to outsider ratings of their services. Would a conglomerate trading under the unrevealing title of Internet Brands have the same willingness to fight or wouldl it be tempted to play safe and be more conservative?

All those involved in the takeovers swear till they are blue in the face that nothing will change. The consequences will only be beneficial. But you have to worry that, embedded in a larger corporate world, there will be less appetite for risk, adventure and individuality. That, in itself, is no problem if the young upstarts keep coming but if the big fish have eaten all the easily available food, the new entrants may have a harder time to make it. Only time will tell.

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