Platform Economy in Legal Profession: An Empirical Study on Online Legal Service Providers in China

Abstract

Platform economy breaks into the legal profession by pooling lawyers with different specializations into a simple user-friendly platform, consolidating the lower-tier supply side of the legal market and generating economy of scale. This paper is the very first empirical piece looking into China’s online legal service portals. It is found that, the intermediary functions of the portals as the “matchmaker” between the supply and the demand side are often commingled with certain substantive legal services, which cannot be easily unbundled from each other. Given the grand information asymmetry in legal service provision and the potential importance the users may attach to the portals’ recommendation, the quality of such intermediation and matchmaking still leaves to be desired. This being said, because the portals help to improve the access to justice in China by virtue of offering an EXTRA channel for acquiring and comparing potentially useful information, which is made available at a much lower cost than visiting a physical law firm, the regulator should strive to improve the quality, rather than block up the source of the information. To that end, this paper proposes, based on the inspiration of the ABS regime, an alternative license for these online legal service providers, which imposes minimum regulatory and leaves room for new innovative business structures to evolve.

Keywords: platform economy, legal profession, legal innovation, legal service provision, professional regulation, non-lawyer ownership, alternative business structure, law and economics, access to justice

JEL Classification: G28, K00, K20, K23, K40, D82, D63