July 27, 2000

KUALA LUMPUR, July 27 - Spouses of rabid Internet users in the Hong Kong may be in for rude shock soon.

Online legal services start-up LegalStudio.com reports that one of its most popular downloads since it launched in June is do-it-yourself divorce kits.

Although the company carries the disclaimer that the "kit is only helpful if you and your spouse have agreed to divorce without argument", it seems highly unlikely that customers forking over HK$400 for the quickie, no-questions-asked kits online have reached such amicable consensus.

LegalStudio president and co-founder Milton Kiang said that the pick-up rate for its low-cost divorce solutions was just one indicator of the pent-up demand for online legal services in the region.

"Before we came along, many individuals and businesses would not have been able to afford legal help, or they would have been too intimidated by the law to seek redress. We make legal solutions very affordable and highly accessible to them so that they can help themselves," he said.

Apart from divorce papers, LegalStudio also hosts DIY kits on bankruptcy, marriage, work visa and wills as well as standard documents for Memorandum of Understanding (MOU), Letter of Intent (LOI), deed poll and shareholder's resolution. If you need to consult with a lawyer, LegalStudio.com will also put you in touch with one of its "legal affiliates".

Canadian Kiang said he struck on the idea for a fee-based 24-hour online legal service while he was an in-house legal counsel with Intel Asia Pacific in Hong Kong. "I set up an internal website to answer legal questions from my colleagues and realized how much I relied on email to deal with internal clients and legal professionals from law firms," he said.

Although lawyers seem to be the least net-savvy professionals in the region, Kiang believes it is inevitable that the legal industry would head the way of manufacturing and entertainment in an increasingly Internet-reliant world.

"Legal portals have been around in the US for a number of years already and lawyers do recognize the changes. While some support the new, Internet-enabled offerings, others scoff at them. We hope to change the way some legal solutions have been traditionally provided and transform the relationship between lawyers and the Internet," said Kiang.

Kiang estimates the legal services market in Asia is worth some US$20 billion, but less than one percent of it is online at the moment. "We are here to facilitate the crossover, and even if we get just a fraction of the market, we will be doing quite well."

Last month, Hong Kong-based venture capital player and incubator techpacific.com Ltd pumped in US$2.5 million for a 25 percent stake in the company.

In two months, LegalStudio has launched sites in Hong Kong and Singapore in rapid succession and is leveraging on its first-mover advantage with plans to roll-out in Australia by October and Malaysia in Q4 2000.

"Hong Kong, Singapore and Australia were our first three markets because of high Internet penetration rates, averaging around 50 percent, and high pent-up demand. None of these markets truly has a one-stop, round-the-clock destination for online legal solutions," said Kiang.

In Singapore, the company already has had discussions with more than 40 law firms with 85 per cent indicating an interest in participating in some way.

Kiang said the company is targetting tech-savvy individuals and small and medium-sized businesses in each of its markets but hopes to expand its offerings to appeal to larger corporations in the near future.

It also customizing each site with country-specific law firm directories, frequently-asked-questions databases, bi-lingual content, and is adhering to various local restrictions. LegalStudio's Hong Kong site, for instance, offers users a confidential paid-question service by practising lawyers for HK$300 a pop, but the service is disallowed in Singapore.

"We have experienced teams of native lawyers and web specialists in each country who make this customization possible. Law is a local phenomenon in Asia, a one-size-fits-all approach will never work here," said Kiang.

He added that most legal firms and professionals they have approached have been receptive to their model. "They view it as timely and welcomed complement to their existing law practices. We add value to the law firms that sign up as affiliates by channelling new business opportunities their way."

Kiang does not foreesee the company being held liable for the services it provides and the site shields itself behind a disclaimer that the information provided "is not legal advice nor conveyed in the course of an attorney-client relationship."

"We do not dispense legal advice on the Net ourselves, even though we have lawyers in our staff. That role is played by our affiliates who are recognized law firms, " he adds.

Kiang said LegalStudio plans to stick to the Asia Pacific region and has no plans for expansion into Europe.

He also sidesteps questions on an initial public offering, given the moribund outlook of late for anything Internet-related. "We have no immediate IPO plans. We are committed to developing LegalStudio into a profitable, long-term business first, and expect to be cashflow positive by the end of 2000 and profitable by the second half of 2001," he said.

Published in ZDNet Asia