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UpCounsel Shutting Down (upcounsel.com)
43 points by thisisxavier 1 day ago | hide | past | web | favorite | 24 comments





- "journey": check

- "humbled, honored": check

- complete shutdown < 30 days: check

- no context on what, why, and how it happened: check.

This is a sour post, sorry for that. Startups are hard, no question about that.

But as mentioned elsewhere, this type of posts just adds more damage and unclarity to a situation that is probably pretty dramatic for the founders, customer and employees.


I think it's worth noting that non-company stakeholders like myself are in no way owed an explanation of why this happened.

As you alluded to, shutting down a startup is a tremendously stressful experience for founders and management. Their top priority is doing right by their customers, employees, and investors. Doing a proper post mortem for the public, in my opinion, is far down on the priority list, and I'm fine with that.


These are the scammers that would report 4,000 5 star reviews for tiny law firms supposedly handling high end ip matters? It was a total scam set of ratings (they claimed to just use top 5% of firms as well but the “ratings” they claimed users left were garbage) - their transparency might have to be “we were caught making up reviews of attorneys on our site”? Don’t know details but someone could find a bar complaint or lawsuit I think

Silicon Valley has consistently failed to disrupt legal markets, not just because lawyers are a protectionist guild, but also because clients seem to want to overpay. It’s a pathology that has something to do with the idea that the higher cost is worthwhile. As a lawyer who has been both a BigLaw attorney and in-house counsel, I find the premise that name brand law firms are worth their fees to be totally wrong. The incentives for any lawyer who is on the clock are contrary to your own best interests, and even more so when they have to pay for a pyramid scheme of senior partners, expensive offices, first-class airfares, etc.

Try going through a funding round with well-known VCs. I bet they all still use Gunderson and Wilson Sonsini instead of the “disruptors“ in their own portfolios.


I think the customers don't know how to use legal counsel and somehow don't want to learn. I agree it's bizarre.

I have used Gunderson Dettmer since they started (was before that one of VLG's first accounts) and have very low legal bills. But I know when to use them and when not to. And when a partner is needed (almost never) and when I can get as good or better from an associate.

Another weird thing is that many customers value the firm and not the partner (I don't really use the firm GD, I use specific people). I "used" Cooley for one specific firm but really I used one person and when he decamped for another firm my company moved with him. Likewise just because that company used Cooley for general corporate law didn't mean we even considered their patent team.


I really hope I never have to learn how to use legal counsel.

Businesses, of course, have to, but even there it's hard. How does one "shop around" for a lawyer? On what basis can I judge whether somebody is sufficiently smart, hard working, and experienced in the domains I will require?

If I had to do it every day, I'd learn through a series of mistakes. In fact, that's basically what I have done, on the few occasions I've needed a lawyer -- I'm pretty sure I've gotten poor-quality work, but even now I don't really know. I know that I'm not happy with the results in every case, but I have no idea if a different lawyer would have done better.

That has mostly left me really hoping I never need an attorney for my personal life. Which I will, some day -- and suspect my heirs will complain about my choice.


You should meet a friendly lawyer (perhaps an ex classmate who went to law school) and have them "show you the ropes". There's a ton of unnecessary crap that customers (err, "clients") ask for or could and should do themselves.

And there are places lawyers can help a lot (hint: typically not business decisions).


Part of it is that legal work has high risk if done wrong so people tend to prefer large firms and high prices since it offers peace of mind, even if there's no real difference.

I don’t buy into the idea that big law firms are more accountable than anyone else. I’ve spent too much time behind the scenes to fall for that anymore.

Can you imagine trying to sue a global law firm for malpractice? Are you aware that everything gets pushed down to the lowest, least experienced associate because that’s built into the business model?

Some firms are better than others, but I just simply don’t trust any of them any more.

Edit: I also don’t have too much respect for senior partners at big law firms any more. What kind of person cedes that much of their personal equity? If they were really great, they’d take their clients and run away from the huge, dysfunctional cost structure of BigLaw.


> I don’t buy into the idea that big law firms are more accountable than anyone else.

That’s not what the previous person said. People just think they’re paying a premium to get it done right, when as you point out, price is uncorrelated to correctness


Yes, my point is that people prefer the bigger names because it comes with a better perception of quality and general guarantee that they'll be around in case something goes wrong.

> I don’t buy into the idea ...

You are failing to put yourself into the customer's shoes. Maybe you don't buy into it, but clearly customers do.

I don't know what the legal disruptor market strategy is, but going on what you've said, they shouldn't be differentiating on price. Rather, use reputation against the incumbents, somehow.


I’ve used WSGR countless times at startups and while they are great to deal with the fees are very cost prohibitive for a bootstrapped company. I think in the case of UpCounsel there’s significant pushback against this business model from big law firms as well as competition. They lost a lawsuit with another somewhat competing company called LegalForce I wonder if that influenced them shutting down.

So I started legal tech myself and am familiar with Upcounsel.

They struggled to build a sustainable network effect in their marketplace due to regulation (split fee is prohibited) and business model. Regulation deterred lots of lawyer to join in fear of losing their licence (despite the fact they already had a significant number) and thus increasing CAC of acquiring supply.

Second, legal service are very punctual (dont need them often) which mean its a low frquency purchase which again increase CAC.

Competion with traditional law firm on top of it didnt help. In marketplace you need absolutely a community that fuel word of mouth and network effect but in this case lawyer just couldnt rally as much as they wanted (regulation).

good idea, good founders, good product (yes there was some bad reviews but nothing out of the ordinary for an online marketplace/or any business) but in the end, business model didnt work. Avvo had similar issue and closed one of their product. Looking forward to their next startup.


I know these situations can be painful, (and there may be concerns re: confidentiality), but I really wish more founders would share a bit more detail describing what went wrong.

This kind of candor would be hugely valuable to other founders who are still in the trenches.


I just discovered UpCounsel recently and it has been extremely helpful for keeping costs down at a startup. Very disappointed as I was looking forward to using for years to come. I especially like how fees were clearly displayed and lawyers were able to compete to get the job.

You created an account just to hype a dead start-up?

That's too bad, I'm based in Poland but I used them often to register trademarks in the US and ask legal questions about doing business there. It was very helpful and transparent with pricing.

Are there any good alternatives?


Huh, I have just been looking to get some legal advice and this seems like exactly the kind of service I'd want to use. Shame it's shutting down.

Does anybody know similar services?


A good alternative is https://www.lawtrades.com

Also you can call local offices and individual lawyers and build up a long-term relationship. I've done that for previous startups and they can easily handle most general work and introduce you to any specialists you need, while saving all the overhead of going with a firm or in-house counsel.


Unfortunately no details on the cause. The business model is valid and perfectly sustainable so it should be good news for LawTrades and the others.

No details on the reasoning why?

Ads all over a startup blog. Hrmm.

Yep, I thought that was odd too. I wonder if they always had ads or trying to milk the news they are shutting down?

I kinda always felt ads on a business blog was kinda unprofessional unless you had a general tech/news type blog or the ads on your business blog is for your own products/sponsors/community, etc instead of general unrelated third party ads.

Also I guess another flaw of using ad networks for your own company blog, someone could pay money to display ads for their competitors product on their competitors websites.




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