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04 February 2020

West Coast new law pioneer UpCounsel to close in wake of law suit

Surprise decision to shut website permanently follows suit in which it was accused of violating bar rules

By Dr David Cowan

Mason Blake & Matthew Faustman UpCounsel

San Francisco-based online legal marketplace UpCounsel - once tagged by Bloomberg as "the most exciting tech start-up in law" - is to shut up shop. The surprise closure was reavealed in a message on the company's blog yesterday (3 February) by its co-founders, chief executive Matt Faustman and chief technical officer Mason Blake.

They said the company's board of directors and shareholders had agreed to the site's permanent closure on 4 March when all account information and usage data would be deleted in accordance with 'best data practices'.

Although no reason was given for the decision, the site had been accused of false advertising and unfair competition by patent and trademark law firm LegalForce RAPC in a dispute that was settled in early 2019, according to a federal court document, which said chief executive Raj Abhyanker obtained the right to buy 'a significant number of shares in UpCounsel'.

“It is with a heavy heart that we deliver this news and understand that this abrupt announcement will come as a shock to some of you that have come to rely on UpCounsel," Faustman and Blake said.

The site's abrupt closure comes hard on the heels of the decision by Atrium - another high-profile west coast new law pioneer - to lay off most of its attorneys and paralegals as part of a major review of its business model.

Both moves will raise questions about the extent to which 'New Law' and disruption of the legal profession is getting traction.

The lawsuit launched by LegalForce RAPC alleged UPCounsel had violated California bar rules that prohibit lawyers from sharing legal fees with non-lawyers.

Abhyanker told the ABA Journal he had become a significant shareholder of UpCounsel. He added: “My plan and my hope is that we will retool it and bring it back in a form that will allow it to continue thriving and doing the good work that it does.”

UpCounsel launched in 2012 and raised $26m from investors. The company provided freelance attorneys for brief consultations, full-time legal department staff positions and a variety of services. It was seen as the Uber for legal services, to the point that investors included Menlo Ventures, an early Uber backer.

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