Law Firm Replacing Itself With Free Term Sheet Generator
At a time when law firms are scrambling to hang on to every piece of paid business that they can, Palo Alto, Calif.-based Wilson Sonsini Goodrich & Rosati is giving away services for free. According to CenterNetworks, the firm has launched a free term sheet generator, a computerized service that walks users through about 100 questions to create a term sheet, a business document that outlines the financing terms and conditions of a business agreement or deal.
A site called Altgate.com previewed the Wilson Sonsini product, finding it "really impressive." From the post:
The way the tool works is that you answer a bunch of questions (north
of 100) and then when you are complete it gives you a perfectly
formatted Word file term sheet. Most of the questions are structured
as "select from" several options often with an optional to "write your
own." The beauty of having the option to select from "standard"
options is that [Wilson Sonsini] has included some market data, e.g. what percent
of term sheets in up rounds in 2008 included this term. Last year, I
spent a lot of time attempting to reverse engineer this data based on a
small personal sample size. Obviously, the firm has a much larger sample
size and the fact that they make it public (in aggregate) is impressive.
The Term Sheet Generator originated as an internal tool for Wilson Sonsini lawyers to rapidly generate draft term sheets, which they would polish
up and then deliver to their clients. Wilson Sonsini expects to make more online document generator tools available relating to startups, equity financing and bridge loans.
Will Wilson Sonsini lose business by giving away the term generator for free? From my perspective, it's hard to say. Most clients will find that they still require legal expertise in dealmaking and that the automatically generated term sheet is just one component of a deal. So even though these clients may generate the form themselves, they may still decide to retain Wilson Sonsini. Where I'd have concerns are those situations in which other lawyers are using the tool, then billing their own clients for work they created for free. Perhaps those are clients that Wilson Sonsini never would have captured in the first place. Even so, is it comfortable with other law firms using its product?
What's your view? And would you use this term sheet generator in your practice for your clients?
Posted by Carolyn Elefant on April 23, 2009 at 11:32 AM | Permalink
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