Our most important group of potential customers are the courts. Judges and administrators will be the focus of our marketing efforts. They do not want to waste their time or risk their money evaluating many products, services, or systems but realize that they have to adapt to the changing times. Knowing this, eDocFile has to create a targeted and focused plan to address the needs of the court.
Statistics provided by the National Center for State Courts show a growing trend in court filings: in 1999 there were 86,091,501 criminal and civil filings in state courts, 87,792,486 in 1997, and 89,409,300 in 1998. It is clear that judges and administrators must do something to make this process efficient and effective. The market for electronic filing is in its infant stages. Currently, there are a few test markets with no dominant market players.
eDocFile has identified three distinct segments, the courts, lawyers and judicial information users.
Courts realize they have to adopt some form of e-filing system to become efficient and effective. Yet these costs are very high and adoption rates are slow. When implementing and maintaining such a system is staff needs training in the new system and if the system is based on hardware requirements, then an IT department has to be created, further adding to costs. A building may need to be rewired to accommodate the new system. Each of these considerations adds to the coast of most e-filing systems. In comparison, eDocFile, is inexpensive and much more responsive to the changing needs of the courts, both in the short term and long term.
Lawyers will use the system at first on a transactional basis and will become a captive market as courts adopt the system. We will offer lawyers additional services as more of them start using the system. As we move toward becoming a legal portal, integrated value-added solutions targeted at specific segments within this group will command premium prices. Our turnkey extranet solution also allows small to medium law firms to compete on technology without developing an internal IT infrastructure. Lawyers will benefit from our hosting and document management solution because they would not have to become experts in networking, connectivity or specialized software. They can focus on the practice of law with confidence that their technology needs are met. eDocFile is a simple choice for lawyers who want to compete in the electronic age.
Judicial Information Users
Judicial information is used daily by a number of professional services. For example, real estate professionals, credit reporting agencies, employers and temp agencies, schools, and lawyers are all users. With rapid advances in connectivity these markets may grow to include private citizens who want to check their public profiles. While this segment is not the primary focus of eDocFile's current business plan, we foresee it playing a substantial role in the future as we integrate more content from other sources of public information and can customize it to suit individual needs.
Electronic filing has been defined as "... the process of transmitting documents and other court information to the court through an electronic medium, rather than on paper. E-filing is in its infancy.
There are many brand name companies entering the industry. However, these companies have existing products, which they are trying to use in order to leverage the e-filing market. We believe this strategy will fail because it locks the courts into proprietary standards. Further, these companies charge high prices for their technology.
Electronic filing lets people get more of their work done with their PCs, send and receive documents, pay filing fees, notify other parties, receive court notices and retrieve court information.
Impact? Significant! More than 89 million civil and criminal cases are filed annually in State courts, and more than 17 million Federal district and bankruptcy cases. Over 100 million filings are made each year.
Contrast the definition of electronic court filing above with how court filing is accomplished today. Their clients reimburse Law firms for costs associated with preparing the document for filing, delivering the document to the court, and getting a confirmation that the document was received.
Market research indicates that US consumers of legal services (individuals and businesses) reimburse attorneys an average of $35 per delivery event (messengers, mail, overnight and rush deliveries).
Moreover, more than 80 percent of all lawyers often "rush" delivery , which frequently can add another 22 percent to the cost. When successfully implemented, electronic filing can reduce these costs, perhaps as much as 75 percent.
At the courthouse, the cost savings can be even more dramatic. Recently, a Kansas court compared filing materials electronically and traditionally. To file 100 documents traditionally took more than 10 hours to process and roughly $220 in staff time. But to file the same documents electronically took 9 minutes and cost a mere $2.80. With more than 17,000 state courts, the savings to taxpayers quickly add up.
Most importantly, roughly 98 percent of all law firms have all the equipment they need on their desks today. There is no need to purchase new equipment or software.
The majority of U.S. courts have yet to purchase modern court management systems or document management systems. Electronic filing requires these two systems be in place to work. Competitors are legacy vendors who already provide courts or lawyers with existing hardware or software technology; we combine case management software with Internet communication software and host the solution on an extranet.
E-filing markets are going to be won mainly by word-of-mouth recommendations. eDocFile will recruit all of its consultants from the ranks of judges and lawyers and pairing these consultants with IT professionals. These teams will be responsible for building and cultivating relationships with the court systems, and for spreading the gospel of eDocFile. Primary distribution channels will be through the Internet itself. Our branding and positioning together with a focused marketing campaign will create a "drive to the Web" philosophy. This strategy is consistent and mutually reinforcing with both our product and our company culture.
We believe clients place a lot of trust in professional reputation and reliability of brand name. Therefore, our strategy is to hire exclusively from the ranks of legal professionals. Also, creating a company culture that prizes innovation, quality, excellence, and customer service as our cornerstones will help support and justify the customers' confidence in our company, conveying value to our brand identity.
The market is price sensitive because budgets are determined by committees external to the courts, and often have to wait in line for funding IT projects or in some instances have to wait for the next budgetary cycle; for example, New York has a two-year budget cycle. Current competitors are capitalizing on market demand for this new service capability and are charging premium prices. On price, eDocFile will be the market leader, our strategy is to encourage adoption and secure a large market share and develop brand name recognition.
Bandwidth will become crucial to future products as we introduce multimedia features to the litigation process. Great strides in bandwidth are currently being made and we are developing relationships with telecommunication companies to look at partnering so that we can offer a complete solution to both courts and lawyers.
We believe that eDocFile will become a leader in electronic filing, by maintaining low prices, professional service, and capturing significant market share. This success will propel eDocFile to position itself as the premier portal for the legal community.
Brand Name Companies
Strengths: High consumer confidence and trust. Enviable reputations, which make purchase of products an easy decision for a manager, despite the very high prices. Have understanding of general legal profession and access to the e-filing market through existing relationships. Have huge financial resources to flood market with their proprietary standards.
Weakness: General legal knowledge doesn't substitute for this specific market channel. The rapidly changing Internet often outpaces the adaptation curves of large companies. Also, these company's fees are extremely expensive, and would be an obstacle to all but the large court systems. Using existing products will be a hurdle to overcome, since it is based on the cookie cutter mentality, one solution fits all courts.
No dominant players currently exist as most products are still in the test phase. While there are some corporate giants entering the market, no one can claim to have significant market share. Most companies are in their beta-testing phase. The distinctions between the product and information services we offer are implicit in the simplicity of use and is a web based turnkey solution. We do not have existing products that we are trying to preserve as we enter the market, therefore customization and flexibility are easily achieved.
Our initial targets are small to medium courts: large courts, which are the traditional target markets of the brand name companies, will become a secondary focus. eDocFile is adopting a "seize" strategy, that is, we will focus on the smaller courts that surround the large courts systems, building on our successes. These victories, and simplicity coupled with the cost effectiveness of our solution will eventually attract larger courts. Functioning in the shadow of the behemoths while we are building brand name recognition, establishing trust relationships and capturing market share will insulate us in the embryonic phases of growth.
Our cost advantage is greater so we do not have to compete for high margin contracts to be successful. In beta testing, Justicelink charged the courts of Prince George's County, Maryland $25,000 to install their system. Software for subscribing lawyers cost $175 to $200 per workstation. Lawyers also pay $15 per filing and $0.50 per minute for on-line time to query the court's case management database information. Our installation costs are free to the court systems and per transaction costs to lawyers are only $10 with no per minute charges for any queries. We designed this pricing structure to mimic utility pricing models and to encourage usage and adoption among courts. As courts use our system and store data, eDocFile will enjoy a revenue stream from hosting charges, which will run them about 10 cents a megabyte. The hosting arrangement also creates huge barriers to entry driving up changeover costs.