How to make money on £2 legal documents?

Garfield AI has captured the attention of many, including me, for offering businesses the ability to pursue unpaid invoices of up to £10,000 for the princely sum of £2

To be able to offer support to small businesses in this way is a great example of the potential of new operating models, enabled by AI, increasing access to justice for low value transactions that traditional law firms are unable/unwilling to service

The Magic Circle are unlikely to be looking over their shoulders here, the closest competitor in this space is likely the DIY templates the Federation of Small Businesses (FSB) provide and the £30 drafting service Markel Law LLP optionally add on

But whilst the potential is certainly there, the key challenge is for Garfield AI to become a viable business at £2 a pop and ultimately this comes down to ability to scale across two dimensions - sales and delivery

i.e. win and do a lot of them

On delivery, parallels have been drawn with DoNotPay, but it is noteworthy that Garfield AI is an SRA regulated law firm and with this comes a level of supervision

The recent FT article discussing the launch of Garfield AI noted that Philip Young would be reviewing "all of the [AI] model's output [...] before moving to a sampling system"

Successfully making that that transition from supervising each transaction to supervising the overall model is critical to enable the delivery model to scale - particularly when there are hecklers on the sidelines waiting to say "I told you so" if it goes wrong

On the sales side, the same FT article notes £6bn to £20bn in annual unpaid debts and so the total addressable market isn't going to be the limiting factor here

But, as Darren and I frequently find in helping more conventional law firms in this area, the ability to penetrate that market and attract sufficient instructions from it is likely to be the key constraint here

Sales and marketing is going to be a real challenge where the customer acquisition cost must necessarily be south of £2 for the business to sustainably grow

So it is with interest that I noted towards the bottom of Garfield AI's own homepage that law firms can request a bespoke quote

I can certainly see an interesting model here whereby Garfield AI can capture volume from larger law firms that are unable/unwilling to support the lower value unpaid invoices their clients have, perhaps with some fee sharing for debts that fall outside the core Garfield AI business model

Also a win for those law firms now able to meet more of their client's needs

Interesting times, I wish Philip Young and Daniel Long all the best with the venture