Firms warned of dot-com risks

ON-LINE SERVICES: Epoch cuts staff as Internet portal Geodesia goes down

Law firms have been advised to be wary of using on-line referral services, following the announcement that two more companies havefallen victim to the growing legal dot-com recession.

The developer of Desktop Lawyer, Epoch Software, has cut one-third of its workforce after its attempt to float on the stock market and its third round of fundraising failed.

At one stage, Epoch was the UK's fastest-growing legal IT company.

But Epoch's chief executive, Richard Cohen, said the business is 'in the same boat as lots of others at the moment'.

He explained: 'Companies like ours were being encouraged by shareholders and financial backers to expand our businesses, but they then cut the money, which is our lifeblood.'However, Mr Cohen said he expects Epoch to be profitable again by the end of the year.Meanwhile, top intellectual property lawyer Peter Rouse - the founder of London firm Willoughby & Partners and IP consultants Rouse & Co International - has seen his Internet portal Geodesia fold after just four months in existence (see [2000] Gazette, 31 August, 22).Mr Rouse, who is now considering his career options both as a lawyer and in a management role, said he remained committed to the concept of working through 'a thumping great on-line filing system' to combat inefficiency and lack of profitability.And he urged the Law Society to support its members to help smaller firms make technological advances.

'Individually, firms can't do this alone - collectively, they can,' he said.Legal IT commentator Charles Christian blamed the dot-com recession - which also consumed Law.com/UK late last year - on companies jumping on the bandwagon with purely speculative business models, hoping that they would eventually become profitable.

'Three or four' services rivalling the Law Society's solicitors-online site have also recently collapsed, he added.

Mr Christian warned law firms to be wary about using on-line companies in the current dot-com climate.

He said: 'If solicitors advertise with a referral-type company or on-line service, they need to check that it's getting the business and the Web traffic in.

If it isn't, they risklosing their money.'Paula Rohan