Questions should be addressed to:
info@thelawdomain.net
dotLaw, Inc. Fiscal Information
dotLaw, Inc. was incorporated as a Delaware Corporation located in McLean, VA for the purpose of managing the .Law domain. The fiscal information below will focus on our estimates of expenses and our financial funding sources and our estimates of revenues. The information provided in this section is as of the time of the application. We are continuing to have discussions with additional potential investors and candidates for our management and advisory team. As more substantive information becomes available, we will supplement our application.
dotLaw, Inc. has entered into a strategic alliance with top-level domain registry dotMD, Inc. to provide registry services and other technical support through the application process and the initial year of operations. As a part of this alliance, dotMD, Inc. was given an ownership percentage in dotLaw, Inc.
dotLaw, Inc. has also entered into an agreement with the Financial Advisory Services business of PricewaterhouseCoopers LLP (“PwC-FAS”) to be the financial and strategic advisor to dotLaw and as an investor in dotLaw, Inc. PwC-FAS has substantial experience in the development of internet based businesses, the management and security of digital data accessible through the internet and in marketing concepts and brand enhancement. PWC-FAS is one of the largest professional services consulting firms in the world with nearly 2,600 professional employees and annual revenues in excess of $700 million. FAS-PWC will support and fund all development stage activity through award of the domain name.
Upon being awarded the .Law domain, PWC-FAS and dotLaw, Inc. will make a decision whether an outside investor will also be required for continued operations or whether PWC-FAS will fund start-up and operations entirely on its own. PWC-FAS has the capabilities to fund all future start up and initial operations of dotLaw, Inc. without the need of an outside investor.
As stated in our application, we have had discussions with investors that have expressed interest in investing in the .Law domain. In these discussions, investors were informed that an investment of $10 to $15 million would be required. These investors informed dotLaw, Inc., that funding in this range was well within their investment capabilities.
As stated in our application, we anticipate a start-up period of approximately six months to finalize the development of our domain structure (i.e., selection of index terms, meta-directory, policies, etc.,), develop the .Law web site interface with the dotMD registry system and Exodus domain server, and to finalize the branding/ marketing program. We will fully launch our marketing program once the structure is in place and tested. Our testing will include a complete security review by an outside third party.
Based on our analysis and discussions with DotMD, we estimate that the following expenses will be incurred in our first year of operations (including start-up period):
Salaries, General and Administrative: $2,750,000
Legal and Accounting: 500,000
Branding and Marketing: 4,000,000
Technology and Registry Systems: 1,000,000
Total $8,250,000
It is anticipated that expenses will increase in the second year by approximately $2,000,000 for additional staff and branding and marketing. Expenses in the following years will increase in proportion to inflation and domain name growth needs. We are projecting that the dotLaw business will be profitable from operations by year three.
As previously stated, we anticipate that an investment of $10-15 Million will be required to fund the start-up and initial deficits in operating cash flow.
Our revenue estimates are based on our research into the existing legal community and domain name registration studies. We estimate that revenue in the first year (including start-up period) second year and third year of operations will be $900,000, $7,000,000 and $22,000,000 respectively.
Our advisory team has substantial knowledge of and relationships in the legal community around the world. A substantial portion of the PwC-FAS revenues is generated in connection with many different aspects of the legal community.
Estimates of the size of the legal community are based on the following:
§ 1,000,000 lawyers in the US
§ 2,500,000 million worldwide
§ 44,000 US law firms
§ In the US, a Bar Associations in every state plus local bars – estimate 250;
- ABA – 400,000 members
- Sample of state bar associations:
§ Virginia – 5,400 members
§ California- 160,000 members (Integrated/unified Bar)
§ New York – 64,000 members
§ Pennsylvania – 28,000 members
§
Internationally, 173 country bar associations;
- IBA – 16,000 members from over 183 countries
- Sample of International bar associations
§ Japan – 16,806 members
§ Germany– 52,000 members
§ Canada – 37,000 members
§ Estimate – 1,000 vendors to the legal profession
Analysis of information from various sites and providers give additional insight into the market of potential domain registrations for .Law.
§ Martindale Hubble’s (MH) Law Directory - 900,000 lawyers in their directory from 150 countries;
§ Lawyers.com - 420,000 lawyers in legal listing
A report by Network Solutions-dotcom.com-business markets indicates the business that are “building an on-line presence” indicates that in 1998 attorneys were second among all industries, in 1999 they were the top business and in 2000 they are projected to be second. This study clearly shows that the legal community has a high priority on registering domain names.
Given the data above, and our discussions with members of the legal community we believe that the legal community would utilize the .Law domain. Working with dotMD, which currently is the only restricted/sponsored domain for professionals, we have estimated the potential number of domain name registrations by year to be as follows:
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
|
3,000 |
20,000 |
60,000 |
120,000 |
We anticipate pricing of the domain to be in two categories, one for the domain name only which will be in the $100 range and a price of approximately $365 for the domain name and bundle of services which also includes web page, e-mail and the meta-directory. Our pricing is reflective of requirements for a managed professional’s domain and is consistent with pricing for other professional domains.
We believe these estimates are very conservative given the worldwide domain name registration experience to date. Additionally, by working with DotMD our estimates are based on real market experience which has allowed us to be more accurate in our financial assumptions than might normally be the case if we were only using general marketing data. We want to highlight that even given these conservative projections and funding requirements in the $10 to $15 million dollar range, we anticipate operations providing a profit and positive cash flow by year three. This provides for a very solid financial position when coupled with the committed financial capabilities of PWC-FAS and the interest of other outside investors.
However, we also want to emphasize that our expense estimates listed above provide for a technical architecture and business operations to be established to handle registrations at a substantially higher volume at and through inception of the domain name award.
DotLaw, Inc., will engage the services of a Big Five accounting firm to assist with the structuring of the accounting systems, control environment and an annual audit. Even though we are not a public company, we believe given the fiduciary duty of a sponsoring organization that annual audits should be performed.
Prior to launching our registry system, we will have an outside third party perform a complete security review of our business and registry system.
We have also finalized an arrangement with Latham & Watkins to be corporate counsel to dotLaw, Inc., through the application process and upon award of the domain. Our primary contacts at Latham & Watkins will be David Schindler and Perry Viscounty.