How Real Are Virtual Law Firms?

Volume 29 Number 5

By

Chad E. Burton is the founding attorney of Burton Law LLC, a virtual law firm headquartered out of Dayton, Ohio, with locations in Cincinnati, Columbus, and North Carolina.

At first glance, the concept of a virtual law firm sounds mystical or fake. In a profession historically resistant to change, the idea of altering the way business is done can be difficult for some lawyers to swallow. Peeling away the layers, however, reveals that there is nothing magical about a virtual law firm. It is simply a fancy way of labeling two or more lawyers who collaborate and recognize that innovation should play a role in serving clients.

This is what it is all about, right? Client service. Any decision made in a law practice ultimately affects how a client is served. Virtual law practices are no different.

The past few years have revealed unprecedented changes in the legal market. With a less-than-stellar economy, clients have turned to self-help methods or have decided not to pursue projects or litigate certain issues. In addition, clients have become increasingly sophisticated in their understanding of how the legal world works. How many times has a client started a conversation with, “Well, I Googled this issue, and it seems straightforward. . .”? Lawyers are beginning to understand how doctors felt about the emergence of WebMD.

Lawyers who argue that these changes are ruining the profession are ignoring client needs. Lawyers and law firms should recognize these circumstances as opportunities instead of viewing the changing marketplace as a roadblock.

Much has been written (rightfully so) to help educate lawyers on the existence of these different trends. This article reviews opportunities within virtual law firms and why they are relevant from the client’s point of view, including the ideas behind various emerging models of virtual firms, the technology driving these models, and changes in law firm culture needed to optimize client service.

 

Emerging Virtual Law Firm Models

“Cover bands don’t change the world.”—Seth Godin

If client expectations change, law firm models should follow. Virtual practices have emerged in various iterations, each of which is driven by the practice’s client base. The models range from solo practitioners delivering services online to large firms operating outside a traditional bricks-and-mortar setting. The concepts are limited only by the creativity of those involved.

Multi-lawyer firms can now practice in a distributed manner. The firms have centralized meeting space for attorney or client meetings, but the lawyers practice from home or in other locations that make the most sense to each lawyer. Virtual assistants are used for administrative support. Cloud-based practice management systems enable the lawyers to collaborate on cases and to have all information related to the matter at their fingertips—whether they are at a home office or traveling on the other side of the world.

Virtual firms can be full service and handle the entire range of existing practice areas, from estate planning to criminal defense to business matters such as mergers and acquisitions and complex litigation. From the client’s perspective, the work product completed does not look different than that produced by a traditional firm. It is how the firm operates in the background that differs. This is where setting up the right structure and team is crucial.

When determining whether a virtual firm model makes sense to serve a client base, some questions can be posed:

  • Do your clients actually care where you do their work?
  • Do your clients care if your team is constantly under one roof?
  • Do your clients care whether your office is inundated with paper or you have an organized system online where information is easily found?
  • Do your clients care whether your receptionist is sitting at the front desk of “your” office building or whether a virtual receptionist answers the phone and can connect the call and answer questions just as easily?
  • Do your clients care that your Class-A office or conference room is an office-sharing arrangement, such as at Regus?

Yes, these questions are skewed. But they are legitimate. What do clients really want? To hire a lawyer or firm who will do their work, do it right, communicate often, and not drive them into unnecessary financial hardship? That is why these emerging models work to serve clients.

The common denominator of virtual practices—whether a solo venture or a firm of 100 attorneys—is that they still utilize the brilliant thinking and training of the lawyers but do so in a manner where fees are lower. When firms are able to reduce the expenses of operating the business, this should be passed along to the clients. It increases access to the legal system, encouraging more people to hire lawyers. More clients is not a bad thing.

Some lawyers criticize those in virtual law practices as “Starbucks lawyers” or write them off as failures who couldn’t find a “real” job. There is an element of truth to the observation that some lawyers start virtual practices because of the job market. It is no mystery that law schools are cranking out more lawyers than jobs exist. Virtual gigs do provide a lower access point into the market for new lawyers, but this fact does not supplant the need for legal skills training. These are two separate issues. Proper legal training is needed for any type of virtual setup to succeed.

More importantly, some virtual firms emerge not because of the economy or lack of jobs but because the lawyers recognize that “the way things always have been done” may not be the right answer from a client-service perspective.

Regardless, criticism in this area is a good thing. Questions advance the analysis and help vet good versus bad practices. If a firm cannot answer “why” a virtual model legitimately optimizes client service, then it should go back to the drawing board. The same analysis should apply to traditional firms.

 

The Technology

Cloud computing helps drive emerging virtual models. Some in the profession discount the use of such technology without truly understanding it, but this technology is now the norm—it is neither scary nor evil. Fortunately, as lawyers, analyzing situations comes as second nature. If a firm or lawyer is not comfortable with their understanding of a product and its security, particularly in terms of security and confidentiality, the cloud provider’s “service level agreement” provides information on how the data is stored and the policies and behaviors of the company. There are endless reviews, forums, and listserves online about each cloud-based platform that lawyers are using. Further, the International Legal Technical Standards Organization has developed a set of best practices for using this technology.

Legal-specific online practice management tools are developing and expanding regularly. Clio, Rocket Matter, and Total Attorneys are the established practice management solutions. Others are joining the field. These platforms allow lawyers to engage with their clients through secure online portals and maximize the mobility of lawyers. With this technology, entire firms can operate off of mobile devices. This helps break the chain that ties lawyers to a bricks-and-mortar office.

Virtual firms require a paperless work environment. The cloud supports this effort, which, ultimately, supports client service. Which is better: a client calling with a question that requires the review of a particular document and the lawyer and/or staff spending hours trying to find a document that somebody misplaced, or accessing the document in seconds through an online system? Which is better: risking the loss of an all‑paper office after a natural disaster or having data stored online, encrypted and redundantly backed up and accessible from any online connection? The questions are over-simplified but necessary. One can imagine disciplinary or malpractice claims if paper documents are inadvertently destroyed and not stored or backed up electronically.

Cloud solutions also provide collaborative work environments for lawyers working out of different locations. Whether the firm is providing full or limited scope (unbundled) services, lawyers at different locations have access to the same information simultaneously. Multiple lawyers can dive into a project regardless of physical location because no one has to ask, “Where did Johnson put the Smith file?”

 

Law Firm Culture

Culture matters when it comes to client service. This is true for any law firm model, but virtual firms have unique, built-in characteristics that can improve lawyers’ satisfaction about the work they are doing, which ultimately better serves the client. Under a virtual model, the key component regarding productivity remains whether the client is served. Was the filing done as well as possible? Did the client’s questions get correct and timely answers? If the client’s work is done on time and done right, why does it matter where the lawyer physically drafted that brief? If a lawyer can be more creative and productive outside a traditional office setup, work product will naturally be stronger.

Trust among lawyers working together is critical to culture. Under virtual models where lawyers work in a distributed manner, this element is heightened. You do not have “face time” to see what everybody else is working on day-to-day. Instead, lawyers are trusted as professionals to do the right thing and serve the clients. The stronger the sense of trust among the lawyers on a team, the better the firm’s operations.

Another key aspect of culture is collaboration. Clients are better served where lawyers openly collaborate on projects. This is not just about delegating down the food chain to have someone else do the work. It involves lawyers putting aside the natural inclination to wrap their arms around a project and not let anyone else in. This concept is often counter-intuitive for lawyers. The problem starts in law school, where the culture fosters an “I win, you lose” mentality. This thinking carries into the profession under old-school billable hours models—associates race to a partnership position through accumulated hours or look to bill more time to survive employment, even if another lawyer could handle the work. If that is what drives the lawyer’s mind-set while doing work, the client is not necessarily served in the process.

There are ways to counteract these natural tendencies for lawyers and to spread work throughout a team. One way is to create a financial structure that encourages collaborating on client work. The models that encourage lawyers to not only bring work into the firm but also to get other lawyers involved in those projects ultimately serve the client because the right lawyer is involved. This helps move lawyers out of self-preservation mode regarding work production. Lawyers will be less likely to keep work to themselves if they have a team that can help serve their clients and serve them well.

Cloud-based tools help develop collaborative cultures. Virtual firms have the leg up because they are already using these platforms for their clients. The easier it is for lawyers to openly share information, the more sharing will occur and the more these lawyers will collaborate and trust each other. Tools such as Yammer and Basecamp provide online project management and collaboration tools that lawyers can use alongside their practice management solutions.

 

This Is Real

When developing a virtual law firm model, there are some key factors to consider that will help get the venture off the ground and running:

  • Why are you doing this in the first place? (This big-picture notion will help ensure a sense of purpose with the firm.)
  • What clients will the firm serve?
  • What is the ideal lawyer profile for the firm (not only to serve the clients but to fit the desired culture)?
  • What cloud-based tools are needed to serve the clients and to allow the lawyers to collaborate?
  • What does the ideal firm culture look like, and how does it get developed?
  • How can the firm’s staffing needs be satisfied to support the lawyers and clients?
  • How will lawyers be compensated in a way that supports the firm culture?

Really, these are questions that any law firm should be asking—which shows that there is nothing magical, gimmicky, or mystical about virtual law models. These are simply new ways of doing business and serving clients. Five to ten years from now, this will simply be called practicing law. Until then, the label “virtual law firm” makes sense to help the profession understand the opportunities, implement the new technology, and highlight the way clients expect to be served.

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