Virtual Law Practice

ABA TECHREPORT 2014

Joshua Poje is the Director of the American Bar Association’s Legal Technology Resource Center, where he provides technology and practice management guidance to attorneys throughout the country. He serves as editor of the annual ABA Legal Technology Survey Report, the most comprehensive annual survey of lawyer technology use. He is a frequent speaker on technology topics at national and state bar conferences, and has authored numerous articles and guides on topics ranging from the ethics of cloud computing to data security. He also blogs about legal technology and practice management issues on Law Technology Today.

Ask someone outside of the profession to paint a picture of a “typical” lawyer and you’ll likely get some variation of the stereotype: a hard-charging workaholic in a wood paneled office with a phalanx of assistants to answer every whim. For this stereotypical lawyer, work-life balance is a punch line rather than a policy. 

As those within the profession can attest, technology and economic realities are steadily flipping the classic lawyer stereotypes around. Expensive, opulent offices are being replaced with flexible open environments and work-anywhere mobility. Lawyers are expected to utilize sophisticated software rather than assistants and paralegals, a trend reflected in the steadily decreasing ratio of staff-to-lawyers. The constant ticking of the hourly billing clock is now often replaced with predictable flat fees backed by careful project management strategies and tools.

At the edge of this wave of innovation and modernization a new category of “virtual” law practice has emerged. These practices utilize the latest technology and practice management strategies in ways large and small, from replacing back-office utilities to fundamentally redefining the way lawyers interact with their clients.

What is Virtual Law Practice?

In Stephanie Kimbro’s Virtual Law Practice: How to Deliver Legal Services Online, she defines a virtual law practice as “a professional law practice that exists online through a secure portal and is accessible to both the client and the lawyer anywhere the parties may access the Internet.”

While this is an excellent and popular definition, a quick survey through legal publications, listservs, and conferences show that the industry as a whole has yet to settle on a single definition.

In the 2014 Legal Technology Survey Report, a series of questions addressing topics related to virtual practice begins with a threshold question: Would you describe your practice as a virtual law practice?

In 2014, only 7% of respondents overall answered that question affirmatively. Solo practitioners were the most likely to respond that they had a virtual law practice at 10%, but 8% of both small firm respondents (2-9 attorneys) and lawyers from the largest firms (500+ attorneys) responded that they also had virtual law practices. 

Given the vastly different realities of a solo/small firm and a megafirm of 500+ attorneys, it seems obvious that there are different definitions of virtual practice at work.

To dive more deeply into the topic, the Survey asks a follow-up question to those who answered that they consider their firm a virtual law practice: what are the defining characteristics that make their practice virtual?

Among the smaller firm respondents, the leading responses were a lack of traditional physical office followed closely by minimal in-person contact with clients. By comparison, zero respondents from the largest firms cited either of those two factors.  Rather, at the largest firms, the defining characteristics were use of a secure client portal/extranet and the use of web-based tools for client interaction. Interestingly, offering unbundled legal services was a consistent characteristic amongst both solos (42%) and the largest firms (40%).

What does this mean?  Generally, it seems that smaller firms tend to connect “virtual” with the physical nature of their firm—the four walls of the office and the presence of clients on site. For larger firms, virtual refers more to the technology that powers client communication. Though they clearly retain traditional physical offices, they’ve moved some of the traditional trappings of a law practice—file rooms, conference tables, and couriers—to the web.

Because the Survey is directed at lawyers rather than IT staff, it cannot directly address another possible definition of virtual law practice: the movement of IT infrastructure from the office to the cloud. Firms of all sizes, but particularly the larger firms, are embracing virtualization as a way of reducing capital expenditures and making IT expenses more predictable. Server rooms and their support staff are giving way to managed service providers and cloud computing. To the lawyers using the technology the change may be invisible, but it can have a meaningful impact on the firm’s finances and management.

Clearly, it’s impossible to narrow the definition of virtual practice to a single definition today. We can nevertheless look at several of the key components of virtual practice to examine how they’re being adopted and what implications that adoption may have for the practice of law.

Secure Client Portals

In 2014, 22% of respondents to the Survey reported using a secure client portal. For purposes of the survey, a secure client portal was defined as a client-specific, password-protected portal/extranet where a lawyer and client can interact and transact business online. The overall usage is relatively consistent with recent years, which have fluctuated from 20% in 2011 to 25% in 2012 and 2013.

Respondents from firms with more than 100 attorneys were the most likely to report offering such a portal to their clients, though the adoption rate has dropped modestly in from a high of 62% in 2012 to 57% in 2014.  Mid-size firms of 10-49 attorneys also saw a decline from 19% in 2012 to 10% in 2014.

It’s easy enough to understand why use of client portals would tilt towards larger firms. Not only do they have more resources available to build such a portal, they also likely work with more technically sophisticated clients (e.g. financial institutions, large businesses, etc.) who would demand and embrace client portals. It’s less clear, however, why the usage rate seems to be declining among some firm sizes.

It’s possible that the economic climate hasn’t justified the use of portals. When asked what technology or service powers their secure client portals, the two most common answers in 2014 were an in-house/custom solution (13%) and SharePoint (12%). In both cases, setup and maintenance expenses—particularly in the form of staff support or consultant fees—were likely considerable. If the portals haven’t been widely embraced by clients, the expense may no longer seem justified.

Another possibility is that usage hasn’t truly changed; rather, respondents have simply become better educated about the technology that their firms offer. As evidence, note that in 2011 fully 71% of respondents offering a secure client portal answered “don’t know” when asked to name the technology that powered it. In 2014, that number had dropped to 59%. Perhaps as lawyers have become more familiar with the notion of a client portal, some have come to realize that what their firms offer doesn’t actually qualify.

Regardless of the fluctuations in use, secure client portals remain valuable tools. They offer a number of benefits, including: providing clients with 24/7 access to key documents and information; allowing clients to pay bills quickly and easily online; and improving security by decreasing reliance on email. They’re also central to the idea of a virtual practice under most definitions. They replace the firm’s physical presence in the mind of the client and can enable more modern practice models including unbundling. Unquestionably, they’ll remain a part of the virtualization discussion for the foreseeable future.

Web-Based Client Interaction

Use of web-based tools for client interaction was a commonly cited feature of virtual law practices by all firm sizes, with 35% of respondents overall citing it as a defining characteristic.

Such tools can come in a number of different forms, but none is more fundamental than the firm’s website. In 2014, 86% of respondents reported that their firm has a website. The average is pulled down by solo practitioners, amongst whom just 63% reported having a website. At firms with 10 or more attorneys, 99-100% of respondents reported that their firms have a website.

Firm websites are used in large part to convey static information about the firm and its lawyers. According to the 2014 Survey, 98% of respondent’s websites contain firm information, 97% include attorney profiles, 97% include attorney contact information, 63% include articles and presentations by attorneys, and 54% feature press releases. 

When asked about more sophisticated client interaction features offered via their website or another similar tool, the rates drop significantly. 26% of respondents report offering document sharing, 20% offer some form of messaging/communication, 17% offer invoicing and bill payment, 14% scheduling or calendar, and 13% offer case updates. Just 6% offer real-time consultations for clients and 5% offer fillable forms for online document preparation.

These numbers suggest that while firms have almost universally accepted the value of websites as marketing tools, they’ve yet to widely embrace their website as an actual practice tool. This may be a considerable missed opportunity, even if they’re maintaining a client portal or some other client-facing tool separate from their website. 

Virtual Offices & Telecommuting

Returning to the more physical aspects of the virtualization discussion, it’s clear that many lawyers equate virtualizing with stepping outside of their traditional office. The Mobile Lawyers volume of the 2014 Legal Technology Survey Report provides some insight into how lawyers practice remotely. 

In 2014, nearly three-quarters of respondents reported telecommuting. Given how much telecommuting is praised for work-life balance, it’s surprising that 83% of those who reported not telecommuting simply had no interest or found it unnecessary. Only 8% lacked the necessary technology and just 5% were prohibited by policy. And as common as telecommuting may be, the frequency is relatively low: two thirds of those who telecommute reported doing so less than 3 times per month.

The most common location for lawyers to telecommute was from home at 88%. Hotels (40%), others’ offices (23%), and vacation homes (18%) followed. Public places were relatively uncommon at 16%, though among solo practitioners the use of public places jumped to 28%. This presents a meaningful security concern: public WiFi networks can expose users to serious risks and should be used only with extreme caution.

Beyond telecommuting, the Survey also addresses the use of virtual offices. A virtual office provides a firm with a fixed mailing address (often in a prominent location) and various on-demand services including office space, receptionists, and conference rooms, but is not intended as an actual day-to-day working space. They’re often used by lawyers who work from home and prefer not to publicize their home address (or, possibly, the fact that they work from home).

In 2014, just 5% of respondents reported using such a virtual office including 9% of solo practitioners and 8% of small firm practitioners. The most common virtual office services used by respondents were mail collection/forwarding (85%), access to conference and meetings rooms (74%), access to private office space (64%), and personalized call answering (46%). 

In much the way that some firms virtualize their office, others virtualize their staff.  In 2014, 8% of solo practitioners reported using the services of a remotely located virtual assistant and 5% reported using a virtual paralegal.

Cloud Computing

No technology has done more to foster virtual law practices than cloud computing. By moving powerful software and infrastructure off of the PC and onto a remotely-hosted server accessed via the web, cloud computing has allowed professionals of all types to escape their offices and the traditional confines of their businesses. 

In 2014, only 30% of respondents to the Survey reported that they’d used the cloud. The percentage is slightly higher among solo practitioners at 35%. The overall trend in cloud usage had been steadily upwards from 16% in 2011 to 31% in 2013.  It’s unclear why the usage seems to have leveled out from 2013 to 2014, but the number may be impacted by perception. That is, many use the cloud without realizing it. Web-based email is a good example.

The leading cloud-based tools used were Dropbox (49%) and Google Docs (40%). Interestingly, both are fundamental productivity tools and may reflect a baseline comfort with the cloud. That is, when lawyers turn to the cloud they do so for essential functions—not simply specialized tools that might be unavailable in traditional software. On the other hand, it’s possible that adoption of these two tools is high because they’ve both penetrated successfully into the consumer market.

The list of features cloud users enjoy reads much like a list of the benefits of virtual practice. The top features were accessibility from anywhere (73%) and 24x7 availability (68%). In other words, lawyers like having the freedom to practice when they want from where they want.

In addition, 42% of respondents liked the fact that cloud computing enabled them to eliminate IT/software management issues. This directly relates to the IT-centric notion of virtualization. By shifting traditional software and IT infrastructure to the cloud, firms don’t simply transfer the physical technology; they also transfer much of the stress and hassle of maintenance to the cloud provider. Lawyers can concentrate on practicing law rather than moonlighting as IT.

Finally, but importantly, only 12% of respondents who use the cloud mentioned being concerned about the lack of a reliable Internet connection.  Among those who have yet to adopt the cloud that rate drops to just 3%.  Given that one of the early criticisms of the cloud was the unreliability of Internet connections, the fact that so few are concerned about it today is significant.

For a more in depth analysis of lawyers’ use of cloud computing, be sure to see Dennis Kenndedy’s 2014 TECHREPORT article on the subject. 

Conclusion

The last decade has brought significant change to the legal profession. The ascendancy of technology paired with the chaos of a serious economic crisis has changed attitudes about what the practice of law can and should look like. Lawyers are embracing opportunities to be more efficient and competitive while simultaneously seeking more balance in their professional and personal lives. Virtual law practice, in its various forms, fits squarely into that nexus of efficiency, effectiveness, and balance. All lawyers should be watching the trends closely, even if they have yet to take the plunge themselves.

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This article is sponsored by Abacus Data Systems.

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