Recently there has been an increase in lawyers working for virtual law firms. The promise of greater flexibility and efficiency has seen the model grow more mainstream and the concept widely popularised. With the legal industry already seeing changes through increasing competition and altered models, it might be wise for firms to question what the industry might look like in the near future. Then they should adapt accordingly. A vital element of this may be the inclusion of virtual work.
What is a virtual law firm?
A virtual firm is an official legal firm that doesn’t operate from one physical office, but satellite offices or employees’ homes. Virtual law firms usually fall into one of two categories: a framework whereby employees work from home or one using a virtual office network. Which model is used typically depends on the size of the firm, with smaller businesses preferring remote working and larger ones favouring satellite offices. Keystone Law is an example of a successful virtual law firm. It has 350 lawyers and, in 2019, saw a 35.1% revenue increase alongside a 56.8% increase in adjusted pre-tax profits.
Virtual law firms have different benefits and drawbacks that are all worth considering if you are thinking about changing your business model.
What are the benefits of a virtual law firm?
- Reduced running and office costs: overheads such as rent, furniture and office materials are no longer a consideration, freeing up funds to use for other requirements.
- More control over working hours: by offering flexible working hours, lawyers benefit from a better work-life balance. They can also access a more diverse client pool of business who don’t keep traditional working hours.
- More control over location: as virtual law firms are not limited by geographical location, they can hire a more diverse collective of lawyers who can reach a broader client base.
- A more significant share of earnings: reduced overhead costs saves virtual firms money that can be passed on to its employees.
- Increased scope for small businesses: less geographical restriction means that smaller firms can operate on a global scale without compromising their stability.
- Happier employees: old or unreliable technology can frustrate employees. Virtual law firms will have up-to-date technology, which will have a positive impact on employee engagement.
What are the drawbacks of a virtual law firm?
- Poor communication: if virtual law firms rely entirely on online communication, it can be challenging to arrange face-to-face meetings. It can then lead to compromised communication with clients.
- Increased tech costs: while reduced overheads may save firms money, they will have to invest in technology to allow virtual working.
- Time-consuming set up: setting up virtual offices or networks can be complicated and time-consuming.
- Confidentiality concerns: if the virtual law firm is using shared office spaces rather than remote working, it can compromise client confidentiality. There is also the worry that a client may be less likely to trust an online service than a face-to-face meeting. However, video calls are becoming increasingly common, so this is becoming less of a concern.
- Awkward transition: lawyers used to the normal routine of the law profession may find it difficult to adjust to the flexibility of virtual law firms. Working from home with no limit on hours may encourage an unhealthy work-life balance, leading to burnout.
The virtual law firm model brings both advantages and disadvantages. While representing a significant learning curve for lawyers, it also presents many exciting opportunities for progression and development.
IT security is essential for virtual firms, both to preserve client confidentiality and to ensure a productive work set up for employees. Want to learn more? Get in touch to find out how we can help you guarantee a secure digital set up for your virtual law firm.