Virtual Law Firms

What is a virtual law firm?

When people think of a "traditional" law firm, they will probably envision a business which is stuffy and formal, steeped in tradition and occupying offices based in refurbished Georgian townhouses. Most people would probably label a law firm which occupies a purpose-built office or adopts a corporate culture and attitude to business as "modern" or "progressive".

However, a rising trend within the legal sector is challenging these labels – the virtual law firm is becoming the standard for what it means to be a progressive legal business and making everything else look old-fashioned by comparison.

More information about virtual law firms can be found on the website of the leading ‘chambers practice’ Temple Bright based in Bristol.

The Traditional Law Firm

Regardless of what their offices look like, their outlook and dress codes, and whether they have a soft and cuddly approach to HR or are more formal, most law firms fall into the category of “traditional” law firms.

This is because despite the superficial differences and regardless of how much they try to market themselves as 21^st Century and technologically innovative, practically all law firms have a number of core issues in common:

• Working Environment – these firms are all based in physical offices. Typically they will have one central head office which deals with a number of organisation wide issues, such as marketing, finance, compliance and human resources. Whenever these firms want to do business in a different part of the company, they will rent or buy a building and open up a new branch office, complete with secretarial and admin support.
• Hierarchy – whether it follows the time honoured pattern of partners, seniors and supervising solicitors or the more corporate paradigm of directors, managers and team leaders, these firms will all have a clear and rigid structure into which each member of staff must fit.
• Career Progression – in every traditional firm you start at the bottom and you go to the top, following a career progression which is the same for everyone. If you want a higher salary then you have to move up to the next level and take on more responsibility for managing people and dealing with routine administration. If you’d rather spend more time with your clients actually practising law, then you won’t be allowed to progress beyond a certain level and a certain salary.
• Salaries and Profit Sharing – In these firms only a very small number of the lawyers will actually have any stake in the profits which are generated. No matter how senior they might be, members of staff who are anything other than equity partners will be paid a salary and this will very often bear little relation to the fees that they generate. Staff will receive a salary of less than 25% of the fees which they generate, with everything else either going towards the costs of running the firm or being shared between a handful of equity partners.

The Virtual Law Firm

In a traditional law firm, every lawyer who is not an equity partner is there to serve the firm and it is their job to fit in with the firm’s own way of doing things. A virtual law form is a completely different proposition – in this type of business structure the firm exists to serve the needs of the lawyers and is there to facilitate and support them in working the way that they want to. A virtual law firm will seek to arrange its affairs in the manner which is most flexible and least wasteful, and, in striving for this, the virtual law firm will be quick to embrace new technologies.

One of the most striking features of the virtual law firm is that it doesn’t need physical offices or premises. The lawyers work from home or from their client’s own offices, connecting to the firm’s case management software remotely and sharing files and information by email. Although there is still a need for a "head office" where the legal entity is based, a small serviced office or even one of the managers’ houses will suffice for this purpose.

By doing away with a physical office the virtual law firm has eliminated one of its biggest costs. The firm is also able to attract talent from across the county and can quickly and easily build up the kind of national presence which traditional law firms would not be able to achieve without a network of dozens of regional offices. Because of this and many other reasons, virtual law firms are able to offer a cheaper and more comprehensive service and are likely to be the future for legal practice.

In this article, Tim Summers, a founding partner of Temple Bright, discusses the merits of both the virtual law firm and chambers practice as a solution among solicitors seeking more control over their working lives.