The coming of the much-vaunted information age, improvements in digital and internet technology, and the increasing requirement for law firms to diversify and innovate over the last ten years has led to a series of interesting experiments in business models for lawyers. Law firms (as demonstrated by the success of such firms as Excello Law, Setfords Solicitors and Keystone Law) are increasingly moving to a virtual (or dispersed) business model at the expense of bricks and mortar (where a firm would have an established office).

Costs and benefits

The main benefits that my firm, Redmans, have experienced in our move to the virtual law firm model are more responsibility and equality for our employees; a vast decrease in overheads; an increase in revenue and much greater flexibility.

The firm’s employees now work – most of the time – without any direct, over-the-shoulder supervision but are still expected to work to the deadlines set. This entails a greater level of individual responsibility but, we have found, also motivates our employees to provide the requisite level of services. Further, the fact that our employees can work from anywhere means that they can dovetail their work with, for example, their childcare responsibilities.

The move away from a traditional bricks and mortar office has also meant that we’ve been able to significantly cut our overheads, particularly that of rent. We now pay a nominal rent (approx £60 a month) to rent a virtual office with MWB offices in Richmond, London and Monument, London. As well as a substantial decrease in the amount that we have to pay to rent premises, we have also seen great reductions in the amount we’re paying for our broadband connections (as we’re not subject to the monopoly prices charged by the landlord in a traditional office environment), for our telephone services (we now use the inexpensive VOIP) and our practice management system. One of our main expenses now (excluding wages) is online advertising.

We have also experienced an increase in revenues due to our new focus on the online legal market, as opposed to the traditional legal market.

Finally, we now have greater flexibility for both the law firm in general and for our employees. We have implemented practices to better monitor our financial situation and to track the progress of cases and we can adapt to meet the changing demands of the market. Our employees have greater flexibility in relation to where they work from, how they work and the hours they work. They can work from pretty much anywhere (as long as they have an internet connection) and can work (within reason) as many or as few hours as they wish, as long as they meet set targets and deadlines.

The main costs of a virtual law firm are the potential difficulties that firms may encounter in altering their business model and embracing unfamiliar working practices and technology. In my opinion, the intrinsic benefits of a virtual law firm far outweigh the logistical and emotional disbenefits, providing that the working practices of the virtual model are sufficiently accountable. Further, transitioning to a virtual model doesn’t have to mean ripping up the existing business model; you can choose to integrate as many or as few virtual services while still, for example, retaining a traditional office.

How to implement your virtual law firm

You need:

  • a virtual office location
  • a virtual call centre
  • a VOIP telephone system
  • case management (potentially cloud-based)
  • financial management system (ideally cloud-based)
  • a cost-effective marketing strategy.

For your virtual office, you will want a location which has some gravitas and you’ll normally want a location with sufficiently large meeting rooms and transport connections to allow your fee earners to meet clients when necessary. An additional consideration is that you’ll want to set up the office within a reasonable distance of key fee earners – there’s no point setting up an office in London if your nearest fee earner is in Leeds. We use MWB to provide our virtual office space and we find them to be efficient, pleasant and helpful. However, there are other providers available, such as Regus, Servcorp and W1 Office.

A virtual call centre, although not strictly necessary, is very helpful. Our fee earners are often busy attending on clients, visiting courts or drafting complex documents and it is therefore helpful to allow clients to leave a message with the virtual call centre instead of on the fee earner’s voicemail. It also means that all initial enquiries to the firm are answered promptly, courteously and efficiently – you’ll never miss another lead. We use Jet Virtual. There are also other providers such as Message Direct, Moneypenny and JAM.

Voice Over Internet Protocol (VOIP) allows your staff to receive calls to their landlines through the internet and means that they can pick up calls pretty much anywhere, no matter where they are in the world (as their landline isn’t rooted to a particular location). We use Voipfone to provide our line rentals, Zoiper Biz as the software to use the VOIP connection on our staff’s desktops and Acrobits to allow them to use their VOIP telephone on their mobile phones (a 3G connection is needed for this). We’ve found Voipfone to be absolutely excellent but there are many other providers that can provide such services.

A good case management system is essential. We use Credenza and it does the job perfectly, apart from a lack of document management facilities. These days, case management systems from just about all the main suppliers can be operated in a hosted environment (ie in the cloud) so you do not have to manage the central system.

A financial management package is essential to allow you to track the income and expenditure of the firm. This allows you, for example, to see which departments and sources of work are under- or over-performing. It also (crucially) allows you to keep track of those pesky clients that haven’t paid their bills. We use Quickbooks Online and love the fact that it is based in your browser. However, other providers are available.

Finally, you need a marketing strategy – no business can survive without clients. Redmans used to rely on referrals from claims management companies but we got fed up with the cost and administration of this so decided to build and market our own websites. We now have more than half a dozen websites which focus on specific areas of work, from a site devoted to compromise agreements to general employment enquiries to legal representation in unfair dismissal cases. We have an in-house developer (a fee earner in the firm) who develops and markets the websites so our main cost is the time to create and maintain the sites. Apart from this, we pay nominal fees for the domain names and hosting for the sites. We can recommend Namecheap for the purchase of domain names and Just Host Me for UK hosting.

Conclusion

The potential benefits of migrating from a traditional bricks and mortar law firm to a virtual law firm model are huge. You can slash overheads, increase revenues, motivate your staff, stay ahead of the changing legal market and meet changing market conditions. However, you don’t have to go the whole hog with the virtual model and you can cherry-pick which parts of the virtual model you wish to implement in your existing practice.

For example, if you don’t wish to move to a dispersed model then you can keep the office but sign up a call centre, implement VOIP technology, move to a more flexible case management system and financial management system and/or refocus your marketing. Further, if you wish to retain an office then there’s nothing to stop you implementing some form of hot-desking policy where staff members work from the office or from home as instructed. My firm belief, though, is that firms which don’t adapt to new technologies and the changing legal market will die. It may not be tomorrow or in ten years’ time but the winds of change are coming.

Chris Hadrill is a specialist employment solicitor and budding social media/internet entrepreneur. He has set up a number of specialist websites for his firm, Redmans, including, for example, a website for specialist employment law advice, as well as blogging at www.chrishadrill.co.uk.

Email chris.hadrill@redmanssolicitors.co.uk

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