In the Media

Raising the roof

PUBLISHED June 16, 2006

Some lawyers are embracing technology to create firms that have no offices. Rupert White profiles the virtual law firms offering clients something new and potentially cheaper

Just over a year ago, Alyson Jackson was an in-house counsel for BT, wrapping up a huge global outsourcing deal for the telecoms giant. She and her colleague, Tara Trower, found themselves once more in the office after the witching hour ? something most commercial lawyers will recognise ? when they had an idea.

?It?s one o?clock in the morning and you?re thinking ?this is no way to live?,? Ms Jackson recalls. ?And we sort of developed a hypothetical business plan, which eventually became reality.?

What Ms Jackson and Ms Trower decided to do was to set up a virtual law firm ? The Legal Desk. It was an easy decision to make, she says.

?Not only is it good for us, but also it?s a good business model that we can offer clients, and we knew there are other lawyers out there who would jump at the chance of being involved. We gave up a lot of job security for it, of course.?

The Legal Desk is not the first of its kind. But what is a virtual law firm? Like most new media-age ideas, it is not the easiest to pin down. Everyone involved in a virtual law firm seems, however, to manage to agree on what it is not: it is not a chambers.

?A solicitors? chambers consists of a number of independent solicitors all working under one roof. A virtual network consists of a number of solicitors and paralegals doing work for a single firm, but not under the same roof,? says Lucy Scott-Moncrieff, managing partner of London firm Scott-Moncrieff Harbour & Sinclair, or ?Scomo?. She adds: ?Everyone in this firm who has contact with clients has a contract with the firm and is covered by the firm?s insurance in the work that they do.?

Generally, virtual firms involve a group of lawyers working from home offices to an agreed set of company policies, using a case management and/or practice management system over the Internet, with secure connections. The lawyers need not be in the same part of the country as one another or the registered office. The distributed nature of this type of firm could be seen to have innate problems ? for example, there is no high street presence to allow customers to drop in. Scomo does have a small office for support staff, but The Legal Desk does not.

Scomo mainly does legal aid work, which Ms Scott-Moncrieff says fits well with the layout of a virtual firm. ?One of the reasons why it was easy for us to start working in this way is that most of our clients cannot visit us in the office, as they are either detained in psychiatric hospitals or serving prison sentences,? she says. ?However, even if it were necessary to see people in the office a lot, I would have thought that this could be organised through an efficient diary system and renting an interview room by the hour or by the day. Many high street firms have unused capacity, and might be quite pleased to offer this service.?

But the reality is that the work targeted tends to influence the shape of the virtual firm. Scomo is a 40-fee-earner practice in which each lawyer runs a micro-business under the Scomo brand, buying in secretarial and office services. The Legal Desk is a small firm of commercial lawyers that, Ms Jackson says, eventually might be able to offer ad hoc in-house legal support. The third point on the triangle of possibilities is NetworkLaw, a virtual firm set up to take on commercial work, but organised almost like a ?normal? law firm.

Former barrister Marcus O?Leary set up NetworkLaw in February and now has 15 fee-earners and, he says, 90 job applications a month. Unlike Scomo, NetworkLaw provides services to fee-earners like a law firm but funds them out of a cut from fees ? similar to a bricks-and-mortar law firm.

?What we?re really trying to do is make [the lawyers] feel really part of the firm ? though they?re Schedule D [self-employed for tax purposes], it?s like having a Schedule D employee, so they get everything that the internal [employee would get],? explains Mr O?Leary.

But virtual law firms are not a charity ? the advantages have had to be there, and achievable. The benefits sit on another triangle ? advantages to the client, advantages to the firm, and what the legal professional gets out of the arrangement. The main pros are greatly reduced overheads, flexible working arrangements and potentially reduced fees.

Mr O?Leary, for example, can pass the overhead savings on to the client without penalising the fee-earner. ?[Lawyers] can work from their own home office environments and do the work for their clients, but because the occupancy costs to [the firm] are so much lower, instead of charging their old charge-out rates, they can come in at ?190, so an in-house lawyer at a big company thinks ?I don?t have to go to a London firm and pay the old charges ? I can get the same person who was working at that firm for half the price?.?

This direct correlation of fee reduction and cheaper overheads is attractive to firms that understand they are buying information products and skills, not a plush pile in Pimlico, says Ms Jackson.

?I went to meet a new client this week and he was having a general moan about the plush marble offices of City law firms and he said: ?You walk in there and you know what your money?s going on.??

The flexibility also means the possibility of proper career continuation for women ?who can be lost to the law once they have children and can?t go back?, says Mr O?Leary. Indeed, the proof is in the pudding: half of the firms contacted for this article are run by women.

Virtual law firms are also a manifestation of how the latest technology can create substantively different modes of traditional business. The standard technologies used are virtual private networks and adapted case/practice management systems that allow fee-earners, administrative staff and consultants, such as accountants, to work within a virtual ?building?. Many go further ? The Legal Desk, for example, uses voice over IP (VoIP) technology Skype to remove the cost of calling between partners, as well as instant messaging. NetworkLaw uses a hi-tech solution based on Citrix, so the firm?s case management system can be served to pretty much any device, anywhere.

But not every virtual law firm stays virtual. The life of Jagvinder Kang, co-founder of the Technology Law Alliance, went from bricks and mortar to the virtual world and back again.

?As our client base quickly grew, attracting heavyweight clients, and we increasingly found ourselves advising on the types of multi-million pound transactions which we were accustomed to advising on at our previous law firm [Wragge & Co], we found that our new clients had an expectation that we would have an actual physical presence in the main cities in which they worked,? he says.

?In our experience, a virtual law firm approach is useful during the initial set-up aspects, but a non-virtual approach is what helps achieve credibility, brand value and a real presence when working with the calibre of clients that we are now used to working with.?

Not necessarily so, says Ms Jackson. ?I think the world is changing, and if your client places an importance on [having a ?physical? firm] then they?re probably not the right client for your business anyway.?

So is the future virtual? Perhaps ? virtual law firms can provide havens for embattled legal aid solicitors, entrepreneurial sole practitioners, mothers who want to keep their careers and tech-savvy legal professionals. But they are also the first expressions of the legal profession working in a brand new way, and as such cannot be ignored.