As Traditional Firms Pull Back, Virtual Firms' Opportunities Could Be Growing
With little overhead and a growing number of job applicants seeking refuge from the layoffs, furloughs and salary cuts, virtual law firms may be built to endure a worsening economy. But can they keep that edge in a post COVID-19 world?
April 16, 2020 at 10:00 AM
4 minute read
Virtual or dispersed law firms have caught some attention lately, given that the cloud-centric and often remote approach they regularly take towards legal work has been indefinitely foisted on more traditional brick-and-mortar firms adapting to COVID-19 pandemic. But aside from experience with remote working, are virtual firms any more resilient to a virus-inflected economy?
Nationwide shutdowns and stay-at-home orders have already started to take their toll on the legal industry, with law firms seeing layoffs, salary freezes and furloughs.
However, the virtual firm of FisherBroyles doesn't have many associate salaries to cut, instead focusing its growth efforts around more experienced, partner-level attorneys. Triple-teaming matters with superfluous numbers of associates is seen as another unnecessary expense, right up there with more traditional overhead such as large office spaces.
The firm has no plans to institute furloughs or pay freezes. In fact, co-founder Kevin Broyles thinks that the economic downturn could actually drive more new partners to the firm, attorneys who may currently be experiencing some of those very same economic hardships inside more traditional practices. And with new partners might come new business.
"A lot of times clients are hiring a firm because they have a trusted legal adviser at that firm. And if that trusted legal adviser goes from Firm A to Firm B, a lot of the times the client is going to go from Firm A to Firm B," Broyles said.
Other virtual firms may also be seeing an uptick in new job applications. Such is the case with Culhane Meadows Haughian & Walsh, where managing partner Grant Walsh said one of the chief impediments the firm has faced with regards to growth and recruiting has eroded over the last few weeks. Stuck-at-home attorneys who may have previously been reluctant to work virtually are finding that they enjoy conducting business from their couch.
"A lot of recruiters were hesitant to propose cloud-based firms to their clients that were at traditional firms. But now all of the sudden they are coming back around and saying, 'Hey, I've got clients who are specifically asking can you help me find a firm where I can do more of this work-from-home stuff,'" Walsh said.
Still, virtual firms can't always count on new partners bringing old clients along for the ride. While some clients may be loyal to an individual attorney, others may be more attached to the reputation, prestige or even comfort-level of a firm itself. Jarno Vanto, a partner at the brick-and-mortar firm of Crowell & Moring, argued clients may be even more reluctant to venture outside of their legacy firms in the midst of COVID-19.
"Clients that experience distress in this crisis now rely on their old go-to firms, which makes new business development for nontraditional/virtual firms that much more difficult," Vanto said.
He also noted that since even traditional law firms have been forced into the position of working remotely for the foreseeable future, virtual firms might no longer have any distinct or inherent advantage in terms of how they handle the actual day-to-day legal work that comes their way. For example, the COVID-19 crisis may be pushing traditional law firms to adopt knowledge or enterprise management platforms and other efficiency friendly technologies.
The real test may come post-COVID-19, as clients, their legal counsel and the economy adapt to a new normal—or fall back into old habits. Clients might no longer tolerate traditional firms that are unable to replicate the flexibility of virtual law offices.
"This entire experience is probably going to even put more of a microscope on those firms that are still stuck in the old ways and not willing to adapt and accept technology as way to become more efficient," Walsh said.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllLaw Firms Mentioned
Trending Stories
- 1SEC Issues $6.75M Fine Against Financial Firm Led by Trump's Choice to Lead Commerce Dept.
- 2O'Melveny Secures Global Clearances for Korean Air-Asiana Merger
- 3'Extremely Troubling:' Trump Defense Team Attacks Prosecutor's Novel Arguments Against Dismissing Case
- 4Litigation Surge: Drugmakers Launch Flood of Suits to Halt Generics
- 5State Appellate Court Affirms $2.75M Jury Verdict in Negligence Suit Against Railroad Co.
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250