From what one reads these days, a “virtual law firm” is at the same time both a groundbreaking new paradigm and merely an extension of the telecommuting trend that started 15 years ago. To some degree, both the champions and the naysayers are right. In some ways a virtual law practice is novel and new and in others it is traditional to its core.
To begin with, what is a virtual law firm? While there is no universal definition, most people think of a virtual law firm as a firm that operates without a traditional, physical office space shared by all the firm’s members. Large firms have existed with remote offices for a long time, but only very recently have firms adopted a model where all or a majority of the firm’s attorneys do not share office space, and collaborate by means of computer technology. Many see this work paradigm as providing an improved practice of law for both lawyer and client.
Virtual firms will typically have dramatically lower overhead than traditional firms of the same size and complexity of practice. Savings come primarily from the fact that (1) these firms do not have to support physical offices in a downtown location and (2) because of their distributed nature, can typically rely on newer and more cost-effective networking and computer technology. Many of today’s virtual law firms advertise that they operate on an advanced technology platform and often rely heavily on web conferencing and other technological tools to keep in touch with each other and with clients.
Law firms are formed and evolve for all sorts of reasons. Many attorneys at traditional law firms value the premium office space and expensive furniture and artwork in their day-to-day experience. Typically what leads an attorney to a virtual firm model is a preference for a practice without these overhead expenses. This same approach will often lead founders of a virtual firm to focus on efficiency throughout the firm, including creating a technology platform and administrative structure designed to be efficient and cost effective.
Practicing in a virtual law firm environment also has practical and tangible benefits to the environment and the attorney’s personal lifestyle. For instance, most virtual lawyers work from home, which means they have no daily commute to the office. Eliminating the daily commute saves thousands of gallons of fuel and decreases vehicle emissions. It also allows the attorney to be close to his family and spend time that might otherwise be spent on commuting doing things he enjoys. Eliminating the common office also means eliminating the need for the office building. In addition, in most instances, virtual lawyers work out of home and use existing space that would already be heated and cooled. With building construction and operation accounting for up to 50 percent of worldwide energy use and carbon emissions (almost 40 percent in the U.S.), this could have a significant impact as virtual firms achieve more widespread acceptance.
Because the attorneys are not physically proximate, typically a virtual law firm has to be more reliant on electronic communications. With the advances of modern technology, the practice of sending paper-based interoffice memos is already fading. The switch to a virtual office model eliminates this practice entirely. All intrafirm communications happen by email, phone or videoconference. The same goes for the practice of maintaining paper-based client files. Virtual attorneys often maintain electronic files for their clients. This advance eliminates not only the excessive use of paper, but also all of the truck runs to off-site storage facilities to file and retrieve these files. Costs of copying are eliminated and because electronic documents are text searchable, attorneys can have any documents they need at their fingertips at all times.
Eliminating office space dramatically decreases overhead and it is this evolution in the financial structure of the firm that produces the most dramatic changes. Reducing overhead, or placing overhead expenses in the control of each individual attorney allows virtual firms the ability to give their attorneys dramatically greater freedom and control over their billing structure and their ultimate compensation. Many virtual firms have no billable-hour requirements or minimums. Virtual firms also typically structure attorney compensation using a set formula based on attorney collections for time they personally bill and for clients and projects they manage, and can often offer attorneys greater flexibility in structuring alternative fee arrangements because there is less concern about meeting monthly overhead costs. In many virtual firms, attorneys determine when they work and how much they work, with a large portion of the attorney’s compensation going directly to the attorney. Not only does this improve quality of life for the working attorney by reducing the number of billable hours needed, but it also allows attorneys at virtual firms to be more nimble in responding to client requests for alternative fee structures.
Autonomy of attorneys
Virtual attorneys determine where they work, when they work, how many hours they work, the clients they work with and their billing rate. Because virtual attorneys have flexibility and control over their work space, their work hours, their clients and their billing arrangements, they are better able to balance their professional and personal lives. Because a virtual firm is typically structured to provide all needed infrastructure to residential or other remote locations, the attorney is often able to practice from locations typically unheard of in the traditional firm. For instance, partners at virtual firms often take long vacations to foreign countries with their families, but because of VoIP phones and Internet-based document systems, they can practice in an environment largely similar to their regular office.
Virtual attorneys exercise complete control over their practice, so in a sense, every virtual attorney has an “alternative work schedule.” Because attorneys work in a distributed fashion, a virtual firm eliminates office “face time.” Not only do virtual attorneys determine when they work — they also determine where they work. Attorneys, subject to the demands of their clients, work at times convenient for them. Empowering attorneys to work where and when they want allows attorneys to be as efficient as possible in their practice of law, which in turn allows attorneys to pursue personal interests, spend time with family and friends, volunteer in their community and still practice law at the highest level.
Quality of Work and Closer Client Relationships
By reducing the pressure to meet monthly overhead targets or billable hours requirements, virtual firms have a much lower need to take on a particular client or project or risk consequences from turning down an assignment.
Because of the distributed nature, attorney oversight and training tends to be more difficult. As a result, a key hallmark to a virtual firm is low attorney leverage and a firm made up of experienced attorneys.
The virtual model both forces and facilitates closer attorney-client relationships. Under the low-leverage model followed by many virtual firms, all of the firm’s attorneys directly interact with clients out of necessity, but in a practical sense, going virtual frees up attorney time to focus on better client interactions. Many virtual attorneys go out of their way to be more responsive to their clients in order to counteract any potential concerns that a virtual attorney is ephemeral or transitory. It is ironic that clients regularly report better access to their virtual attorneys then attorneys at traditional firms. This renewed primacy of the attorney-client relationship in a virtual firm in many ways marks a return to very traditional values of the practice of law.
A low-leverage practice also has benefits for the attorney. When an attorney directly touches all aspects of a client representation (from drafting the contract, to negotiating with the opposing party, to counseling the client on decisions), the attorney naturally evolves as an attorney much faster than any large firm training program can accomplish.
Attorney Quality of Life
Virtual attorneys repeatedly say that working virtually increases their quality of life by giving them more control over their practice. Eliminating minimum billable hours, office face time, office politics and compensation uncertainty empowers skilled practitioners to focus on practicing law for their clients. In a very real sense, virtual attorneys answer to their clients first, to themselves second and to their firm third. Traditional firms often reverse that order.
Having control over their practice gives virtual attorneys control over their life. When the needs of family crop up, virtual attorneys are able to attend to them without obtaining firm approval. Eliminating commuting time and office face time adds several hours to their day. Firm communication platforms allow them to travel while keeping up with their clients’ needs. Having a community of lawyers in remote locations allows them to collaborate and tap into the specialized expertise of their partners. While no firm can provide the ideal solution for all clients or all attorneys, virtual firms give the attorneys who work at them the feeling of having all of the advantages of being in a firm with none of the traditional burdens.
David Goldenberg is a founding partner of VLP Law Group and former member of the firm’s executive committee. He counsels a broad range of clients, many of which are growth-oriented technology companies, on contractual and corporate matters, as well as individual executives on employment matters. Lisa Stone is a member of VLP’s energy, natural resources and environmental law practice. She represents leading energy, retail, chemical, petroleum and industrial companies in environmental and energy regulatory matters.