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Legal09 January, 2019

The rise of the virtual lawyer: Why virtual law firms are replacing traditional practices

Technology has long been a catalyst for change, empowering organisations to increase productivity and adopt more competitive business models over traditional businesses. In the business of law, "virtual law firms" are redefining how legal practices operate and the services they offer.

In 2017, Lexis Nexis reported that there were over 800 lawyers working for ‘virtual’ law firms in the UK alone. Compared to traditional law firms, virtual firms leverage cloud technology to operate digitally, without a "bricks and mortar" office.

So why are so many solo lawyers and small start-up practices choosing to work in the cloud? This post covers some of the reasons why the concept of a virtual law firm can be a win-win scenario for both lawyers and clients alike.

Traditional vs. virtual law firms

Looking at the day to day operations of a virtual law firm working in the cloud, compared to that of a traditional firm, it's no wonder why it is an appealing alternative:

- Overhead costs –  No more rent, computers, fax machines, printers and filing cabinets means less overhead costs cutting into your revenues. Virtual lawyers using purpose-built cloud-based practice management software are able to run fully functioning law firms from anywhere, on any device, at a fraction of the cost. And unlike on-premise solutions, the cloud solutions are free from associated IT/maintenance costs. In fact, traditional law firms often get bogged down from all these legacy costs, hindering their ability to change. For virtual law firms, having a lean operation means being able to try different fee structures, while providing the same high-quality service.

Client communication – One might assume that virtual lawyers no longer meet directly clients in person and only provide (limited scope) services through an online portal. While it is true that virtual lawyers don't have an office to host clients, they are supported by technology to provide services, often in a more efficient way than traditional firms, while benefiting from more time to communicate with clients for full service representation. It can be difficult for lawyers in traditional settings to find time to communicate with clients outside of email and phone calls. Instead,  virtual lawyers have more flexibility during their work day to meet with clients in more familiar settings, around their schedules, where they can forge stronger relationships.  This all translates into even better client service.

Collaboration with colleagues –  in lieu of walking down the hall to confer with colleagues, virtual lawyers can use cloud based case management software that supports secure online collaboration on cases and documents. In many ways this method is more effective as the most updated versions of case documents, contacts and emails are organised centrally, and access is granted to only the colleagues who need to work on the specific case. Also, with the ability to track tasks and deadlines in the same software for lawyers, you can better manage each others calendars and set up automated workflows to ensure you meet all of your obligations.

Mobility –  traditional firms using on premise enterprise applications can find it difficult to work effectively when not in the office. When you are set up as a virtual law firm, you can literally work from anywhere. This translates into more billable time and of course, revenue.

The way you work  –  To remain competitive, law firms need to keep a keen eye on profitability and overall financial performance metrics and refine the way they work when required. Metrics can help you identify where you need to invest time and energy into changing so that you can enjoy increased profitability. However, as mentioned before, traditional firms can be slow to adopt change. On the other hand, virtual firms tend to be more entrepreneurial and are supported by technology that allows them to be more agile. With more time and energy to implement change, virtual firms can keep up with clients’ rapidly changing needs, maintain a healthy profit margin and ensure the firm is working in the best way possible. In conclusion, building a virtual firm in the cloud is a great alternative to a more traditional firm thanks to reduced overhead costs, increased agility, mobility, flexibility and time enabling lawyers to run a more competitive firm and deliver quality service that meets client demands.

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