- Is a virtual law office legal?
- How to Set Up a Virtual Law Office
- 8 Benefits of a Virtual Law Office (Infographic)
Q: What is a Virtual Law Firm?
A: A Virtual Law Firm is a law practice that doesn’t utilize a traditional brick-and-mortar office. Instead, staff members work remotely and communicate with each other, and with clients, through technology and online collaboration tools.
According to our recent study, Starting a Virtual Law Practice Can Save $250K/Year
Like many industries, the legal sector experienced its fair share of challenges during the events of 2020.
In the early phase of the pandemic, law firms across the US were faced with stalled cases, locked-down courts and shuttered businesses. Law firms were left scrambling to conserve cash and mitigate the fallout of the coronavirus crisis.
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Demand for legal services dropped a median of 5% in April 2020, and the average U.S. law firm billed 27% less in May 2020 than in May 2019.
Interestingly, this was a unique situation for the law industry.
In previous recessions and crises, law firms were largely immune from economic pressures and in some cases, revenues actually increased.
This time however, law firms were forced to react.
The result?
Sweeping cost-cutting measures including furloughs, pay cuts, and layoffs.
For solo lawyers without staff, challenges typically centered on financial concerns and work/life imbalance.
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A survey of solo and small legal firms by New York City Bar found that only 16 of 29 members polled had the financial resources to endure the Covid-19 crisis, while others were banking on Paycheck Protection Program (‘PPP’) loans to see them through.
Many of the solo practitioners and small law firms polled in 2020 were expecting a lower caseload when they were able to return to work.
These pressures, coupled with the struggle of balancing family life while working from home, created significant challenges for small firms and solo lawyers during the pandemic.
Many are learning from these challenges and are now making longer-term changes to company operations.
Specifically, cost commitments.
When the events of 2020 took hold, one of the first priorities for all businesses was cutting costs. This led law firms to look at the largest overheads in their business, which typically comes down to two things:
The Workforce & The Workplace.
The Workforce: Law Offices See Reduction in Staff
In any downturn, staff often take the first cost-cutting hit.
That’s why so many law firms were forced to make pay cuts, furloughs, and layoffs.
But within the law industry, any company that makes redundancies or pay cuts will carry this burden on their reputation, potentially making it more difficult to recruit or retain staff in future.
Of course, it also means companies have to let some of their best and most talented people go.
In order to avoid this, companies are now looking at reducing one of the other major overheads in a law firm: the workplace.
The Workplace: Law Offices Embrace Flexible Workplace Strategy
For those tied into long-term office leases, cutting real estate costs doesn’t happen overnight.
In fact, it might not happen at all.
That’s why many law firms are looking to flexible workplace strategies to enable them to cut costs as a future-proofing measure.
“Longer term, many firms will be looking to reduce expensive office space as soon as they are able to, invest significantly in technology, and reorganise offices to cater for more flexible working environments and practices.” – Personnel Today (November 2020)
Lawyers seeking to cut costs and work more flexibly are making the shift to remote work.
Enter the virtual law firm.
What is a Virtual Law Firm?
A virtual law firm is a law practice that doesn’t have a traditional brick-and-mortar office.
Instead, staff members work remotely and communicate with each other, and with clients, through technology and online collaboration tools.
‘Working remotely’ means staff may work from home, or from a flexible office space close to their homes — such as a coworking space or on-demand workspace (i.e. a drop-in office space with hourly or pay-as-you-go options).
In-person meetings are conducted in conference rooms that can be booked on an as-needed basis, or in clients’ offices.
Some lawyers meet clients in informal places such as coffee shops or restaurants, although even outside of the pandemic, discussing sensitive legal information in public places is considered inappropriate.
A virtual law office allows law firms — particularly small and solo law practices — to minimize costs with the help of cloud computing and IT infrastructure.
However, going ‘fully virtual’ isn’t always recommended.
That’s because law firms almost always need a physical location to meet with clients and train or mentor new staff. They will also need an office address to build or maintain a presence in a specific market, and to manage mail.
That’s where a virtual office comes in.
What About the Physical Office?
A virtual office provides a recognized business address, a place to receive mail, and access to meeting rooms or office space by the hour.
Even though it’s known as a ‘virtual’ office, it is still a part of a physical office building.
That means you can book physical office space for important meetings and events by the hour or by the day, and you won’t have to pay rent for space that you aren’t currently using.
You can use your hourly space for things like:
- Depositions
- Mediations
- Team meetings and updates
- Client meetings
- Culture-building exercises with your team
- Small conferences
- Thought-leadership events and roundtable discussions
- Interviews
- Brainstorming
- Quiet, focused work
In short, a virtual office provides the essentials you would expect from an office — without needing to pay for full-time office rental.
Read more: What is a Virtual Office and How Does it Work?
Virtual law offices are particularly beneficial for small and solo law firms
If you run your business from home, a virtual office enables you to attach your business to a recognized office address in a major city, which helps draw new clients.
This allows you to maintain a sense of professionalism, and it sets a positive first impression for prospective clients who look up your business online.
When you need access to physical office space, you can simply book a time and schedule your meeting. You can use this space for mediation rooms, deposition rooms, or anything else you might need to run your firm smoothly.
Many virtual office companies also offer additional services, such as mail forwarding, live receptionists, a VoIP phone system with a business number, and more.
Can lawyers work remotely?
For much of their work, yes they can.
Of course, attending court is usually an in-person experience (unless it’s a virtual court). But tasks like drafting and reviewing legal documents, fact-checking, and keeping clients up-to-date can be carried out remotely.
This shift was happening before the pandemic. But the events of 2020 served as a catalyst to accelerate this trend.
Numerous studies suggest this trend will continue.
After a year of remote work, staff have formed new working habits and expectations — and many are enjoying the huge time and money savings by avoiding a daily commute.
This is prompting a shift to permanent remote or hybrid (semi-remote) work.
In a survey of small and mid-sized law firm leaders (June 2020), 72% said they expect they will need less office space in the future.
Is a virtual law office legal?
For lawyers in a handful of states, such as Delaware, it is prohibited; they have a Bona Fide Office Rule that requires attorneys to maintain a physical office in the state.
However, most states allow virtual offices for law firms in recognition that the majority of law services can be carried out remotely using technology. For example, New Jersey lifted the ‘bona fide office rule’ in 2013.
Indeed, an article published in 2019 on the American Bar Association stated that “virtual is the new law firm reality.”
How does a virtual law office work?
Lawyers work remotely, often from home or in a coworking space, and meet clients in offices or meeting rooms on an as-needed basis.
Many lawyers that work remotely also use a virtual office address, which enables them to maintain a city presence while they work from anywhere.
What does this mean for the traditional law office?
Some traditional law firms will always have an office, albeit with a smaller real estate footprint than before the pandemic.
Others are switching to a virtual law office.
Why is ‘virtual’ the new law office reality?
It comes back to cost-cutting and operational efficiency.
Office rent is normally the second-biggest expense for law firms after human resources and payroll.
By using a virtual law office, law firms can cut down on this expense and reduce the need to lay off talented staff members.
Advances in technology coupled with greater appreciation of using remote collaboration tools — such as video calling technology, shared files, online chat and project management programs — mean lawyers don’t need to sit in a central office to get their work done.
What’s more, law firms that reduce overhead can pass on the cost savings to their clients.
How much money will I save if I switch to a virtual law office?
By working remotely and embracing a virtual office, law firms can significantly reduce the expense of office rental and pass on these savings to their clients.
Think about this: What type of lawyer is most in demand?
Based on recent findings, it’s family law.
We’re not talking big-revenue corporate clients.
Family law involves individuals from all walks of life, and the opportunity to save a little extra on legal bills by working with a virtual lawyer could easily sway the decision in your favor.
So how does a virtual law office work, and what are the pros and cons?
Let’s take a closer look.
8 Benefits of a Virtual Law Office
1. Drastically Reduce Costs and Save Money
The big benefit is reducing the cost of office space.
A typical law office spends 45 to 50% of a client fee on office expenses, such as office rent, non-lawyer salaries, telephone, supplies and other facilities.
By working remotely and embracing a virtual office, law firms can significantly reduce this expense.
For instance, a standard virtual office through Alliance starts from $49 per month and a business number with a VoIP phone system is $30 per month.
2. Flexible Work Style
By working from home, or near home, staff reduce commuting time and expenses. This enables staff to have more choice over where and how they work, which can lead to better work/life balance, engagement, and performance.
3. Safeguard Your Home Address
Rather than publishing your home address on your website or on public documentation, you can use your virtual office address instead.
4. Separate Business and Home Mail
With virtual office mail forwarding, you can avoid getting business-related mail sent to your front door. This increases privacy and security, which is important if you’re a lawyer.
5. Build Trust Through Professionalism
Running a law office from home might be practical, but it doesn’t look professional. That’s why a virtual office address is so valuable to small businesses — it demonstrates authenticity, which helps build credibility.
6. Office Space When You Need It
On the practical side, while working from home comes with certain space restraints, lawyers can utilize workspace on-demand in their virtual office anytime they need to work in a quiet space or meet with clients.
7. Serve More Clients
A virtual office enables law firms to serve a wider range of clients by not being tied down to one specific location. Instead, companies can target clients in multiple peripheral locations without actually establishing a physical office there.
8. Reduce Carbon Emissions
A virtual office is a more eco-friendly business approach than a traditional office. Less commuting to a central location and fewer in-person meetings means fewer cars on the road, and less pollution.
Downsides of a Virtual Law Office
Of course there is no such thing as a perfect solution, and you may come across certain disadvantages of a virtual office.
For example:
- Isolation
Working remotely can be isolating. Rather than working from home or from a private office suite, consider utilizing a shared coworking space from time to time. - Lack of networking opportunities
Working independently, particularly when working remotely, can shut you off from your peers. Make a habit of attending industry functions, or work from a shared coworking space a few hours per week. This enables you to work in a community of like minded professionals, which is beneficial both for professional contacts and for social interaction. - Recruiting
Law is a traditional industry, and many established lawyers may prefer working for an office-based firm rather than a remote employer. This could make it difficult to find new talent when you expand. However, offering flexible work without the constraints of geography enables you to recruit from a much larger talent pool.
How to Set Up a Virtual Law Office
Whether you’re making the switch from a traditional setting to virtual, or you’re setting up a virtual law office from scratch, here are some tips to smooth the journey.
First, create — or revisit — your business plan.
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1. A Business Plan Tailored to a Decentralized Organization
A virtual model is significantly different from a traditional brick-and-mortar setup. For instance, rather than paying for an office lease and onsite facilities, you’ll divert that investment to a solid IT infrastructure to enable your business to run virtually.
This guide by Clio explains the elements you’ll need to include in your virtual law firm business plan. Here’s an overview:
2. Establish an Organizational Culture
One of the key action points when setting up a virtual law firm is, how do you build and maintain company culture?
This is important when hiring staff and building a client base.
Here’s a handy definition of organizational culture:
Company culture is the shared values, attributes, and characteristics of an organization.
As a sole practitioner, you are in almost full control of your culture.
As an employer, you need to work with your team to cultivate a positive culture.
Ultimately, positive culture helps people to find real value in their work, which leads to happier and more engaged employees.
Another key element when setting up a virtual law office is technology.
3. Standardize Cloud Computing and Collaboration Tools
Remember that a distributed team will need secure access to files in a digital setting. Cloud computing will enable you to host and access shared files easily, and work on documents together in real time.
4. Implement Automation
Read more: Automating Customer Service for a Remote Business
Finally, get used to collaborating with online tools.
5. Embrace Video Chat like a Pro
In particular, video conferencing will take over a lot of traditional in-person meetings, so you’ll need to become familiar with hosting video calls, presenting information on your own screen, and working on shared documents in real time.
When video calling, remember that you should present yourself as if you were attending an in-person meeting.
6. Register for a Virtual Office
Now that you’re ready to set up a virtual law office, it’s time to register for a virtual office.
Choose a reputable company like Alliance Virtual Offices, who can offer a reliable support network of experienced advisors, a huge range of virtual office locations, and market-leading technology.
The premium plan, ‘Platinum Plus’, offers up to 16 hours of inclusive meeting or office use per month.
Alliance also has a range of optional add-ons to support your virtual law office setup:
In addition, flexible workspace is available to book on-demand or on a subscription basis.
Lawyers can sign up to a local coworking space and work in the company of like minded professionals, which helps to relieve feelings of isolation when working from home.
Or, you can reserve meeting space or private offices on-demand, anytime, in one of hundreds of virtual office centers across the U.S.
This is ideal should you need office space for a deposition or for mediation. Simply book space online with Alliance by the hour, half day or full day, and a member of staff will check and confirm your booking, and help with any special requests.
Conclusion
The coronavirus crisis created huge financial and operational challenges for law firms, which in large part is a situation that the industry was not accustomed to.
After more than a year of co-existing with the situation and learning new ways of working, many law firms are now shifting towards a virtual, remote-focused business model for the long term.
Those that adapt to a virtual office model are able to enjoy better cost-efficiency, a more flexible way of working, and the ability to recruit skilled professionals from a much wider talent pool.
What’s more, with a virtual office your law firm can reduce the risk associated with long-term office commitments, without sacrificing a professional business environment — putting your organization in a strong position to achieve long-term, sustainable growth.
Want to know how to have a virtual law office? Alliance can help you make the switch. Choose a recognized business address with meeting room access, a dedicated business number and a professional live receptionist service. Learn more and speak to one of our helpful customer service agents.
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