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Cutting Your Costs and Avoiding Bankruptcy: The Case for the Virtual Law Office
“We’re Going Bankrupt”November 30, 2013 Centre for Health & Safety Innovation5110 Creekbank Road, Mississauga, ON L4W 0A1
Omar Ha-RedeyeLawyer, Fleet Street Law
Contract Faculty, Centennial College
WHAT IS A VIRTUAL LAW FIRM?
Traditional Law Firm
Traditional Law Firm
Virtual Law Firm
What is a Virtual Law Office?
• strict definition: client-lawyer interaction that occurs in an online space –Also known as eLawyering or Virtual Law Services–Only become practical in recent years
• common definition: defined by how a law practice is organized and less on how the legal services are offered to clients–Focus on firm structure, in addition to the delivery
of services
Why a Virtual Law Office?• Legal disruption due to 2008 recession
– Displaced lawyers and paralegals; firms looking to alternative structures; lawyers and paralegals looking for alternatives
• Creates considerable flexibility to start-up law practices– Minimize rent overhead and staff expenses, two major fixed costs
for any business– Allows for blended structures, relying on others in association or
chambers to offset overhead costs– Provides a competitive advantage to the small and solo
practitioners, and for paralegals
BENEFITS OF VIRTUAL LAW PRACTICES
Expanded Jurisdictions
Expanded Practice Areas
Expanded Practice Areas
Lower Overhead
•Real Estate• IT•Staffing• Incidentals
Expanded Network
Just In Time Methods
Just In Time Methods
Just In Time Methods
Just In Time Methods
Just In Time Methods
Just In Time Methods
ORGANIZATION OF VIRTUAL LAW PRACTICES
Partnerships
Hub and Spoke
Branded Networks
Combined
Contrasting Different Models
Strictly In-home
Rented Virtual Office (Generic)
Rented Virtual Law Office
Features
CostMost inexpensive Most expensive Usually in between
Storage space Most limited Usually none or limited More flexible
Work efficiencyHigh level of distractions
Lots of quiet work space
Often subject to availability
Communication Options Low to Medium Medium to High Medium to HighMeeting Space None High Medium to HighPractice support Very low Low Medium to High
Models of Virtual Law Offices and Blended Models
• Hybrid model provides access to training areas and boardrooms
• Complex legal work may not appear as conducive to the virtual office– interdisciplinary in nature or require input from several different legal
specialities,– ad-hoc and strategic alliances with other practitioners or established
firms can allow for the work to be shared • Include this arrangement in the retainer agreement
• attach a virtual office to a more traditional firm as an “of-counsel”– allow for strategic use of firm resources while still retaining
independence and flexibility.– may require certain non-compete or non-solicitation agreements,
providing their own limitations
CONCERNS OF VIRTUAL LAW FIRMS
Client Relationships
• Ownership of Clients• File Transfer & Retention• Confirmation of Identity
Fee Splitting
• Among the Firm• Among Other Lawyers• With Non-Lawyers
Insurance
• Coverage for the Firm• Coverage for Contractors
Advertising
• Compliance with State Regulation
Professionalism
• Standards• Mentorship
Continuity
• Records Retention• Continual Connection
Limitations of a Virtual Law Office
• Working out of home has its own unique challenges–Lack of workspace and storage–Interruptions and distractions due to personal chores
and family responsibilities
• Some practice areas heavily dependent on face-to-face communication–Litigation is still an in-person profession
• court appearances still require proximity to the court house• know-your-client requirements require special attention for
out of jurisdiction clients– Mediation practices– Litigation coaching
The Technology is New, The Concept is Not
• First virtual law office in 1996 by Andew Woolley in England
1. stable core group of lawyers with a collaborative relationship
2. held together through technology and using flexible support staff needs
• Tradition of semi-independent barristers in England going back to the Inns of Court–The practices remain separate, but barristers may
share staff resources and assist each other with files–Sufficient confidentiality to allow lawyers in the same
chambers to act on both sides
TOOLS OF VIRTUAL LAW FIRMS
What’s Needed to Go Virtual?
• ☑Got Some Attitude• ☑ Got Mobile• ☑Got Communications• ☑Got Surge Capacity• ☑Got Google Juice
• See paper, “Virtual Offices Provide Promising Opportunities”
Tools
1. Communication Services2. Office Services3. Cloud-Base Document Management4. Practice Management Solution
Communications• Voice over IP (VOIP)• Call Forwarding• Email• Social Media
Office Services
• Meeting Space• Work Space
Document Management
• Secure Storage• Online Document Generation
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Practice Management
• Practice management services• Reporting• Contact & Conflicts• Time Tracking & Billing• Import / Export• Updating
Comparing the Costs of Practice Management Software
• “Comparing the Costs: Analyzing the total cost of ownership of Clio vs. traditional desktop practice management solutions.” http://www.goclio.com/resources/white_papers/Comparing%20the%20Costs.pdf
Total and Average Costs
Reporting
Reporting
Contacts & Conflicts
Time Tracking & Billing
Import / Export
Updating Systems
