Thought Leaders

Going Virtual: Three Models For Law Firms Making The Switch

video conference laptop distancing

Before Covid-19, running a remote practice probably seemed impossible to many law firms. But if there’s anything we have learned in the past 18 months, it’s how quickly businesses can adapt to new ways of working.

Now, it seems, a growing number of legal professionals are ready to make a permanent switch to virtual work.

A survey by legal information business Thomson Reuters revealed that around 65% of lawyers in the UK had experienced positive changes to their wellbeing as a result of working from home.

This sentiment was echoed by UK firm partners, with 42% saying that working practices had been improved by remote working.

With this in mind, let’s take a look at three tried and tested models for running a remote law firm.

Ditch the office but keep your existing business structure

On the face of it, this option might sound like the most simple one. The basic structure of your business remains in place, except for where your people are based, i.e. they work from home.

The obvious advantage of this approach is that you will do away with the overhead costs associated with having an office building, without having to make any major changes to your business model.

But be warned: while this might appear to be the simplest way to make the switch to virtual work, there are several complicating factors to take into consideration.

As an employer, you will have the same contractual obligations to your staff, including adhering to health and safety standards in their new home office.

Although you will save money on office upkeep, you will still be required to cover any extra expenses your employees accrue working from home, and will maintain responsibility for their work equipment.

You will need to revise your office manual if you pursue this method of going virtual–many people are surprised by how many things need to change following a shift away from in-person working.

New systems will have to be put in place for managing incoming and outgoing post, court diaries, team meetings, cybersecurity, recruitment, training new staff, and meeting with clients. Your business model might be the same, but the way you operate will be entirely new.

On top of this, you should consider the impact of losing your visibility on the high street. The power of having a physical presence in the community should not be underestimated, and some of your more old-school clients might take some convincing.

One way to mitigate the potential fall out is to focus on advertising, both locally and further afield. Such advertising should include Legal directories which are a great way of reaching local clients that are searching for legal services.

Legal directories will also be much more affordable than other forms of online advertising which can quickly become quite expensive.

Restructure to a classic virtual model

The classic model for virtual law firms centres on the fact that there is no office, and no employees. Instead, the team is made up of self-employed consultants, who are responsible for various aspects of their work previously handled by their employer.

This was the most common model used by virtual law firms before Covid, and has definite advantages over sticking to the typical in-person structure.

Firstly, your overheads are likely to drop dramatically. In addition to saving money on office upkeep, there is no need to provide equipment or assume responsibility for your consultants’ working conditions – that rests on them.

This way of working also reduces cash flow issues because you will not be paying monthly wages. Rather, the consultant receives their fee when the company is paid.

Benefits for consultants include greater freedom to choose their own working hours, the ability to work for other firms, and the opportunity to increase their earnings.

Lucy Scott-Moncrieff, a self-employed lawyer at a virtual UK law firm, says: “In my firm, consultants receive 70% of what they bring in, which means our legal aid lawyers get well above the industry norm, and our privately paid lawyers can comfortably undercut competitors on price and still make a good living. In practical terms, this means that for every £100,000 of fees billed, consultants keep £70,000.”

Shifting to a virtual model, of course, necessitates some tweaks. Although there is no official legal definition of what it means to be self-employed, the Legal Journal reported that it normally constitutes the following:

  • Consultants are personally responsible for the success or failure of their business
  • Consultants provide a service to a business using their own tools and equipment
  • Consultants provide invoices for their work instead of receiving wages
  • Consultants can hire someone else to perform work
  • Consultants can take on several customers at a time and work on different projects

To facilitate these changes, you need to consider which services you will continue to offer your team, and how to do so in a way that doesn’t compromise their self-employed status.

Some common ones include providing access to online legal resources, handling advertising, giving help with invoicing, and fostering internal referrals between consultants. Many virtual law firms using this model also choose to provide professional indemnity insurance.

Transfer to an existing virtual law firm

There’s a chance that the options outlined above will be too much to take on right now. It’s understandable, particularly given the events of the past 18 months. If this is the case, then you could join the hundreds of law firms joining existing virtual firms.

This model looks a lot like the classic virtual model, but with the advantage that you would not need to set any of the systems up yourself.

After closing down your existing firm you and any interested team-members would join a virtual company as self-employed fee-earners. This approach ensures existing teams and bonds remain intact, and your clients will enjoy consistency of service.

If you’ve been running your own firm for many years then you might feel apprehensive about joining someone else’s firm.

The crucial thing to remember is that this method allows you to maintain autonomy over your work, without the responsibility of managing a team.

Many people find that this way of working helps to reduce their stress levels, increase their take-home earnings, and restores their work-life balance.

PM Today Contributor
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