The Evolution of the 'Virtual Law Firm'

Burton's use of Amy is indicative of the way I'd imagined “virtual law firms” to operate: equipped with automation tools to tackle the most routine of tasks. The data, however, tells a different story. The 2015 ABA TECHREPORT found that attorneys variously define the “virtual law practice” by its: 1) lack of a traditional office; 2) minimal in-person client contact; 3) Web-based interaction; 4) unbundled legal services; and 5) secure client portals. Yet, most are in agreement that core to operating a virtual law firm is a technology-driven infrastructure.

And while the tools needed for operating such an infrastructure are more readily available by the day, the virtual law firm model is in decline. Only 5% of respondents to the 2015 ABA TECHREPORT reported practicing in a virtual law firm, a number that has slowly declined since the model came on the scene during the economic downturn of 2008.

But while the “virtual lawyer” may be on the decline, the technology making law practices more portable and potentially more efficient has seen a surge. The rise of cloud computing in particular has made it possible for attorneys to keep all the technology tools they need to practice on hand at all times, and eschew direct client contact and office space if so desired.

“At some point, we're going to be calling this 'practicing law,'” Burton says of the model.

What Is a Virtual Firm?

Richard Granat, founder of one of the first virtual law firms, MDFamilyLawyer.com, and co-author of the ABA Guidelines on eLawyering, takes what he considers to be a traditional view of the virtual law firm. This, Granat says, means incorporating the law firm's definitive feature, the online client portal: a secure, encrypted Web interface allowing attorneys to interface online, as if using a service like Skype.

Paramount to a client portal, Granat adds, is security. “You have to have a client space where communication and everything else is compliant.”

The secure online portal is not a novel concept — you may already be using one every time you check your bank accounts online. But Granat says that this format can be used for not only sharing files and messages, but also delivering online legal services.

The secure client portal, a chief component of the ABA's guidelines for what constitutes eLawyering, isn't particularly prevalent across self-identified “virtual law firms.” Only 21% of respondents to the 2015 ABA TECHREPORT said they used such a portal, and the number of portal users has stayed between 20% and 25% over the last five years. Notably, these portals are far more likely to be employed in bigger firms that can afford the overhead; 70% of the largest firms report using a secure client portal, as compared with a mere 6% of solo practitioners.

CuroLegal's Burton notes that while secure client portals in the past had very specific standards, the availability of popular consumer services such as Dropbox, Box, and Google Docs has made it possible to engage a lot of the same features of a client portal without the large overhead costs. Some have raised concerns around the security of these services (see “Cloud Migration: What's Driving the Move to the Cloud?” Legaltech News (Oct. 5, 2016)), but many smaller firm attorneys have adopted the platforms with a paid subscription for added encryption and verification.

“If we rewind five years, the client portal was a very specific thing,” Burton says. “If you share a Dropbox folder, that can definitely serve as a client portal in that [clients are] getting real-time access to a document. They can comment back and forth.”

Practice management software such as Clio, MyCase and Rocket Matter, which tend to be more popular among smaller firms, have also begun tacking client portals onto their software. These allow attorneys to communicate with clients over billing information, calendars and documents, among other features.

Although he favors the expansion of access to these online portals, Granat sees room for improvement in the tools offered by practice management platforms. “I still see them as sort of rudimentary,” Granat says. “But it's a path in the right direction.”

Burton, meanwhile, favors a more expansive approach to the “virtual law firm,” noting that many of the tools of Granat's online client services can be constructed through commonplace consumer technology.

“To me, virtual practice is really about mobility — how do you work on the go, which is what lawyers are doing anyway regardless of traditional offices?” Burton says. The key is “having the right technology in place to structure your firm to best serve your clients and allow you to operate your firm.”

Burton's personal approach relies on minimalist technology (he primarily relies on an iPhone and Moleskine Notebook) and a mix of services to automate and streamline certain aspects of the workflow. But he believes that virtual law practices allow for attorneys to design and employ a technology arrangement that best suits their own needs.

“The hardware is all secondary and allows for personal workflow. To me, that's a lot of the virtual law firm model, being more creative and flexible about your personal environment,” Burton says. “The hardware doesn't matter as much as if you have the tools that will help you collaborate with your team and help you collaborate with your clients.”

While solo or small virtual firms can completely personalize their virtual practice technology, the strategy shifts slightly in larger virtual law practices, where mobile attorneys operate collaboratively under the banner of a larger practice. These firms typically treat themselves as alternative traditional firms, but generally forgo traditional office space and legal support staff.

Today's big remote firms like Potomac Law Group and Rimon PC continue to tout their growing revenue as evidence for the success of the model, but are beginning to rebrand as “cloud-based firms.” See “Whatever Happened to 'Virtual' Lawyering?” The American Lawyer (Oct. 31, 2016). Kevin Broyles, co-founder of cloud-based law practice FisherBroyles, says the term “virtual” no longer feels particularly salient for his practice.

“We're a cloud-based law firm. I hate the word 'virtual,'” Broyles says. “We're very much a real law firm with real partners that represents Fortune 500 companies.”

Taking the Practice to the Cloud

The biggest technological change around virtual law practice has been in cloud computing. Thirty-seven percent of all respondents to the 2016 ABA TECHSURVEY said that they used cloud technology, up from 30% in 2015. Cloud computing has especially caught on in the small firm realm: 61% of small firms polled for the ILTA/Inside Legal Technology Purchasing Survey predicted that their firms' software could be cloud-based in the next one to three years.

“Core to a virtual law firm is going to be leveraging the cloud, using practice management software that's in the cloud that you and your team can access from everywhere, using document storage where there's collaboration there. It's really focused around the cloud,” Burton says.

The ABA's TECHREPORT survey found that certain types of collaborative online client services haven't really taken off, however. Although 33% of attorney respondents reported offering document sharing to clients and 26% reported offering some form of online messaging, only 7% offer fillable forms for document preparation. Just 1% of lawyers offer online dispute resolution.

Broyles says Fisher Broyles is made possible almost entirely through cloud-based technology. The firm offers its attorneys access to document management, document creation, messaging, billing and other proprietary technology through the cloud, making it possible for attorneys to work remotely from wherever they may be.

“It's not difficult to distribute, and it's not difficult to provide the technology you'd have in a law firm,” Broyles notes.

Broyles cautions that while that flexibility can yield increased efficiency and more pleasant work-life balances for practiced attorneys, it is likely to foster bad habits in younger attorneys.

“If you're going to hire first-year lawyers out of law school, you can't let them work from home. They've got to be trained, they have to be supervised,” Broyles says, adding that Fisher Broyles only brings on attorneys at the partner level with a minimum of seven years' experience under their belts.

Cloud-facing products also allow attorneys to create full technology structures for their practices by integrating with software providers offering services, usually at a fixed rate. Burton suggests that attorneys looking to move into the virtual space would be wise to consider their plans for integrated cloud-based tools before fully committing to particular platforms.

In many ways, the virtual model is not all that different from the way traditional law firms currently operate. Firm cloud adoption has grown extensively in the last few years, up to 71% according to a recent Legaltech News survey. See “Attorneys on the Move: Trending Toward the Mobile Office,” Legaltech News (Nov. 16, 2016). While Big Law firms still have brick and mortar offices, much of their work today requires that attorneys work remotely and collaboratively across state and national lines.

The influx of cloud computing across the legal industry, especially as more attorneys come to understand and utilize “the cloud,” often raises questions around data security. Broyles says Big Law firms are not necessarily much better positioned to deal with the influx of cybersecurity risks posed by modern legal work.

Conclusion

As more legal practitioners begin adopting digital models into their practices, some will inevitably take all of most of their operations online. Driving such approaches will be the universally shared desire to boost efficiency, a process that is already entailing automating some operations and using technology to streamline others. Regardless of what form this avenue eventually takes, it's likely that lawyers will increasingly find themselves with practices that are more mobile, tech-driven, and involving cloud computing.

***** Gabrielle Orum Hernández writes for the Daily Report, an ALM sibling publication of this newsletter.