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Virtual Firms And The Future Of Law Practice

By Patrick Lamb on Posted in Commentary

Very interesting article in the Legal Technology section of law.com today, Does The Future Belong To Virtual Law Firms? The articles discusses how Virtual Law Partners secured a client that is incorporated in Delaware and based in St. Petersburg, Russia, and is represented by a VLP partner living in Cali, Columbia.  Pretty cool.  The article describes the virtual model this way:

The model is relatively straightforward. The virtual firms hire only partner-level lawyers with an established client base, cut their Big Law rates in half, and let them keep almost all of what they bill. At VLP, for example, partners with ten to 15 years of experience bill $275-$400 an hour. The lawyers operate remotely, but they tap into a larger infrastructure with centralized billing, IT support, marketing, and recruiting efforts. They also share work frequently, communicating through video chat or e-mail as needed.

For work that can be done by one person, this is a great, cost-effective way to obtain an experienced and capable lawyer.  Here is one client’s take on the capabilities of the model:

Many companies, however, are waiting to see if virtual firms can handle bigger assignments. "I think a certain domain will remain exclusive to the big firms, such as complex litigation, or big corporate deals," says Tim Reis, the general counsel of EMS Technologies, Inc., and an early FSB Legal client. Still, he sees room for the virtual firms, "because the traditional model is just becoming too costly."

From my standpoint, the question is not whether virtual firms can handle bigger matters, but whether they can handle them as effectively as boutique competitors.  The difference?  The ability to aggressively collaborate. Even with the best communication hardware, there is something lost when you can’t go next door and bounce ideas off someone who may have nothing to do with the case but who is vested in its outcome. I’ve experience firsthand the accelerated evolution of ideas from really good to extraordinary when several experienced minds combine their talent and judgment and work through a problem.  When one of us is out of the office, it is just not possible to achieve the "capture the moment" collaboration we routinely achieve when collaboration occurs spontaneously.

That said, the virtual model, as well as the Valorem model (fixed fee litigation for business by senior trial lawyers), have a place in the business world.  As BigLaw continues to charge more and more, we believe the need for cost savings and cost certainty will cause clients to explore options like Valorem and Virtual Law Partners.  We also believe that those who try these new models will find that the results are just as good, or in many cases better, than those achieved by large law firms.

 

 

 

 
  • http://www.youthserviceslitigation.com Debbie Ausburn

    You have a point about collaboration, but, at least in my experience, working in a virtual firm is not that much different than a boutique firm. Caveat: I am one of the litigators at FSB Legal, so have a vested interest in making the model work. But, at my former firms (large and boutique), aggressive collaboration was not as easy as you describe. Usually, the other attorneys on the team were in depositions in Boston or Miami or London. I generally couldn’t bounce ideas off the person next door, because that attorney was in a client meeting or mediation somewhere. Most of my collaboration was done by email or cell phone or when we ran into each other in the Delta Crown Room.
    At least in the virtual firm, we recognize the need to collaborate. We are much more intentional about getting together for working lunches or conference calls or whatever we need to get the work done. I really haven’t noticed any decrease in spontaneous collaboration.

  • http://www.patrickjlamb.com Patrick Lamb

    Collaboration did not really occur in my prior firms either. One was an AmLaw 100 firm and the other a high-end litigation boutique. That was because each “team” was a de facto silo, and there was nothing motivating the partners to collaborate. We have structured our compensation system to reward collaboration, which is probably why it occurs so much. But having experienced it in the truest sense of the word, nothing else is so glorious and nothing else provides the same value for clients.