Doctors, law firms, accountants, marketers and others have all had to engineer a virtual solution to their businesses in the past year. Very few have managed to evade the infusion of online services and while brick and mortar locations have begun to reopen, all has changed. The reality facing the legal sector is that physical workplaces are becoming secondary to virtual offices.
18 months ago that may have been a ludicrous thing to say but considering the facts makes it intuitive. Technology use has grown significantly with 81% of the US population owning at least a smartphone. This figure grows to 89% when the 65+ category is removed from the statistics. Not only has our use of technology increased, but our usage of the internet has also changed. 11% of all retail sales were conducted online in 2020 which reached 45% during the holiday period. The US is now conditioned to expect a digital option.
These statistics add to the sociological change of what is and is not essential. Disrupting our schedules and taking unnecessary commutes to lawyer offices doesn’t seem too inviting anymore because there is a more efficient way.
Starting a new virtual practice or switching to digital service delivery may seem intimidating but it doesn’t have to be. In truth, there are comparatively fewer barriers to starting out. The asset of having a large modern office to dazzle clients is not as important and clients are more willing to take to the internet to find services. Those that command the digital space have quicker and more convenient access to clients.
With all of this evidence to suggest going digital is the way forward, what actually is a virtual law firm?
The tradition of physical location law firms is no longer necessary as we accepted digital as a valid method of legal servicing. A virtual law firm is the same as a traditional firm except it delivers services almost exclusively online. Most often firms are set up from the home of the lawyer or from a shared space with a team.
Today’s virtual firms are predominantly set up either as a complement to a bricks-and-mortar location or as a stand-alone practice and given the events of 2020 and beyond, they have become a mainstay in the US legal sector.
Virtual firms may mean less face-to-face time with clients and possibly excluding the technology averse but the benefits far exceed the drawbacks for both lawyer and client.
As mentioned, the inconvenience and disruption of attending appointments are largely eradicated through virtual connections. The commute to and from an office rarely close to home is erased. With this benefit comes the removal of proximity barriers. Many lawyers are chosen because they are close and convenient to get to whether they are ideal for the client or not. Virtual lawyers are easily accessed without compromising on quality.
The number one reason for building a virtual law firm is typically expensive. There are dramatically fewer financial barriers to operating from your home than operating from a state-of-the-art building in the business district. Rent and expenses dramatically decrease making service more affordable and increasing profits.
In many states, you are also able to partially write personal expenses such as home rent and utilities off as business expenses meaning less income lost to tax overall for sole traders.
From the lawyer’s perspective, the eliminated commute adds to the quality of life and flexibility. Modern attorneys commit approximately 140 hours (6 days) of overtime to their clients each year plus an additional 235 hours (10 days) of average commute time. This is before you consider the stress of a full-time job. By switching to virtual offices, lawyers are balancing out their professional and personal commitments leading to improved mental health.
Here is the Lawbase guide to starting and growing a virtual law firm.
Physical and virtual office addresses are treated quite differently at the state level. In many cases, states require lawyers to have a physical residence to practice law and be served with legal papers. Before you launch into a new virtual practice, make sure it is viable and if an address is needed, figure out if a home address, PO box, or shared office space is an acceptable option for your needs. This is a compulsory first hurdle to attend to when setting up.
Sticking on the topic of locational regulations, it is worth mentioning the jurisdictional and licensing complexities. UPL (Unauthorized practice of law) and state law licenses are what forbids lawyers from practicing nationwide. These laws govern where you can practice when you have passed the state’s bar exam. Unfortunately, Google, Bing and other search engines don’t filter out-of-state clients or lawyers. This means the responsibility resides with you to ensure that any client you serve falls within your jurisdiction.
Founding and growing out any start-up is challenging and demands long hours so make sure your setup isn’t making it harder. This starts with the physical space and furniture.
Create a professional yet ergonomic workspace with plenty of natural light. You will be occupying this office for large parts of your day so whether you opt for a standing desk or sitting, make sure you are comfortable.
While arranging your desk and set up, make sure to note your background for video meetings. This small window into your office is crucial as clients or opposing counsel have nothing but what is on the screen to judge your professionalism. Install a ring light behind your laptop to adequately light your face for calls. It might be a small thing but shadowing makes you look older and often worn-out.
In terms of hardware, an adequate laptop is a bare minimum for delivering digital services. Having reviewed the best in class, we have found the Lenovo ThinkPad Carbon X1 or Dell XPS 13 to be more than capable of handling all of the required tasks. For virtual calls, a VOIP headset system is widely used and accepted as the most comfortable especially for longer calls. Most communications will be delivered online but where signatures and printing are required, a printer scanner is a must-have. In addition to these requirements, it is advisable that you learn where your nearest postal service is in case e-communications are not viable.
Last but not least, test your internet speed. Look for 100+ Mbps to ensure you have uninterrupted video conferencing and cloud access. Anything less means you renegotiate with your provider and ask for an upgrade or a change of service.
If you are just starting out, the many benefits of working from home may be a novelty but be wary. Getting into the habit of abusing flexibility has negative consequences. Aim to keep regular hours that your clients can rely on you for. Trust is one of the biggest impacted nuances of not having regular in-person exchanges and every effort to ease these worries with the client should be made. If you are not readily available, clients get uneasy or impatient and can leave regardless of how good a lawyer you might be.
Equally important within your scheduling is building time to exercise and enjoy life outside the office. A study of 15,000 lawyers found that 28% of attorneys suffer some form of depression and 21% can be considered problem drinkers. Lawyer burnout is a serious epidemic that goes unchecked. To maintain health and longevity, create space in your schedule for proactive mental health habits.
Whether you are transitioning from the traditional practice or starting a new virtual firm, a business plan is essential. For the uninitiated, it seems like a trite investor motivated document with little real application but this couldn’t be further from the truth.
A business plan can be the road map to your success. Use it to set your business aims, guidelines to success, standards expected of yourself and your team members and the vision for the future.
Business plans articulate who you are and what you do by way of an executive summary and description. This may include your values and your general rules to live by which often prove critical in decision making between partners or as a sole proprietor.
Start-ups, regardless of industry, will often be posed with projects outside their typical scope and the advice will always be the same. Unless it is essential to generate large income urgently, stick to what you do best. Building your reputation in a specific niche is easier than diluting your brand across many. It is important to spell out your niche in the executive summary and strive to grow your name in your specialty.
Thorough market analysis and description typically follow your executive summary. A market analysis breaks down your target market by geographic, demographic, psychographic and behavioural factors. Who are your prospective clients, roughly how big is your market and where can you access them?
A critical analysis of your target market and competitors informs your marketing efforts and optimizes your time going forward. Developing a marketing strategy based on the collected data streamlines your efforts but also provides a visible action plan for potential loan applications or future partners.
The business plan is completed by adding your operating strategy and financial plans. How will you operate on a day-to-day basis? Who is responsible for what? Set a clear, easily understood system for your clients to understand. Your contract and operational plans must tackle the often-complex issue of getting paid. Digital billing methods have done much to resolve this contention but this needs to be done before billing cycles begin.
Finally, financial forecasting is necessary for your business’ future vitality. Displaying your financial business model allows banks to make an assessment of your viability. Showing clear income streams and capital investments improve your chances of receiving loans and growing your firm.
For virtual firms, a smart and professional website is critical. Without a physical location to walk past, you are relying on clients to discover you digitally. Even when clients do find you, your website needs to convert them to leads. Enlist the help of a specialized web developer to ensure the best user experience possible. If a client can navigate your pages easily, they are more likely to find what they are looking for and trust your services. If your site is difficult to use, they will click away worsening your bounce rate.
Secondly, in addition to a quality user experience, invest in SEO. SEO is responsible for where you rank on search pages. Rank your pages and content for the keywords and search terms your clients actually enter. The longer prospective clients spend on your site, the better you rank. By keeping their attention, you lower your bounce rate meaning you are credible, relevant and important in the eyes of a search engine. This success allows you to climb the rankings list as you reliably answer what a client searches.
The most important piece of any virtual law firm is your ability to serve your clients from getting them in the door to providing legal counsel. Iron out the entire customer experience as you are not only offering your knowledge of the law.
The buyer journey refers to the typical process clients go through in discovering and enlisting your services. It can be referred to as your lead generation or sales funnel but however a client bridges the gap between looking for legal service and hiring your firm is the buyer journey. For your firm to inbound clients, you must ensure a smoothness sales service. Map out the journey clients goes through and delete every kink you can. Scrappiness or cumbersome processes diminish your professionalism driving clients away.
The journey will include your intake procedures which are best automated for small firms. Removing paperwork and automating the process in a way that integrates with your cloud systems proves you are tech-savvy. It shows modernization which builds trust and confidence and importantly reduces the friction to the client hiring your firm.
The client portal refers to the shared cloud between you and your clients. Clients will need regular access to the information you share and require from them. Clio, FileCloud and MyCase are among the best known in the industry. The vital things to look out for are:
· High-level security and encryption
· Compatibility with other software such as intake forms, document automation software and research
· Invoicing, billing and digital payment planning
· Direct messaging services with clients
· Uploading and sharing services between clients, opposing counsel and firm associates
Trialing and finding the best software for your firm vastly increases efficiency. As a small or growing firm, every minute you can save is essential in the fight to gain a foothold in the market. With that said, using technology wisely is critical.
Entrepreneurs on average use 75 new software tools and as legal firms have now accepted the use of tech solutions, the industry is awash with options. Take care in deciding what technology you will use as it must be compatible with the overall project. Build from a reliable, secure and application friendly cloud management system and integrate efficiency software as needed. Wherever you can slim your processes, it is advisable to do so.
Intake forms that directly populate client portals reduce effort redundancies. ESignatures can decrease the turnaround time to getting documents signed while automation tools like Loio, LawPay and ROSS Intelligence augment attorney abilities. Find the bottlenecks in your software usage and processes and whittle them down as the more clients you can serve the more your firm can grow.
Within the quest for efficiency, it is important to not lose sight of what works for clients and security. For instance, it might be more efficient to use one video conferencing tool but different clients will be familiar with WhatsApp, Zoom, Google Meet and many more so you may have no choice.
Additionally, the security of data within your tech-stack is a critical issue. Most cyber-breaches come from human error so assess the threats you are facing and deal with them proactively.
Amid building your virtual firm, the administrative and office management tasks are often left behind. Though they may be less exciting and non-billable, they are vital. If you do not have the time but do have the financial resources consider shedding the marketing, accounting, billing or reception to an employed team member or out-sourced agency.
Don’t wait to hire. Waiting allows important matters to be missed causing critical logjams. When this eventually effects client relations, problems become more serious. If help is needed, address recruitment intentionally as new hires can address financial drains or cumbersome processes.
In addition to solving problems, it is important to find like-minded ambitious people driven to add value to your enterprise. The right mindset will often trump the best resume so think about the culture you are building. Begin onboarding with the intention of collective growth professionally and as a business.
When it gets to the point of having a team under you, ensure they have the right facilities to do their job effectively. Does everyone have the hard and software to succeed? Are your communication lines open? Will the systems you have built be scalable?
The early stages of a virtual firm are undoubtedly stressful. All the typical questions of “will it work out?” or “will I have enough clients to sustain the firm and employees?” will circle. The only true way of erasing these is to grow your firm. To do so you must concentrate on business development.
A reasonable rule of thumb is to allow 20% of your time to business development. It may seem like you are giving away too many billable hours but building a client list is key. Employ AI and automation where possible to ease the burden and augment your efforts. Tech-savvy solutions can simplify your processes with chat-bots, automated drip campaigns and RFPs meaning you can answer clients without losing focus.
Ultimately, your growth depends entirely on your marketing and a small client list is always under threat. Losing one of a small group of regular clients is far more damaging if there are no more in the pipeline. Keep a stream of incoming clients and deal with overflow or hiring needs when they arise. If you ever want to be in a position where your firm can autonomously operate without you over-extending yourself, you must invest in savvy physical and digital marketing.
Virtual firms or at least having virtual services as an option is the future of the legal industry. As Gartner predicts, everything that can be automated should be automated which suggests that the public will no longer be comfortable losing their time frivolously. The flip side of the hyper-automated world we continue to live in, is that individuals and small teams have the technology available to amplify their efforts meaning you can achieve more with less.
Starting out early in building a virtual firm affords you many of the first-to-market benefits. A groundswell of clients continues to be underserved by clumsy transitions and resistance to online delivery but not you. You have the benefit of meeting clients exactly where they are and delivering services in the way they have come to expect. You also have the benefits of being extraordinarily low cost and lower personal risks.
If you follow our guide there is no doubt that you will give yourself the best chance at a successful and sustainable virtual law firm launch.
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