6 Things You Should Know Before Starting a Virtual Law Firm

As a lawyer, starting your own law firm to provide legal services is hugely involved. One of the most significant difficulties is picking a physical location for a traditional brick-and-mortar office space. Many law firms feel like they need to fight for a space that affirms a specific cultural persona, such as the high-rent downtown areas of a city. However, especially in the last year, we have seen the legal profession shifting towards a new tendency towards virtual practice.

Over time, legal professionals have realized the advantages of a virtual law office (VLO) over traditional law firms. During the pandemic, this previously slow evolution towards internet-based services has been rapidly evolving. Companies created this period of the virtual workplace out of necessity, but it gave interesting insights into our law offices and work-life balance.

A survey by MyCase showed that 70% of law firms believe that COVID-19 will permanently change how law firms operate. 80% of those firms already have started to transition to some remote work or transitioned to an entirely virtual firm. There is a lot to consider for those looking to open a virtual law firm with that in mind.

What is a Virtual Law Firm?

Simply put, a virtual law firm is based online rather than in one physical location. This structure can take a few forms, such as separate smaller satellite offices connected through a virtual hub or a practice that is entirely online. Attorneys looking to open a virtual law practice benefit from lower overhead costs, better work flexibility, and more saved commuting time benefit from moving to a virtual practice. However, there are difficulties and logistics to consider, such as how you plan to meet clients, collaboration strategies, and where your mailing address will be. Due to these challenges, virtual law firms are often easier for small firms or solo practitioners. Regardless of firm size, there are steps you can take to help ensure success.

Write a Solid Business Plan

While writing a good business plan is vital for any new law firm, virtual law firms need to detail their structure. Consider your goals and what success will look like to you and your firm. Also, think about compensation, fees, and how much revenue you will need to succeed. Once you decide on these initial concepts, then start writing out your complete business plan following this traditional layout:

Executive Summary - This section will provide an overview of your company and its goals. It should include higher-level summaries such as your mission statement, core values, primary goals, and the differentiators that make your firm stand out from the competition.

Company Description - In contrast to the executive summary, this part should cover some of the details of your operations and how they work. For example, you should detail specializations, the legal structure and ownership of the firm, any history that the firm may have if you are transforming a previous firm, and where you are geographically practicing and serving.

Market Analysis - Here, you will be doing some preliminary research into your potential practicing space. You will want to do some in-depth competitive analysis, especially with firms with a similar online presence. Create a description of the industry within which you are providing services, and find the trends within that sector. Also, consider your ideal client and decide on projections for pricing.

Organization & Management - This section describes you and any other partners who have ownership in the firm. Describe how the partnership will look if you have multiple partners, and talk about your experience and why you will be a good leader at the firm.

Services - Arguably, this area is one of the most crucial parts of your business plan. You should describe here the problems you are addressing and what struggles bring your clients to you. Then, answer how you are going to solve those pain points for your clients.

Marketing Strategy - There are three "P's" in marketing: positioning, pricing, and promotion. You should decide how much you will bill hourly and how that stacks against your competitors and client expectations. Plan your promotional pursuits. What avenues will you use for your advertisements? Is much of your marketing going to rely on word-of-mouth referrals?

Financial Strategy - The financial section will detail how much money you will need to start your virtual law firm, how much you will need monthly to continue operations, and projections for growth as you sign new clients.

Think Through Administrative Workflows

In a virtual office, administrative workflows will look very different. Much communication happens organically by walking by someone in the hall or chatting around the coffee pot at a traditional office. Because of this difference, it will be necessary to detail how you will manage communicative and administrative workflows and what the expectations will be. These plans should include best practices for communication both in and out of the office.

Make sure to make an in-depth plan so that staff is aligned on how to manage each situation. For example, what are the expectations of individual lawyers for setting up meetings with clients, and how will they communicate internally with support staff and other lawyers? What about new client intake? In addition, think about tasks typically handled in-office, such as mail, large printing projects, and physical file storage. Your initial processes may evolve to fit what works best, and that is okay. Be open to feedback so that you can improve over time.

Build a Strong Internal Culture

Company culture helps keep workers comfortable and happy in their roles. While providing remote flexibility helps improve employee mental health and morale, culture is also key to bringing in top talent and keeping your current workforce happy. A report from Robert Half showed that over a third of workers wouldn't accept a perfect job if the culture were not a good fit for them. The report also showed that nine out of ten managers said that how a candidate fits into the corporate culture is equally important as their skills and experience. So, how do you make a great company culture when you all work remotely?

A great success story is GitLab's remote work structure. While not a law firm, they have a detailed guide to approaching the unique challenges with the virtual system. Their building culture page talks about how vital intentionality is to create a culture in a remote workspace. It's also essential to write down your culture, company values, and how you reinforce those values. Showing gratitude and transparency is a must, as is putting a spotlight on those who are cultural ambassadors. What this will look like at your firm may be a little different, but this is an excellent example of some initial concepts to drive a strong company even when working apart.

Ethical Considerations

As you plan your virtual office roll-out, there are two primary ethical considerations you need to consider. The first issue is the regional laws for a physical office address for your law firm, while the second is considering any jurisdiction laws. Once you thoroughly understand the laws that govern your region, it is essential to follow them closely and make all employees acutely aware of them to ensure you stay within regulations.

Office address

The first thing you will want to check is your state's laws regarding bona fide office requirements. This rule requires attorneys to have physical office space. Luckily most of these rules have relaxed as remote work has become more common. For example, North Carolina ruled in 2012 Formal Ethics Opinion 6 that a PO box is an acceptable office address.

In addition, many states endorse the Model Rules of Professional Conduct and Rule 7.2(c). These rules require that any legal marketing materials have to include the address of the advertising attorney and that failure to have a physical location is misleading. States like Ohio and Florida have issued opinions that address these topics for virtual practices, but some states don't have any exceptions.

Crossing jurisdictional boundaries

If you provide services out of state, even if you are licensed there, not having a physical office can get you into hot water. The last thing you want is to be found guilty of engaging in the unauthorized practice of law, a hardship a few virtual law firms have endured. Be thorough to prevent unauthorized practice to protect yourself and your employees.

Choose The Right Tools

Choosing the right tools and tech stack for your firm is essential. Even more crucial is making sure that your technology is secure and safe for your firm. When using a client portal or document sharing tools, having top-notch security in place is an absolute must. One way to approach this is to vet the software providers by asking them for references, creating a list of best practices and requirements that they must meet, and asking for the details on how they store and encrypt their data.

Once you have candidates that meet your requirements, you can compare their features and benefits. Finding a service that includes various tools can simplify onboarding and training, while picking and choosing specific products may lead to better deals and flexibility in the long run. Making a list of essential features needed for your particular workflow can help you narrow your options down to the ideal tech stack for your company.

How to Promote Your Firm

Think back to your business plan and how you wrote your marketing plan. Now is the time to go into detail about how you want to execute your marketing vision. Consider developing a landing page and website that is SEO optimized so that you can gain organic traffic over time. Write out a social media plan that will connect you with your ideal clients. For some areas of law, direct mail and outdoor advertising may prove effective. Look into ways to create content or do collaborations for promotions, such as podcasting, television, or Youtube videos. The methods that will work best for you depend on your niche, services, and the ideal clients you want to reach, so research what has worked for other firms similar to you and how to reach that specific clientele.

Summary

With the rapidly growing virtual market, now is a great time to move to a virtual law firm. With a lower overhead and happier employees, you already have some advantages over a traditional brick-and-mortar law firm. However, there are challenges, so make sure to plan out your strategy thoroughly to help you succeed. Designing a well-thought-out business plan, developing a technology strategy, and creating a solid company culture are critical to a successful start. As more and more firms move to partially or fully virtual offices, you won't regret getting out ahead of the game.

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