The rise of virtual and dispersed law firms

As part of their digital transformation, many law firms have adopted agile working practices and experimented with paperless or paper-light policies, taking advantage of technology to move away from the traditional office environment to a more progressive way of working. New players have also emerged in the space, setting up virtual and dispersed law firms which enable lawyers to maintain a large degree of independence whilst remaining under the umbrella of a firm (eg for marketing, administration and insurance purposes).

What is the difference between virtual and dispersed law firms?

The distinction between virtual and dispersed firms is rather blurry. The term "virtual firm" has been in use for longer and originally described firms which decided to ditch a permanent physical office; many virtual firms were essentially sole practitioners who worked from home, and whose website was their primary public-facing presence. However, some of these virtual firms comprised multiple fee earners (either partners or independent consultant solicitors) and, as the number of members grew, they found that it was more efficient to pool secretarial and practice management resources and even to have a centralised office; this set-up became known as the dispersed firm (also known as the "displaced firm").

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What is required to set them up?

Both virtual and dispersed firms rely heavily on technology. Sole practitioners who wish to set up a virtual firm need a website to establish their presence and brand, the usual communication devices and potentially access to serviced office facilities for face-to-face client meetings (although they may be able to conduct the majority of meetings over the phone or via Skype). Practice management and billing software can be purchased outright but a cheaper option may be to use cloud-based Software as a Service (SaaS) products, normally available for a monthly fee. There are also a multitude of online secretarial and accountancy services to choose from, alongside virtual assistants and marketing consultants, if sole practitioners wish to outsource administration.

Dispersed firms which comprise multiple fee earners will generally require a more substantial and centralised IT infrastructure. However, on-premise IT will be unsuitable due to the "dispersal" of the lawyers; instead a cloud-based remotely hosted IT infrastructure which encompasses SaaS practice management suites will often be the best way of ensuring that all the partners or consultant solicitors can plug into a single comprehensive resource.

What are the pros and cons?

Experienced lawyers who desire a greater degree of independence may be drawn to the dispersed or virtual models. The former can offer more support for those who prefer to focus on lawyering and leave the running of the business to specialists. But for solicitors who wish to be truly independent and are tech-savvy, setting up a virtual firm can prove the ideal solution. In both cases, lower overheads mean that these firms can effectively compete with more established high street practices.

However, working remotely does not suit everyone and many fee earners may struggle outside an office environment, without the camaraderie of colleagues and support of the firm. Also, trainee and junior lawyers will need to gain some experience within a firm before they can go it alone.

Are there any success stories?

One of the best known dispersed law firms in the UK is Keystone Law. It was set up in 2002 and now boasts 250 lawyers, 40 support staff and thousands of clients. Other significant players in this space include:

What does the future hold?

As many of the magic circle firms continue to expand and “big law” gets even bigger, high street firms are struggling in an increasingly competitive market, pincered between virtual and dispersed firms which can offer lower prices due to fewer overheads, and the digital disruptors of the DIY legal technology market.

Furthermore, senior lawyers who have had enough of the corporate world are also setting up agile boutique firms which are snapping at the heels of even the larger players. Perhaps this heralds a gradual move towards a more independent style of lawyering for experienced solicitors, similar to that of barristers.

Matthew Johns, Product Marketing Manager, EMEA

Matthew is a member of the CenturyLink marketing team. He has over 20 years' experience in the IT, cloud and hosting industry gained in a variety of roles spanning project management to product release and product marketing. Matthew has a key focus on Digital Transformation and Cyber Security, including how organisations can best transition to the cloud and secure their critical assets - particularly with the General Data Protection Regulation (GDPR) looming ever closer..

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