Legal Trend: Cloud Technologies Empower Virtual Law Firms (Part 1)

When launched its unconventional “virtual” platform to sell books in the mid-1990s, it introduced an innovative business concept that many regarded with skepticism. Can an organization without a bricks-and-mortar storefront actually succeed? Yet when Time magazine heralded Amazon’s founder, Jeff Bezos, as its “person of the year” at the end of 1999, citing that “e-commerce is changing the way the world shops,” it helped validate the viability of the virtual business model across countless industries -- including the legal profession.

As legal professionals continue to seek alternative methods to deliver more affordable legal services, the “virtual law practice” has become a reality. And with the widespread availability of mobile applications and secure capabilities enabled by cloud-based tools, virtual law practices are offering clients a new delivery option for legal services.

David Goldenberg, a founding partner of VLP Law Group LLP, a virtual law group, explains his firm is centered on four key principles:

1. High value legal services: “We recognized that clients don’t necessarily want less expensive legal services. Rather, they’re looking for high value with the legal counsel they need,” explains Goldenberg. “That business reality combined with significant advancements in legal technologies enabled us to build a ‘virtual’ practice, where overhead costs are kept low and where fees are flexible and value-driven so we can offer sophisticated legal services that clients are seeking.”

Goldenberg explains that he and his colleagues have modified the traditional law firm financial formula. “We only spend around 15 percent on overhead, most of which is allocated to technology investments,” he says. And rather than the typical model where partners share all expenses and profits, Goldenberg explains they take a percentage off the top to manage the practice, allowing the firm to offer higher value to clients for legal services.

2. Growth potential by design: Goldenberg emphasizes that even as they created their vision for a virtual practice, he and his partners knew they needed to design it with growth potential in mind to ensure long-term success. “We wanted to be able to expand the business easily and cost-effectively if we desired,” he says. “So it had to be scalable -- whether we might choose to grow geographically or in the scope of the services we offer or practice areas in which we specialize.”

The firm’s focus on scalability has paid off, according to Goldenberg. VLP Law Group has grown from 15 attorneys six years ago to its current roster of more than 40 attorneys throughout the U.S. “We had an early understanding of how we could leverage cloud technologies to maintain our virtual work environment,” he explains, “and the synergies we could achieve as we expanded.”

There’s room within the legal marketplace for a wide diversity of legal organizations, and we’ll continue to see creative and different ways that legal services can be delivered.

3. Core focus on technology:  Goldenberg emphasizes that technology plays a significant role in the organization, what he describes as the “key enabler to a virtual legal practice.” He explains the firm operates on a robust technology platform, utilizing its own server and a private cloud arrangement, with encryption protocols throughout. In addition to enabling all employees to work remotely, he says that the technology platform protects clients’ information and maintains the highest levels of security available. 

4. Practice areas matched to virtual law firm model: Goldenberg says one of his organization’s key principles is to exclude any practice areas that don’t fit well within the virtual model -- for example, larger deals which require the firm to maintain associates who may or may not be busy during the year. But he explains his group does provide legal services across a broad scope of practices areas and industry sectors, to clients of all sizes, from early stage start-ups to Fortune 500 companies. 

Goldenberg expects more virtual legal firms will emerge in the coming years. “There’s room within the legal marketplace for a wide diversity of legal organizations, and we’ll continue to see creative and different ways that legal services can be delivered,” he says. “For me and my colleagues, our virtual firm is an exciting and flexible alternative to a typical law practice -- and one that many clients value as well.”

Check back soon for Part 2 in the Future Law Office series on virtual law offices.

For more insight on other trends having an impact on the legal workplace and the business of law, visit Robert Half Legal’s Future Law Office.