Virtually legal

Charlene Quincey, a Canadian living in Toronto, and Katy Sheehan, an American living in Washington State, both graduated from the City University of New York School of Law and wanted to work together. But they figured the distance would make that impossible. “We started to do some research, under the assumption that Charlene would move out to Washington,” says Sheehan. “Long story short, Charlene discovered a virtual law firm, and we decided to give it a try.”

Their firm, Olea LLP, “went live” in March 2009, offering a variety of legal services, including estate planning, wills and trusts, small business setup, contract and document review, legal research, and family law services — all online through a secure Internet connection from the Olea website.

Although they’re thousands of miles apart geographically, both women are licensed to practise law in Washington, and so they offer legal services pertaining only to Washington State. “I’m in the process of becoming licensed in Ontario,” says Quincey, “and once fully admitted, I intend to expand the VLF. It’s our hope to someday have a multi-jurisdictional and international practice.”

The rising costs of running a traditional law business, massive cutbacks and salary freezes at large firms, and the explosive growth in online technology have all led to the rise of virtual law firms (VLFs). A VLF is one where much of the firm’s operations — law books, client files, practice management tools, meeting spaces, and so on — are entirely online.

Geographic separation isn’t the only reason to start a VLF. North Carolina-based Stephanie Kimbro was looking for a way to take care of her young family and serve a wider range of clients.

After working in a traditional law practice, I noticed there were a large number of moderate- or middle-income individuals without convenient or affordable access to legal services,” she says. “At the time, I was also looking for a way to have a more flexible schedule and better work/life balance.”

As it happens, Kimbro’s husband, Benjamin Norman, is a software programmer. Together, they developed a web-based software, Virtual Law Office Technology (VLOTech), which she not only uses to practise law through Kimbro Legal Services, but also markets and sells to other lawyers and law firms.

To ensure that their firm provides secure, confidential legal services, Quincey and Sheehan are using VLOTech. “Because of the ethical issues regarding confidentiality and the unauthorized practice of law, setting up an online firm requires security,” says Quincey. With VLOTech, clients each have their own secure homepages, where they communicate with their lawyer and work on their files.

For both of these virtual firms, being able to provide affordable legal services to those who may not otherwise seek them is a prime motivator. Olea’s aim is to reach “the many people who refrain from obtaining legal services or from even asking a question for fear that it will be too costly.”

A virtual law office significantly cuts down on overhead costs, which the lawyers can then pass on to the clients with lower fees. “My fees are less than in a traditional firm, but at the same time, I’m also able to respond to and provide legal services more efficiently using the technology,” Kimbro says.

“I have minimal overhead because I have no office lease, no expenses tied to an office, limited office supplies, and I’m almost completely paperless. If I need an assistant, I hire a virtual assistant and work with her completely online as well.” The VLF also provides more flexibility in terms of billing and payment options for clients, she adds.

Richard Granat, president of Florida-based DirectLaw Inc., also points to the benefits of increased efficiency. “On our sites, the client completes an online questionnaire,” he explains. “A first draft of the document is immediately created as soon as the client clicks the submit button.

With the now-completed document on hand, the lawyer is ready to ask additional questions or modify the document as appropriate. “This is a much more productive process than having the client visit the lawyer in his or her office for a face-to-face interview, where the lawyer takes notes and then goes off and cuts and paste together a document,” he says.

To set up a virtual practice, lawyers will first, obviously, need a website. Then they need to acquire the technology to serve their clients in a secure environment. “If a lawyer can do email, they can run a virtual law office online,” says Granat. Like Kimbro, Granat provides VLF software, mainly to sole practitioners and small law firms in the United States, though there are plans to offer it in Canada soon.
In fact, B.C.-based Heritage Law recently signed on with DirectLaw to provide virtual legal services starting in the summer of 2009. Heritage Law Online will initially offer automated wills, powers of attorney, and representation agreements for B.C. residents, with plans to transition to other legal services once it’s up and running.

“The virtual law model seems to be a natural extension of our already unique, technology-focused set up,” says principal Nicole Garton-Jones. Heritage Law is a “paperless” firm that uses practice management software to centrally manage billing, time tracking, matter information, contacts, appointments, and documents. All staff log into a remote secure server over the Internet, where all firm data and software applications are stored. A VOIP phone system allows 10 staff members in 10 different locations to use the same phone line and system, and a remote answering service answers client calls when staff members are out of their offices, which are located in their homes.

Garton-Jones decided to build a virtual firm for three reasons: to serve the approximately 50% of British Columbians who do not have basic estate planning documents; to be proactive in the face of observed trends in the legal profession indicating that it will become more commoditized and impacted by technology; and to underline her firm’s unique model, centred on the concept of how to enable work/life balance through the use of technology.

Heritage Law is likely one of the first firms in B.C. to implement a virtual law system. As part of her agreement with DirectLaw, Garton-Jones will be helping the company prepare documents for use in British Columbia.

Companies like DirectLaw and VLOTech will set up their software for the firm, then charge a monthly subscription fee for its use. Other costs might involve advertising the lawyer’s services online or elsewhere. But before advertising their services, lawyers need to have clear vision of how they want to structure and operate their virtual law practice, says Kimbro.

Will you be providing only unbundled legal services such as legal document drafting, or full-service representation in addition to unbundled services? Will you be operating a completely web-based virtual law firm, or virtual law services in addition to your full service traditional law practice?

The benefits to running a VLF include the opportunity to expand your client base geographically, 24/7 access to your law practice for you and your clients, the ability to work remotely, a better work/life balance, environmental friendliness, and lower overhead costs. Drawbacks might include the isolation and lack of face-to-face contact with clients.

Is this a sign of the future of legal practices, or at least a significant proportion of them? For his part, Granat has seen a steady increase in clients over the years. “As the economy has turned down, consumers are looking for reasonable legal fees, and lawyers are looking to cut their overhead.”

Granat also points to the changing demographics and what he calls the “connected generation,” those who have grown up with computers and internet access. “At some point, every law firm that wants to have as their clients the ‘connected generation’ will have to have a virtual presence where legal services are online.”