Without walls

Contemporary virtual firms founded on ethical principles or other unique selling points, and not price alone, are proving surprisingly successful. Nicola Laver reports

Virtual law firms and remote working are nothing new. Let’s face it, a decade or two may as well be a hundred years in tech years.

What is novel is the growing trend for new virtual firms to be quite deliberately founded on a unique selling point (USP) that successfully differentiates them from others and which drives often phenomenal success.

Today’s virtual firms undoubtedly share common features and face similar challenges. They are leaner (less overheads); greener (minimal carbon footprint); and weather resistant (cloud technology is immune to hurricanes). They also have to deal with the challenges of privacy and data protection.

The desire to facilitate flexible working is traditionally a key driver for the founding lawyers leaving traditional legal practice to go virtual; but that is by no means the only distinguishing feature of the most forward-thinking virtual firms, as three of them illustrate.

Game changers

Aria Grace Law’s model is unique, giving 5 per cent of its profits to charity and paying the highest rates in the market to its lawyers (USP: wealth distribution).

Harper James Solicitors is transparent on costs right down to the minute (USP: its subscription model and pricing plan). Carbon Law Partners is founded on a clear mission, values and beliefs (USP: seven ‘Carbon qualities’).

Lindsay Healy, founding partner of Aria Grace Law, says the firm’s model is a “game changer”. He explains: “Our focus on our lawyers delivers on diversity, flexibility, equality, equal pay, equal share of profits and giving back to society. Because we distribute all profits back to the lawyers (having paid for the costs of the business and having given 5 per cent to charity), we consequently pay the highest rates in the market to all our lawyers.”

Clients particularly love this model. He adds: “We’ve seen a real influx of clients from the tech sector whether it be fintech, foodtech, insurtech or edutech as they want to engage with a modern, flexible and ethical law firm – and that’s exactly what Aria Grace Law offers.”

Lower costs 

Clients may love the businesses model but does it make good business sense? Yes, says Healy, they get “amazing lawyers” at 25 per cent of what they might otherwise pay. How so?

He explains: “Our clients get legal excellence at low cost as we are all partners, mostly from City or global elite firms such as Slaughter and May, Norton Rose, Clifford Chance.” But they pay 25 per cent less than those firms because of the firm’s “low cost model where we don’t have expensive overheads or the same cost base as the bricks and mortar firms. For our lawyers and clients, it’s a win/win”.

“We provide the same (or better) excellence but at much lower cost. So, our USP is ultimately about wealth distribution: all lawyers are paid equally (85 per cent of their clients’ billing) and share in the profits equally (pro rata billing). This is the same for everyone, including me as founder. No-one profits from anyone else’s work. Our success is based on treating clients, lawyers and society as one ecosystem: where one does well, everyone does well, increasing exponentially.”

Subscription service

Toby Harper sat on his completed paperwork for six months until the day he reached three years’ post qualification experience (PQE) so he could at last submit his new law firm application.

He then set up Harper James Solicitors in 2014 to make legal services more cost-effective and accessible, “particularly for entrepreneurs and early-stage, high growth venture capital backed businesses”.

The firm’s virtual model is founded on an innovative subscription pricing model which, explains Harper, is what sets the firm apart and allows it to operate “unlike any other law firm that we know of”. Lawyers work remotely allowing the firm to keep overheads costs low and it offers increased affordability to its start-up and small/early-stage growth clients. “This means”, says Harper, “we can provide genuinely affordable prices with no compromise on the level of legal expertise”

Nearly all the firm’s lawyers have 10 years’ PQE and have worked for top 100 UK

law firms or in-house at large international businesses. So how does such a subscription model work in practice?

Harper James offers its ‘Enterprise’ subscription service at £189 a month which includes one hour of legal support each month (this rolls over if unused, so clients can accrue support for when needed). Intriguingly, clients under the plan also get further access to the firm’s solicitors at the hourly rate of just £99.

And it doesn’t end there: the firm bills by the minute so its costs are completely transparent; and clients only pay for what they receive. Harper says: “The low-cost entry point means it’s also a low risk decision.”

The firm also offers further pricing plans – On Demand and City plans. “This means”, explains Harper, “we appeal to businesses who share our passion for innovation and growth, making the correct legal advice accessible for all and driving our growth as we fit the desires and capabilities of our current and future clients”.

It’s not just the clients who benefit, as Harper explains: “Subscriptions also benefit us as a firm, allowing us to maintain exceptional levels of cashflow, providing security to our staff and our clients – a result enhanced by our process of billing monthly and collecting our fees by direct debit.”

People not pricing

Carbon Law Partners is a firm based not on pricing structures, a wealth distribution model or tech innovation but rather on an ethical premise around its people. The key to Carbon, as Michael Burne explains, is its clear mission, values and beliefs leading to seven ‘Carbon Qualities’.

“Our mission”, he says, “is to ‘create and develop the conditions for exceptional people to flourish’ – whether that’s our staff, our partners or their clients. It’s always about people and how they can succeed.

“Our values are to be astute, candid and enterprising in all that we do and in how we engage.” The firm’s four ‘beliefs’ relate to what it perceives to be deficiencies in the more traditional structures.

These are, explains Burne, like “four solid foundation columns that sit on the foundations of mission and values”. According to Burne, Carbon’s beliefs are:

• Real Equity Choice – we give all the opportunity, but not the obligation to acquire a real equity stake in our business.
• Freedom in retirement – retire when and how you want and have the option to transfer your client base to a colleague or the firm for value.
• Quality Assurance – we expose every solicitor in our firm to external audits of files selected at random, without notice. This keeps standards high and reassures clients and new partners.
• Developing our people – we provide the tools and access to technical and skills development for all.

Putting these into practical context, the firm then looks for seven ‘Carbon qualities’ [see fig.1] in everyone it engages with whether that’s the staff and partners, or suppliers. Burne says: “They ensure we judge against consistent expectations for how we do business.”

Pricing success

Most law firms measure success by reference to its turnover and profits and, perhaps, numerical growth – but there are other ways by which success can be defined and measured.

For instance, while numerical successes are important for Aria Grace Law (the firm has grown in the last 18 months from one lawyer and two clients to 24 lawyers and 90-plus commercial clients), Healy says: “We have some of the most amazing client testimonials and companies that want to back us and for the Aria Grace Law model to succeed”.

However, “real success for us will come when we see an accelerated take up of our model of diversity, equality and equal pay/equal share of profits as a norm in business; not just in law but accountancy and other service industries.

We want to show that by using the Aria Grace Law model, society can benefit and everyone can earn very well, not just ‘the few’ earning excessively”.

Yet the most successful or unique virtual firm in existence will cease to function at its best (or at all) unless it keeps pace with the right technology. Indeed, Healy describes technology as “our version of a traditional building”.

Aria Grace Law uses it for everything: from the usual back office to managing workflow, internal interaction, intranet, website and social media. It uses SaaS-based tech, state-of the-art security from industry leaders like Microsoft who provide bank level security and encryption.

This means the team can work from anywhere in the world; “they always feel central, relevant and up-to-date. This is one of the major advantages over bricks and mortar: if you are not part of the mothership you may feel like an outsider”.

Is it burdensome? Healy says: “You don’t need complex systems, it’s just plug and play, scalable, cost-effective, secure and above all simple to use.”

Toby Harper speaks of the firm’s particular IT focus on business development. “We use modern tech-based marketing techniques, focusing on SEO, digital newsletters, social media, and digital PR to generate new leads.

Our business development is also highly data-driven, and our use of various pieces of joined-up software and cloud-based storage gives us the edge when it comes to allowing our solicitors to focus on their work rather than be distracted by administration and process.”

Connecting glue

Trainer and consultant Hélène Russell of The Knowledge Business finds traditional midsized law firms tend to follow a risk-averse path in relation to new technologies as well as working practices. “My experience of virtual law firms”, she explains, “is that their fundamental nature means that they depend upon technology as glue to connect their lawyers and clients and have to adapt quickly to changes, so they tend to win over traditional law firms in agility and use of technologies.

Their nature also means they attract talented lawyers who prefer working using technologies or in a more agile way.” She points to the importance of better interaction and collaboration between law firm leaders and law-tech specialists “to help inspire more innovative thought on delivery methods and business models”.

For those considering a move into the virtual space, one of the key issues to consider early on is, says Russell, whether your staff are technologically literate and able to work with clients remotely. “They will need higher emotional quotients (EQs) and, if working internationally, strong cultural understanding to avoid the misunderstandings which happen more easily through remote contact”, she explains.

And to stay in the game and remain competitive as more firms move into the virtual space, she offers a word of reassurance: “There’s still plenty of scope for more legal services to be delivered to clients remotely/ virtually and in a more niche and customer centric way.”

Achieving a balance

Some lawyers live to work while others work to live, though every lawyer needs to strive for a work/life balance. This is a key issue where the virtual firm model truly out performs the bricks and mortar competition, whatever their USP.

Harper does not deny the key reason for working virtually is to offer a sustainable and significant work/life balance to its solicitors, but they have the additional benefit from financial security through the firm’s “totally transparent billing and charging practices”.

They can choose when they work and how many cases they take on, “giving them true flexibility when deciding how to practice”.

Over at Aria Grace Law, Healy says: “As we are a virtual law firm with no set billable targets or hours, lawyers can choose when they wish to work and where (whether it be at home or at a client’s premises). It also means that if lawyers prefer to work on a weekend rather than the weekdays, they can have that flexibility and equally be of value to clients that need urgent work or support before a Monday morning have that available too.”

The importance of lawyers being able to reach and maintain a viable work/life balance for their mental and physical well-being cannot be underestimated.

As Burne points out: “Work/life balance is important to our partners who are seeking to build businesses of value and grow their incomes. So while they are ambitious and work hard, they also reap what they sow – a greater return for the time spent for themselves and their families. “With that comes choice and freedom.”

Nicola Laver is editor of Solicitors Journal and a former solicitor