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How To: run a 'virtual firm'

Solicitors looking to work in a dispersed law firm are usually motivated by the same driving forces: a desire for greater flexibility and money, and a need for good support and infrastructure.

Clients, on the other hand are driven by different factors: an improved level of service but at the same, or even reduced, cost. So, how is it possible to satisfy such different, and even competing, imperatives? Surely, something has to give? In truth, many aspects of the conventional law firm are absent in the dispersed firm, but then that is the whole idea. A dispersed law firm uses technology and modern working practices to drive efficiencies and reduce overheads, while ensuring that all the positive elements of a conventional law firm remain firmly in place.

What’s missing?

1. Too many bricks. The law firm atrium always seems to be the one feature to attract the most resentment from clients, as they wait in reception for a meeting and ponder the magnitude of their most recent bill. After all, they are just here to meet a few people, not to study architecture. In a dispersed law firm, by contrast, solicitors work from their own satellite offices, which may or may not be within their homes. It is true there still needs to be a smart head office to undertake the firm’s administration and to host pleasant meeting rooms, hot desks and other facilities. After all, we are talking ‘clicks and mortar’ here not a virtual entity that survives in the ether. But the central office of a dispersed firm will occupy a fraction of the space taken by a conventional firm because of its very nature, and this leads to some significant cost savings.

2. Too many people. Solicitors in a dispersed law firm need to be experienced individuals with strong track records, because they are the people from whom clients want to receive advice. Paralegals also need to be available for low-level work, such as bundling, but clients of dispersed firms do not expect to pay for juniors and trainees to learn on the job. The lack of duplication at the fee-earning stage is a huge money-saver for clients. The same goes for support staff. A well-organised dispersed firm will have a support staff-to-solicitor ratio of about 1:10, whereas a ratio of 1:1 is more common in a conventional firm.

3. Management meetings for lawyers. Someone has to run the business and do so in an efficient manner. Accounts, compliance, marketing, IT personnel and process management all take up valuable time and resources. However, in a dispersed firm non-fee-earning work is centralised at a head office where it is handled by individuals specialising in doing just that. Why leave compliance with the money laundering regulations to solicitors when an administrator, armed with the latest online verification databases can manage the task? Lawyers are best left to focus on their chosen career path.

4. Politics and stress. A dispersed law firm should be about equality, fairness and transparency, which means that solicitors should have the same business title, the same performance-based remuneration deal and the same access to information. These factors, combined with an absence of harsh billing targets, leave little room for insecurity and stress, which are surely the ‘mummy and daddy’ of office politics.

So these are the missing elements in a dispersed firm. But you do not need to be Stephen Hawking to know that if you take away elements from an existing formula, you will be left with a black hole and ultimate chaos; unless, of course, those elements are all replaced with worthy substitutes. Unsurprisingly, technology plays a large part in that particular equation, because good IT is simply the backbone of any dispersed law firm. In fact, when it comes to IT, a dispersed firm needs to have better systems and spend more money than any conventional firm. It is not unheard of for dispersed firms to spend 7% of turnover on IT, compared with an industry norm of less than 2.5%. A good IT platform and intranet will enable a dispersed firm to operate in a seamless and cohesive manner, just as if everyone were under one roof.

Finally, there is the glue that sticks the whole thing together. No matter how good your systems, processes and IT, there is simply no substitute for personal interaction. In a dispersed firm it is even more important to create opportunities for lawyers and support staff to socialise and interact. From a business perspective, people need to know each other well to market the firm properly, to work in teams effectively, and to refer work to colleagues with confidence.

It is not enough to expect people to make their own arrangements. Promoting firm-wide drinks, lunches, parties and sporting events will help to engender the culture and personality that a dispersed firm needs. In fact, it is important to spend more time and money on inter-firm social events than any conventional firm would ever dream of spending. Such events inevitably turn out to be immensely enjoyable for all concerned – and at the end of the day, isn’t that the whole point of it all?

James Knight is managing partner at Keystone Law

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