Carolyn Elefant at MyShingle.com has taken Lee Rosen of Divorce Discourse to task in her new post ‘The Virtual Law Office Debate’. Why? Because he has written a provocative post called ‘What the Virtual Law Office Advocates Are Not Telling You. Whenever change is inevitable, before it becomes mainstream, it is framed as a debate. Lawyer Marketing, Twitter’s value, Blogging as a means of attracting clients, social media in the work place, the internet as a game-changer. The list is endless. And so when I see challenges or debates or posts like Lee’s I know the times they are a’changin’ and wholesale mainstreaming of a concept is just around the corner.
There are clearly two sides to the issue. Those who are embracing it and running ahead of the pack are recognizing that how we deliver services to clients has to change because of economics. Technology is a vehicle for this change.
Lee makes a few observations on the topic of virtual law offices and by extension, unbundled legal services. First, he doesn’t see the demand by clients for a virtual platform and unbundled legal services…yet. Second, he believes a percentage of those lawyers buying into the concept of virtual law offices do not get (or are not being told) they still have to market to the consumer and work hard to build a client base. Third, he is comparing unbundled legal services via a virtual law office platform to the offerings of LegalZoom and others. As such, he presumes the average lawyer will be outclassed and outspent in trying to attract this segment of market.
I’m going to challenge these thoughts point by point.
First, if there isn’t a sweeping demand now, there will be. Why? Economics and the courts. The courts are looking to make changes allowing lawyers to represent clients in an unbundled way when traditionally they required full representation and accountability. It is much better for the courts to allow potential pro se litigants to have this option available to them. They understand litigants are facing economic hardships, don’t necessarily qualify for Legal Aid (which is losing resources due to shrinking IOLTA accounts) and if this dramatically increasing segment of the population goes completely pro se the courts will simply be overwhelmed. In Connecticut, I had the good fortune to discuss this with one of our chief justices and they are exploring unbundled services with, shall we say, ‘great enthusiasm.’ Connecticut isn’t alone. Education by the lawyer and encouragement by the courts will create the demand because it addresses a pain point for potential clients – I don’t want to do this completely alone but I can’t afford to pay for A-Z representation.
Second, Lee believes lawyers who are creating virtual law offices think they are going to get clients without marketing. I find this ludicrous. As stated, whether a traditional law office or a virtual one, a lawyer must get clients through marketing, referrals, etc. I know two of the credible vendors of the virtual law office platform, Stephanie Kimbro and Richard Granat. They are both faculty at Solo Practice University. NEVER have they EVER suggested the platform does not require good old fashioned marketing strategies. If there is a lawyer walking around in a daze because s/he created a virtual law office and thought they didn’t have to market, that’s the lawyer’s issue.
Third, the lawyer who chooses the virtual law office platform, in my opinion, is not someone who sees Legal Zoom as their competitor. I believe this assumption by Lee was not accurate. The lawyer who chooses a virtual law office platform (and generally unbundled legal services) is someone who is looking to address an ever-growing segment of the population – the potential client who would have hired a traditional lawyer and paid the full fare, but economic times have prevented them from making this choice. These people are not necessarily the Legal Zoom market. They don’t want to be a DiY’er but they think there are no other options because they haven’t been educated there is another way to work with a lawyer. They want a safety net, someone to address what they are uncomfortable doing during litigation or they want someone to review their work. They still want to be referred to a living, breathing counselor at law whom they can still have a relationship with. They have the funds for as-needed representation which can be done via the virtual law office platform because it is cost-effective for the client and the lawyer.
Moreover, the virtual law office platform does not necessarily equate to discounted services or low-end services or even unbundled services. It is a suite of technologies. How the lawyer utilizes these technologies is up to her.
But, clients are demanding they be serviced differently and they are voting with their wallets.
The key is matching up the right client with the right lawyer.
Please read the posts I referenced and the very thoughtful comments/responses from Richard Granat, Stephanie Kimbro and Donna Seyle.
Great points Susan.
While I have bought in to the idea of operating a virtual law office, using VA’s, etc., I’m not sure my client base has. Many of my clients don’t know what Skype is, for example. I understand they must be educated, but it is a very time consuming process.
I see the virtual wave approaching my area, and I’m ready to ride, I just need to convince my clients to come along.
Hunter Goff
Orlando, FL
Hunter, providing educational marketing on a new way of delivering legal services combined with traditional marketing to get clients is definitely a double whammy and time consuming, especially for the solo practitioner. However, we are going back to the future in the sense we are in a sweat equity economy. It’s no longer about writing a check to outsource your marketing (yellow pages, traditional advertising, etc.). We have to not only be personally active and involved in our educational marketing activities, we have to be leaders in this activity. Yet, I don’t believe it’s an option anymore. A lawyer who goes virtual has to be ready to take on the responsibilities. Being on the forefront of change is in many ways a thankless, exhausting task…in the beginning. But it can be very rewarding after
Susan you make some very good points. I would add:
1. LegalZoom and the other non-lawyer legal form sites can’t provide legal advice. I can give you many examples from my own virtual law practice where legal advice makes a major different in legal outcome. Legal forms alone, sometimes solves a legal problem, but often it does not. The challenge for law firms is to figure out a way to provide an offering that is price competitive with LegalZoom, but which offers more value. Moreover, as a profession we should not walk away from the legal problems of moderate income clients. We have skills that will result in better legal outcomes for moderate and middle income clients. As a profession we have an obligation to provide services at a lower price to individuals who can’t afford higher fees and we should figure highly productive methods of serving them.
2. Adding a virtual law firm presence to your web site is not only for providing low-end legal services. There are benefits that can accrue to any kind of law practice. Some large law firms have had extranets for their clients for years.
3. Providing a low end, lower priced legal service can be a marketing strategy for providing higher end, higher fee services. A client of http://www.directlaw.com, that is a personal injury firm, is using a low end service to build relationships with prospects so that the prospects turn to the law firm when they have a high value PI case.
4. There are many advantages to having a “virtual law firm capability” that a new generation of “connected” consumers will value. See:
http://www.slideshare.net/rgranat/online-legal-services-keeping-pace-with-the-evolving-practice-of-law
5. Revenue derived from Internet only consumers should be part of a law firm’s overall revenue mix. For a solo practitioner, an additional $1,000-$3,000.00 a month in net revenue after all costs, can make a big difference in a year’s income picture.
6. There are some examples of law firms generating significant income from just a virtual offering, but they have learned how to narrow their focus to a narrow niche which provides a unique value-added service, and they have learned how to market their services online. To be successful, as Lee Rosen points out, you still need a marketing plan and a marketing strategy.
7. For many law firms, a virtual offering becomes an important adjunct to the regular office based practice, creating efficiencies that only can be created by using the web as a platform for delivery. It is a component of an office-based practice that is used to enhance the experience of existing clients, as well as a way of differentiating the firm in securing new clients.
8. Finally, the cost of adding these technologies to even a solo practice is becoming trivial or very low. We tested a free basic version of http://www.directlaw.com this summer and experienced great demand, so we decided to end it on September 1, and offer what we call DirectLaw Basic for only $49.00 a month for a solo practitioner.
$49.00 a month is not a significant cost for a solo practitioner to acquire a virtual law firm capability. It is low enough for a solo practitioner to subscribe and test out the benefits. See generally:
http://www.directlaw.com/free-virtual-law-firm.asp
Nice post, Susan. I agree that a virtual platform does not necessarily equate to unbundled services. However, that seems to be the way that virtual platforms are being marketed. Indeed, there are many lawyers (myself included) who have been providing lower cost versions of “high end” services (e.g., energy regulatory, telecom, appellate) entirely online, albeit not necessarily through a client portal, and this type of set up, as I understand, is technically, not considered a virtual law practice.
I also agree with the previous commenter that right now, many clients do not want to use virtual platforms. I have had a lot of trouble getting my clients to use portals rather than just communicate by email. That’s a non-issue, because I suspect that these habits may change and lawyers need to stay ahead of the curve.
Where I do agree with Lee, however, is that whether low-end services are competitors to Legal Zoom or a substitute for high-end services that clients can no longer afford (which is a great point), you need volume to make the practice financially viable – and to generate volume, you need to spend a lot on marketing. I did the math in this earlier post regarding a firm in NY (http://myshingle.com/2009/09/articles/marketing-making-money/what-does-the-good-enough-phenomenon-mean-for-solos/) I think that many people who start virtual firms underestimate the amount of effort involved in attracting enough clients to make it financially viable.
@Richard – thanks for such clarity on the topic!
@Carolyn – I don’t disagree with either you or Lee that educating the consumer is key. And it does take sweat equity – not necessarily big dollars – which I explained in response to @Hunter. But the multiple hats aspect of solo practice has always been there. This is not an additional hat. Just a changing of hats.
The real challenge, I think, you are talking about is a lawyer who goes strictly virtual right from the beginning of their practice AND goes low-end unbundled. They have the most challenging road because it is multiple concepts being introduced to the client at one time. Without targeting the right audience with the right message this can be extremely difficult and unprofitable because you would need volume.
There are too many separate issues being introduced into this debate, though – virtual law practice, unbundled legal services and business planning/marketing – and the fall-guy for poor business planning/marketing should not be virtual law practice technology. It is just a new platform to facilitate the practice of law and an extremely cost-effective one for solos and clients today.
Well said Susan.
I’m not sure who Lee Rosen considers to be “most attorneys” but I think the generalization is both wrong-headed and frankly mis-leading. I operate a full practice virtual law office, and yes I do market my services. When I purchased services from my VLOTECH vendor Steph Kimbro I was never told that operating a VLO would eliminate my need to market the practice. All practices both virtual and traditional have to be marketed. A virtual client portal allows me the flexibility to reach across the state to access my clients (winery owners). I would not be able to do this with a traditional brick and mortar firm. I provide high end services. So who are these attorney’s exactly that Lee Rosen referring to at this point?
Sounds like the beginning of silly season to me.
I have been searching the internet for some hard data on the viability of a VLO and hoping that by posting here as well as other places I might gain some small knowledge.
I started a family law practice in a small town last year (bill $150 per hour) and am up to about $90,000 in gross profits this year. Probably 95% of my clients come from the internet. I do some uncontested work but the majority of my income is contested cases. I would love to switch over to a VLO doing uncontested cases to lower the stress level, gain more mobility, lose the commute, and so on. I am willing to take a significant hit to my net profit but need to know that eventually I will make enough money to, at the least, survive modestly. For me that’s a VLO with a gross profit of $35-40k. I would be willing to move to a third world country and earn $25-30k, at least to start while building a client base. Does this seem feasible given the information provided? I keep hearing that it took X years for my VLO to be successful but no real definition of what successful is. Obviously the definition varies greatly from person to person.
It’s hard for me to think that slowly transitioning from a brick and mortar office to a VLO is a great idea. I would charge a lower rate running a VLO and it would significantly cut into my net profits to do so due to maintaining costly office expenses. I would rather save up $25-30k and go from a brick and mortar to an entirely virtual office, and give my full attention to building up web pages and internet marketing.
Anyways, any hard data or anecdotal data on the profitability of a family law VLO would be greatly appreciated.