Virtual law firm or chambers practice?
Tim Summers of Temple Bright LLP explains the difference...
Recently there has been a proliferation of “virtual law firms”. In this model, self-employed lawyers run their own practice, often from home, using the internet to access the firm’s resources. The structure enables lawyers to use their work time in the most productive way (that is, chargeably) while avoiding the bureaucratic burdens of the sole practitioner. The firm’s central entity acts as a service provider to its lawyers, offering a regulated body and insurance, and other benefits to a greater or lesser degree.
The model has proved popular, and not only among lawyers wishing to work part time. Many enjoy the greater autonomy and flexibility and the release from big firm politics and expectations which the virtual firm offers. There is also the promise of earning more in return for less work – as virtual firms normally allow their lawyers to take home the majority of their fee income while paying a percentage towards the firm’s management. For all except the equity partners in the larger traditional firms, this is likely to mean a substantial increase in take home earnings.
The success of the model has been spurred on by advances in internet-based technology, but there are also larger developments – notably the inflation of the traditional law firm pyramid structure to Egyptian proportions since the City’s Big Bang, and the increased workload for individuals at such firms. The result is a large population of disillusioned associates and salaried partners seeking an alternative outlet for their skills. One only has to consider the popularity of Roll On Friday, which in my own City firm ten years ago was known as a “fed up associates” website, to see how endemic these problems are.
Hence the ready market for lawyers willing to join. However there is a question to be asked of any virtual firm – namely, to what extent is the organisation truly a firm and not just an administrative hub for a group of sole practitioners? Deserving the name of a firm would seem to require some fundamental attributes: a characteristic internal culture, the opportunity to work in teams, referrals of work and a client-facing brand and message which is more than the sum of the firm’s parts (i.e. its individual lawyers).
To put it another way – how much does the virtual firm contribute to the quality and volume of its lawyers’ instructions? If its contribution is significant, whether through referrals and teamwork or the strength of the firm’s marketing, brand and message, there seems enough value added by the firm to justify the lawyer’s financial contribution. But if the firm is little more than a provider of some basic resources, candidates should consider whether the level of contribution is good value for money – particularly once established processes make it easy for the firm to “plug in” new lawyers.
An alternative law firm model which takes some of the attributes of the virtual firm but deploys them to address these concerns is the chambers practice. This uses the same internet-based technology as the virtual firm, and similarly promises its clients lower fees and its lawyers greater autonomy and flexibility. However it also offers its lawyers many of the best features of a traditional firm – and so offers greater continuity with this background and avoids any feelings of isolation or treading water which could come from working purely “virtually”.
Personal meetings are the best way for relationships and business to develop. As such, the chambers practice will be based in a physical office which is the hub of the firm’s activity – although attendance there is unlikely to be mandatory for lawyers. The firm will have thought carefully about its brand and its marketing should describe a cohesive way of working; it may have a preferred client profile and sector specialism; it may focus on a particular region. There will be a distinctive firm culture and the lawyers will be encouraged to share contacts, refer business and work in teams. Although the lawyers will be self-employed and work for themselves, as in a virtual firm, their approach will be strongly collegiate. The chambers practice has a unified identity, its own DNA.
The name of the model derives from a barristers’ chambers, for its fundamental structure (as with the virtual firm) involves self-employed lawyers retaining the greater part of their fee income. The different emphasis in the name arises because, firstly, the chambers practice is only partly virtual and places an emphasis on its physical office. Secondly, the firm’s message to clients will focus on qualities associated with barristers’ chambers, namely the specialist expertise of its lawyers, rather than the firm’s virtual credentials. But unlike a barristers’ chambers such a firm remains a single “practice,” in that its lawyers will habitually share work and team up on transactions.
The chambers practice combines the best aspects of the virtual law firm (lower cost base, increased efficiency and greater freedom for its lawyers) with some attributes which have been tried and tested in the best traditional firms – careful branding, a distinctive approach to client work, mutual support in work-winning and advising. Its “clicks and mortar” business model will appeal to lawyers who seek greater autonomy while staying rooted in an organisation with a vibrant, non-virtual culture and community.
Tim Summers is a founder member of leading chambers practice Temple Bright LLP.
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