The LPO industry has increased substantially over recent years. This increase can be attributed to factors such as higher efficiency levels with the aid of cost effective process. This growing trend is observed to influence the business models of the law firms.
The entire outsourcing concept revolves round the cost-effectiveness, product efficiency and profitability. With product efficiency as the chief objective to be achieved in the course of business; the need arises for reconsidering the traditional business models based on hourly billing rate and the pyramidal structure with many associates and fewer partners. Virtual law firms have evolved as a result of one such attempt to change the traditional business model. According to Wikipedia, a virtual law firm is “a legal practice that does not have a bricks-and-mortar office, but operates from the homes or satellite offices of its lawyers, usually delivering services to clients at a distance using technological means of communication.” Most have a central function responsible for the accounting and administrative side of the practice. Virtual law firms are formed and regulated in the same way as traditional law firms, but their lawyers may be self-employed consultants rather than partners or employees.
The first recognized virtual law firm is Woolley & Co., which was founded in England in 1996. Perhaps the best known virtual firm pioneer, however, is Axiom, which was founded in 2000 in the United States. Today, Axiom is some 550 attorneys strong and operates internationally.
A virtual law firm has the following characteristics:
1. Has a stable core group of attorneys;
2. Operates under one legal entity, such as a partnership or a proprietorship.
3. Has established collaborative relationships with other, specialized law firms that possess expertise that’s occasionally needed;
4. Is glued together with appropriate computer and telecommunications technology such as project management software or a Virtual Law Office (VLO)
5. Tends to have low overhead because of the ability of some or all attorneys to work from home or a low cost remote office.
6. Expands and reduces personnel as needed.
The benefits of Virtual Law firms are as follows:
– Save and manage data across geographic locations securely and efficiently.
– Operate with lower overheads than traditional law firms. Lawyers find they can bill fewer hours but still make more money via a virtual firm because of the lower overheads.
– Environmental benefits due to operations carried on as paperless offices.
The Virtual law firms can open up new avenues for the LPO industry. The Virtual law firms have an advantage of creating new opportunities in the legal field without having any need to own proper office and staff as opposed to the traditional law firm. These firms can operate cost-effectively by outsourcing process-oriented work to LPO service providers. LPO can provide pool of talent to law firms with higher operational efficiency and substantially lower cost. A director of a Melbourne law firm states that the virtual set up enables to provide savvy and more competitive and a better work-life balance as its contractors can work wherever, whenever as long as they have a good internet connection. Such non-conventional business structure can pave way to providing interesting opportunities for LPOs.
LPOs can assist the virtual law firm so that they can concentrate on the more complex matter leaving the rest to be taken care of by LPO service providers.