Virtual law firms have become a major development in the legal sector. In 2018, Rudi Kesic, Azeem Rashid and Mev Dzihic founded Lawyer 365 in Warwickshire. The company is valued at £5 million and provides public access to legal advice through an application. Users can contact hundreds of listed lawyers by video call or text message from 7 am to 11 pm, seven days a week. Initial appointments are free, 30-minute consultations start at £49, and some lawyers charge £250 for a 60-minute appointment.
Suzanne King, a partner at SQM Legal LLP in Oxford and Bedford, was an early adopter of the platform. She described Lawyer 365 as a growth story that offers a glimpse into the future of legal services. Virtual lawyer platforms aim to replace traditional office appointments. The legal sector has been compelled to adapt due to the COVID pandemic, and recent research from the Lawtech 365 group shows that solicitors have shifted to hybrid and remote working arrangements. Many lawyers have replaced face-to-face meetings with virtual video consultations for the first time.
More than half of solicitors have increased their spending on legal technology in the past 12 months. Almost two-thirds had never advised clients by video before, and 96 per cent stated that they would continue offering video-based legal services even after lockdown restrictions ended.
John Llewellyn Lloyd, Head of Business Services at Arden Partners, noted that the pandemic increased pressure on firms to invest in IT infrastructure and reduce back office costs. However, many firms face limited funds, and partners are often reluctant to commit additional capital. Firms that focus on advisory work are now in a strong position, as they have more advanced infrastructure to deliver legal services efficiently.
Virtual law firms as an established model
Virtual law firms are not new. In 2017, LexisNexis reported that around 800 lawyers were working in virtual firms in the UK. The model has since evolved from an emerging concept into a widely recognised part of the profession. Hazelwood's accountants reported that 1,270 lawyers worked in virtual firms last year, a 22 per cent increase. Analysts believe that virtual consulting firms could reshape the legal profession. The pandemic has changed lawyers' attitudes toward how they want to work, and many are drawn to the ability to control hours and location.
Virtual firms attract talent from regional, mid-sized, and City practices. Keystone Law, one of the largest virtual firms, now has 354 lawyers. It has recruited lawyers from leading firms, including Clifford Chance. Keystone was listed on the London Stock Exchange in 2017 and reported a 35.1 per cent revenue increase to £42.7 million, with adjusted profits before tax rising 56.8 per cent to £5.1 million.
Keystone's virtual model attracts lawyers from medium-sized firms facing rising billing targets who may no longer be interested in equity partnership. Keystone lawyers receive 60 to 75 per cent of their fees, depending on client origin, with additional earnings available for referring work to colleagues.
Other major virtual firms include Gunnercooke, which has more than 230 lawyers, up 28 per cent from last year, and Setfords, which grew from 150 to 220 lawyers in 2019. Setfords is supported by the BGF private equity fund, one of the most active investors in growing companies across the UK and Ireland.
Why virtual law firms are replacing traditional practices
Technology has long driven innovation. It enables organisations to increase productivity and adopt more competitive business models. In law, virtual firms are reshaping how legal services are delivered.
Virtual firms use cloud technology to operate digitally without physical offices. This creates several advantages over traditional firms.
Reduced costs
Virtual firms avoid expenses such as rent, computers, printers and filing cabinets. Cloud-based practice management software allows lawyers to run firms from any device at a fraction of the cost. Traditional firms often struggle with these overheads, which can limit growth. Virtual firms can experiment with different fee structures while maintaining high-quality service.
Client communication
Virtual lawyers have more flexibility to meet clients around their schedules. Traditional lawyers may struggle to find time outside the office. Virtual models allow lawyers to build stronger relationships and provide more responsive service.
Collaboration
Cloud-based case management software supports secure collaboration. Documents, contacts and emails are stored centrally, and access is limited to colleagues working on the case. Shared calendars, deadlines and automated workflows help lawyers manage responsibilities more efficiently.
Operational flexibility
Virtual firms can monitor profitability and adjust operations quickly. Traditional firms may implement changes more slowly. Virtual firms benefit from technology-supported entrepreneurial approaches, allowing them to respond to client needs and maintain healthy profit margins.
Mobility
Virtual firms allow lawyers to work from anywhere. This increases billable time and revenue. Traditional firms that rely on on-premises systems may struggle to stay efficient outside the office.
Are virtual law firms the future
Currently, 1,355 lawyers work in virtual firms, up from 1,270 before COVID and only 803 in 2017. This growth reflects the pandemic's impact and a reconsideration of expensive office space. Linklaters recently announced that employees could spend up to half their time working remotely permanently.
Hazelwoods reported that many lawyers are questioning whether they could earn more at a low-overhead virtual firm by keeping a higher percentage of their billings. Some lawyers also found remote work improved work-life balance. Virtual firms offer greater independence in hours and workload.
Jon Cartwright of Hazelwoods noted that many lawyers could not imagine working fewer than 45 to 50 hours a week in the office six months ago, but have now adapted quickly. The work-from-anywhere model is becoming increasingly attractive.
The number of solicitors working in virtual firms has increased by 7 per cent since the pandemic began. Virtual law is a growing industry with several fast-expanding practices.
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