There has been a 38 per cent rise in the number of lawyers at ‘virtual’ law firms in the past year as the pandemic leads to a dramatic shift towards hybrid and flexible working arrangements,
There are now 1,875 lawyers working for ‘virtual’ law firms, up from 1,355 a year earlier. This increase is even more significant when compared to pre-pandemic levels – jumping 50 per cent from 1,272 in 2019, according to data from accountancy firm and business advisory Hazlewoods.
Covid-19 has led to a shift in attitudes towards working arrangements as hybrid working takes hold nationwide. Lawyers have particularly felt the benefit of having an improved work-life balance.
Virtual law firms tend to offer lawyers more freedom over the work they take on, whilst being able to carry out their work remotely.
Virtual law firms
A ‘virtual’ law firm is a decentralised legal practice where lawyers work remotely and use shared services provided by a central hub. Most variants of virtual law firms have their lawyers as self-employed. ‘Virtual’ firms have central services responsible for functions such as compliance, accounting and administration.
There has been greater acceptance of virtual meetings among clients, as a way of communicating with their lawyers, a development beneficial to virtual law firms. This offers a lot more flexibility, allowing clients to manage their legal affairs from anywhere in the world, whilst maintaining high levels of service.
Virtual law firms do not require traditional office space and as a result, benefit from lower overheads. This model of working means that profit margins can often be higher as fewer back office staff and facilities are required. This enables a higher share of revenues to be returned to the lawyers.
This fast-growing sub-sector shows no signs of slowing down. Some of the biggest increases in number of lawyers over the last year include Nexa Law, the Shropshire based virtual firm, which had a 95 per cent increase to 105 lawyers in 2021, up from 54 in 2020.
Keystone, a Top 100 firm has seen its number of lawyers grow by 30% to 456 lawyers in 2021, up from 350 in 2020 and Setfords, a Top 200 firm has seen its number of lawyers increase 40% to 350 in 2021, with revenue growing 30 per cent to £18m last year.
“The virtual law firm model has been given an unexpected boost by Covid, even with more traditional firms returning to their offices. It’s clear that what was once considered an outlier in the legal industry is quickly becoming part of the mainstream,” said Jon Cartwright, partner at Hazlewoods.
“Many clients have accepted that liaising virtually works just as well as in-person meetings.Jon Cartwright, partner at Hazlewoods
Some may say the benefits are even greater as it offers both lawyers and their clients much needed flexibility while reducing the need for travel and office space.”
“Some argue that the legal profession is known for being a fast-paced and long hours culture. This virtual model can mean that lawyers have more control over their hours, allowing them to work more flexibly in a way that works around their lifestyles and families. Some also argue they also benefit from a greater share of the revenue they create due to lower overheads.”