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January 3, 2011

e-Lawyering Expert: Stay Competitive with a Virtual Law Practice

From YourABA, Dec. 2010

More clients than ever are seeking legal services online, and the market is growing every day with new competitors—online companies such as Legal Zoom, Inc. and “do it yourself” legal kits on the Internet, among them—that are challenging the dominance of the traditional law firm.

Stephanie Kimbro, co-founder of Virtual Law Office software and a virtual law office owner, says in her book Virtual Law Practice that “mainstream legal professionals who have preferred to stick with more traditional law practice methods can no longer turn a blind eye to this change if they wish to remain competitive.”

YourABA recently asked Kimbro to provide some guidance on establishing a virtual presence and best practices for effective e-lawyering.

Just so we all are on the same page, what is a virtual law practice?

Virtual law practice can take many different forms, but the key component is the use of a secure client portal to deliver legal services to clients over the Internet.  The use of technology to deliver legal services to the client is the key to virtual law practice.  A virtual law office has the ability to handle the process of working with clients from the establishment of the attorney-client relationship through to the final rendering of legal services and online payment to the attorney.

A virtual law practice could exist entirely online or as part of a more traditional bricks-and-mortar firm…

Right—a virtual law office may offer only unbundled legal services and be completely web-based, or it could be integrated into a traditional law office structure to serve both existing in-person clients as well as an online client base. 

Virtual law practice may incorporate features that in and of themselves do not create a virtual law office—for example, the use of an unencrypted, e-mail-based “contact us” form on a firm website; renting or sharing a law office space with a virtual receptionist; and having a client extranet or remote access to computers. 

What kind of services do clients want out of a virtual law practice?

Many of the services that online clients are searching for are related to legal needs that can easily be unbundled or handled mostly online before meeting with an attorney in-person. 

Examples include estate planning; business set-up; corporate law; IP legal issues such as patent filing; copyright and trademark; drafting and reviewing contracts; landlord/tenant issues; no-fault divorce; basic legal guidance; and a variety of cases where the client will be a pro se litigant. 

Most practice areas have some services that may be provided to clients online, whether it is unbundled or provided with in-person representation. 

The public is going online to seek legal assistance. They are finding legal service companies that provide some limited services without attorney review.  Virtual law practice permits a licensed attorney to tap into this market for unmet legal needs and help serve the public in a more secure, thorough manner.
 
When considering “Software as a Service”—software accessed over the Internet, rather than a firm’s server—what should lawyers look for in seeking vendors?

It is the attorney’s responsibility to do his or her due diligence in researching the software vendor before using any product to host law office data. When reviewing the vendor’s service level agreement, it is important to look for certain provisions, and if they are not there, to get clarification from the vendor.

An agreement should cover: data return and retention policies; transferring data and compatibility issues; third-party hosting details; server location and geo-redundancy; response time for customer service and tech support; infrastructure to support growth; and costs.

Security is also paramount, and agreements should ensure end-to-end data encryption.

Also, related to that, the attorney should understand how the vendor handles the confidentiality of law office data. Who has access? How are government and civil search and seizure actions handled? How is a breach of confidentiality handled?

Attorneys might want to review the recent PA FEO 2010-200 (2010) or the proposed NC FEO 7 (2010) for additional potential questions for reviewing software vendors.

What are some of the Model Rules to consider when developing a virtual law practice?

The rules for website development are the same for a virtual law practice as for a traditional law office website.  However, with a virtual law office, the website is often the front door to the attorney’s law practice, so it is critical that the site contain content that educates the prospective client and is not misleading.
 
The Model Rules that are most important for the attorney to consider when developing a virtual law practice include ABA Model Rules 7.1, 7.2, 7.3, 7.4 and 7.5, regarding advertising of legal services, updated in 2002 to cover advertising by electronic communication; Model Rule 1.18, “Client-Lawyer Relationship: Duties to Prospective Client; Model Rule 5.5, regarding the unauthorized practice of law and multijurisdictional law practice; and Model Rule 1.6 (a) on information confidentiality, in particular, comments 16 and 17.  Comment 17 provides that lawyers must take “reasonable precautions” to safeguard confidential information and prevent it from going to unintended recipients during transmission.

Many state bar rules of professional conduct and ethics opinions regarding electronic communication were drafted only with e-mail in mind.  Most e-mail is unencrypted, and therefore not as secure as a virtual law office that has end-to-end encryption.  Attorneys should interpret the existing rules to fit with current technology and follow the “reasonable precaution” standard based on the level of security and technology that is available for their practice today.

What are some mistakes that lawyers make in establishing a virtual presence?

Attorneys may incorrectly assume that if they build a virtual law office website and have a secure client portal that their investment will quickly result in paying online clients.  Establishing an online client base, especially for a completely web-based practice, takes a good deal of time and consistency to build a brand for the attorney and his virtual practice.  Starting a virtual practice should be treated no different than hanging a traditional shingle on a new law office, in terms of startup expectations. 

That said, some attorneys may need to be careful about how zealously they market their virtual law office online.  With the ease of use of online social networking and media, it may be tempting to cross the line in communicating with prospective clients online.  Careful attention should be paid to avoiding unintended attorney-client relationships when using online social media applications. 

Above all, a virtual law practice is a professional law practice operated by a licensed attorney, and should provide high-quality legal services and abide by the best standards of professional conduct, regardless of the technology used or the form of legal services delivered online.

Good customer service is critical to obtaining future business. What are some best practices for good customer service?

An attorney operating a virtual law practice needs to remember to add the human element to the online delivery of legal services.  Technology is used to streamline much of the workflow and administrative tasks, leaving more time for the attorney to develop a relationship with her clients through communication on her secure client portal. 

The efficiency and convenience of the virtual law office with 24/7 access to case matters provide clients with a high level of customer service. The virtual attorney should employ best practices, such as having a response policy that lets the online client know when he can expect to receive a response from the attorney on the virtual law office.  After delivering legal services online, the attorney can check back in with the online client to make sure no additional services are needed, and that she does not have any questions or concerns related to her case.

What’s the best method for billing online legal services? What if that virtual practice has a bricks-and-mortar presence that already uses the billable hour? And related to that, should those prices be listed online?

Value billing or fixed-fee billing works well with online legal services; many prospective online clients specifically log on seeking legal services where they will have a fixed fee that they can budget. 

A virtual law practice can use a variety of billing methods, including the billable hour, fixed fee, recurring billing, pro bono and different combinations of these methods. 

For example, with some of my online clients I will start out a project with a fixed fee and in the online engagement agreement state that if the scope of the project exceeds “x,” then I will revert to my billable hour fee.  If a virtual office is incorporated into a traditional firm that uses the billable hour, the firm may decide to offer fixed-fee unbundled legal services online and continue to use the billable hour method with in-person existing clients. 

Some firms will list sample fixed fee prices online, but it really depends on the structure of the virtual law practice and whether the firm will be focused on fixed, unbundled services online or work on a case-by-case basis in different practice areas.  Sometimes listing sample prices online can be useful to let prospective clients know what to expect in terms of fees before they register. 

The key to any form of online billing is making sure that the online attorney-client relationship is clearly formed through an online engagement agreement, whether a click-wrap agreement or other method, and that the attorney clearly defines the scope of the legal services to be delivered online.  For the traditional firm with a virtual law office component, the firm may want to include in its written and online engagement letters a provision that specifically defines how the technology will be used with that client to communicate and how that might affect the billing for legal services.

How can virtual lawyers avoid establishing unintended attorney-client relationships?  

There are several ways to avoid establishing an unintended lawyer-client relationship. First, the firm’s virtual law office website should have a description of its technology and how it is used to deliver legal services online.  The standard disclaimers that any firm website has about not providing legal services through the general content of the site should be clearly noted on the site, and in the terms and conditions posted on there. 

Second, before a prospective client can even request a legal service or start a communication with the firm, she should be required to register on the client portal.  The registration process should contain a click-wrap agreement that lays out the nature of the virtual law office.  When the prospective client registers, she is automatically given the message that the attorney will respond to her legal request within a certain period of time. 

When the attorney decides to handle the matter, there is a process to establish the online attorney-client relationship and define the scope of services to be handled online.  A virtual law practice is different from a “contact us” form on a website, e-mail communication or other quick electronic exchange between an attorney and a prospective client.  

All of these combined steps should be in place to avoid establishing unintended attorney-client relationships. 

Any parting advice for lawyers seeking to establish a virtual practice?

Determine ahead of time the structure of your virtual law practice and the form of the legal services to be delivered online that will work best for your firm and practice areas.  Know your own comfort level with technology, and whether you have confidence in your ability to adequately research an SaaS provider and keep up to date with the technology and security issues that are necessary to comply with best practices for the daily operation of a virtual law office.

 “e-Lawyering Expert: Stay Competitive with a Virtual Law Practice” is from the Dec. 2010 issue of YourABA, a e-newsletter for ABA members.