Online Office-Makers

Technology

Helping others create virtual practices

October 2009 Issue
By Barbara Rose

Stephanie Kimbro
Photo courtesy Stephanie Kimbro

New Hampshire lawyer John Deachman was enjoying an egg hunt with his family on Easter morning when his BlackBerry pinged to tell him he had a new client.

The client had registered at his online legal services site, New Hampshire Virtual Law Firm, to purchase an LLC agreement. The document was assembled automatically from the client’s responses to an online questionnaire. Back in his office on Monday, Deachman reviewed it, corrected minor errors and notified the client it was ready.

“That was the best $150 I made,” he recalls. “I can’t tell you how exciting it is when a message comes in on your BlackBerry telling you you’ve just made money.”

As law practice changes, virtual law practice is among the “next new things” being discussed. The field is still wide open: According to the 2009 ABA Legal Technology Survey Report, just 6 percent of respondents said they had a virtual law office. The report says solo practitioners were most likely to report having a virtual office, at 12 percent of respondents. Next are firms of 2-9 attorneys, at 7 percent.

With the rise of the virtual office has come the growth of online businesses that can set up and aid in the operation of those offices.

Deachman, 38—a partner in Manchester, N.H.-based firm Craig, Deachman Cowie—launched his virtual practice early this year with the help of a fast-growing company called DirectLaw Inc., which provides Web-based technology to help small firms and solos offer limited legal services over the Internet.

“We are attracting early adopters,” says DirectLaw founder, president and chief executive officer Richard Granat, who also operates a virtual law firm serving Maryland residents from his home in Palm Beach Gardens, Fla.

“The concept fits firms that want to position themselves to capture a generation coming up that will only want to deal with lawyers over the Internet,” Granat says. “For the general practice law firm in areas like family law, these concepts will begin to mainstream.”

CUTS COSTS

Companies such as DirectLaw and Virtual Law Office Technology—also known as VLOTech—are at the forefront of a legal services delivery revolution, streamlining and in some cases automating tasks to drive down costs dramatically. Both companies charge monthly fees for delivering a hosted software service that plugs directly into the lawyers’ websites.

Clients log on to secure personal webpages where they can communicate and collaborate with their lawyers, access forms and documents, and receive other services. Lawyers review and amend the documents, if necessary, before returning them to the clients’ webpages with advice on how to execute them.

“People clearly need more affordable services, and they need them to be more convenient,” says VLOTech founder Stephanie Kimbro, who operates her virtual law practice, Kimbro Legal Services, from her Wilmington, N.C., home. “They work with me all different hours of the day. I can see when they’re communicating really early or really late at night. That saves them money and hassle.”

Kimbro launched VLOTech last year with her husband, a computer programmer, after other attorneys began asking about her virtual practice. Her first client went live in August 2008, and by May VLOTech had about 20 clients. VLOTech was bought by Total Attorneys in early October.

VLOTech’s monthly cost for a solo is $260; the per-attorney cost declines as the number of users increases.

Rockville, Md., family lawyer Dawn Elaine Bowie signed up for the service last year with plans to help the growing number of pro se litigants. In the meantime, she decided her full-service practice would benefit from VLOTech features like conflict-of-interest and jurisdiction checks. Since March she’s required all her clients to register with her virtual office.

“It has been fantastic,” she says. “I was spending ridiculous amounts of time fielding calls and answering questions when what people really wanted was free legal advice. Now my website generates a notice if someone calls. I send them an e-mail telling them how to register ... and a form letter explaining the payment process.”

Granat spun off his DirectLaw service last fall from a flourishing automated-legal-forms business he started in 2000 in a U.S. joint venture with Epoq Group Ltd., a London-based company that developed a system called Rapidocs. Now the heart of DirectLaw, Rapidocs provides more than 250 state-specific legal forms that can be bundled with legal advice for a fixed fee. Monthly charges for DirectLaw’s service range from $69 to $249, plus document usage fees for some packages.

“I had begun to witness nonlawyer companies like LegalZoom taking market share away” from lawyers, says Granat, who co-chairs the ABA Law Practice Management Section’s eLawyering Task Force. “I thought it was important to make our technology available at a reasonable cost” to small firms so they could meet the growing demand for more affordable services.

Granat expects to host about 2,000 virtual law firms within two to three years.

Deachman expects to break even after his first year. Business picked up after his television and print advertising campaign in March.

“You can see the promise,” he says. “I would be pleased if this became 20 percent or 30 percent of our firm’s business. We would like to expand to other states where the population is larger, now that we have the model.”