Trends in outhosted services for law firms

Written by Stephen Parry  | 27 May 2010

It struck me today that with over three years of operations under our belts at Virtual Practices™ and as a pioneer in the market the time seems right to reflect on our experiences and the trends we are seeing in outsourced business processes and Software as a Service (SaaS) for law firms.

Things have moved on since 2007. We no longer need to explain the concept of the outhosted software model and our unique legal cashiering service, as we did when we started out. There is growing market understanding and acceptance that you don’t have to run IT in-house and that Internet accessed services offer a very secure, cost-efficient way of managing client matters, the practice, security and business continuity. This is clear recognition from lawyers that their data is safer and more secure in a specialised hosted environment rather than sitting on a server in the corner of their office. I’d like to think that Virtual Practices is partly responsible for that acceptance.

New start-ups and smaller firms
Initially, Virtual Practices attracted new start-ups and smaller firms wishing to avoid a capital outlay on IT and the upfront costs of employing a legal cashier. Our philosophy and distinctive market attribute was not to just offer software as a service but software as a service with service. By that I mean the personalised support and hand-holding to get clients up and running, the advice on legal accounting requirements, the setting up of your database and a legal book-keeping service, that checks every ledger posting, to ensure everything meets SAR (solicitors accounting rules) standards. Through hundreds of user implementations, Virtual Practices has honed these procedures, ironed out the early days’ glitches and developed a fast route for on-boarding new clients and achieving success. On average it takes 4 weeks for us to set up a new firm.

We also further developed the service extending it to the front office to support lawyers in the management of documents, cases, matters, e-mail, time recording, and marketing as well as billing, legal accounts and business reporting.

The ‘virtual’ law firm takes hold
However while practice management and the outsourced legal book-keeping remains a key focus, we are now seeing a new trend in the market where case management and operational support for lawyers has become of equal importance.. There are an increasing number of senior, high achieving lawyers spinning off from some of the largest firms. They are founding heavily IT-reliant styles of practices or virtual practices. Temple Bright for example, is shunning the traditional bricks and mortar practice. Formed by three lawyers including two from large international firms Simmons & Simmons and Herbert Smith, Temple Bright is geared up to offer ‘City’ quality advice for growing businesses while using Virtual Practices to reduce the cost of IT without sacrificing quality. They believe that the impact of the Legal Services Act will make it hard for the traditional bricks and mortar model to be sustained.

Boutique firms enter the stage
However, not all of these large firm spin-outs choose the virtual route to premises and perhaps one of the most interesting trends of late is that of the boutique firm aiming high. CANDEY LLP which spun off from Tarlo Lyons last year (now re-branded as Blake Lapthorn) began operations from Lincoln’s Inn with the goal to be an enterprising, straight talking law firm for entrepreneurs. Coming from a City firm where enterprise level software with extensive functionality was the norm, finding that all these features were available to them from Virtual Practices via our SOS Connect software proved very appealing.

With three years’ head start in the market, we have refined Virtual Practices services to meet the desires and expectations of our clients, constantly improving our processes along the way as we strive for excellence. Others entering the market will find that there is no shortcut to the learning curve. Meanwhile we intend to build upon our success and listen carefully to the needs of ever-evolving law firms.