The Virtual Law Office
The virtual law office, or VLO, is here. Although not yet large in numbers, virtual law offices are opening up across the country. These are law offices that may be entirely in cyberspace, or they may be in conjunction with a traditional brick and mortar law office.
Currently, most VLOs appear to be young lawyers who have decided to open up their own practices, but work at home. Some of the demand for VLOs is also being driven by the number of new lawyers who are unable to find a job with a law firm due to the economy. However, my belief is that many more firms and other lawyers will also be opening up VLOs in the future, at least for certain basic type services.
The idea is that many more people are Internet users who shop on-line and are amenable to legal services on the Internet. VLOs will provide these people with a viable and economical option, but with somewhat less service and personal contact. There may or may not be any face to face meetings, or there may be fewer such meetings.
With VLOs, there can also be what are called e-signings, whereby the documents are either emailed to the client, or the client downloads them from a website after they are prepared and then prints and signs them. There will be signing instructions provided, and the time and responsibility for properly signing the documents will be shifted to the client. If this risk and responsibility can truly be shifted to the client, then there will also be substantially reduced costs.
In our office, we estimate that about 20%-33.3% of the cost of estate planning is incurred by the time the first conference ends and the drafting begins. About 33.3%-55% of the cost is incurred after the first conference and by the time the documents are drafted and mailed, or transmitted to the client, and another 25%-33.3% is incurred for the last office conference to sign the documents and complete the follow up work in providing the original documents and photocopies of the documents to the clients and closing the file. Naturally, there can be significant additional time, if more than two conferences are needed, or if there are substantial changes and redrafting.
Our analysis discloses that clients can probably save at least 20%-33.3% and possibly significantly more, with a virtual law office approach. The question is whether or not this shifting of responsibility and risk will be worth the cost savings to the client.
Without a face to face meeting, only very simple estate planning may be a viable candidate for a virtual law office handling estate planning matters. This is because most complex planning requires an understanding by the client of the basic concepts and, in some cases, quite complex concepts. This is normally accomplished by the client meeting with the attorney who explains the basics of the plan, which is incorporated into the documents.
Even after the explanation, in our practice, we give a written summary and can certainly provide much more written information to the client, if needed. However, this information merely reinforces what was previously discussed during the planning conference.
You can not necessarily rely solely on written information to clients where complex matters are involved. Self-study is for very few people when it comes to complex matters. Most need the explanation that is provided in face to face meetings between clients and their attorneys. Some clients will also take advice willingly and others will not, and require much more explanation. This latter group is probably not a good candidate for the VLO.
It may be a viable alternative with clients for whom we have done estate planning work in the past. Since they know us, and we know them, the trust, confidence, and familiarity are already in place. In such a case, we could likely do many routine updates saving the cost of the first conference. We would only need the necessary financial and other information that our clients already supply to us, and maybe a phone call to confirm any changes or lack of changes in family and financial circumstances.
A significant amount can also be saved if the draft documents can be emailed rather than mailed. We have tried this, but most clients prefer paper copies, which cost much more to produce and mail than digital copies. Savings can easily be in the hundreds of dollars when a significant number of documents are involved.
Even more can be saved with the addition of an e-signing; possibly up to 50% of the total cost, when combined with the other cost savings techniques, but with even greater risk. Currently, a significant number of documents that we mail or email out to be signed outside of our office are not signed properly, even when written signing instructions are provided. If the documents have to be signed and then re-signed, the cost will increase, especially if multiple parties in different locations are involved.
There also has to be some process whereby the client can talk to the attorney about how to sign documents, if the client has questions. Furthermore, there needs to be some follow up review of the signed documents, all of which adds time and reduces some of the cost savings associated with VLO services. Further complicating this process, is normal client (human) procrastination, which also adds to the cost and to the uncertainly as to when the work can be completed and the file closed, which can also add time and cost.
There are a number of ethical and legal implications involved with VLOs, including but not limited to, the confidentiality of information, maybe not knowing the lawyer, competence of the lawyer doing the work, quality of the work product (especially if in conjunction with a third party non-attorney Internet document provider), practicing law in a jurisdiction to which the attorney is not licensed to practice, either intentionally or by accident, and the lawyer thinking that the legal work is being done for the client, when in fact the lawyer is actually dealing with a third party pretending to be the client over the Internet and not acting in the client’s best interest (i.e. fraud).
There is also a concern that some of the VLOs of the future may not really be attorneys. We have certainly all seen this problem with the Ethiopian and other emails promising riches, if we will only cooperate in sending money or information, only to find identity theft or fraud at the end of the rainbow. Unfortunately, there are also a number of people who have unreasonable expectations about how much the cost can be reduced, and will fall prey to such schemes.
The America Bar Association has been studying the ethical implications and legal problems associated with virtual law offices. The initial response has been mostly positive. Many state bar associations are also looking into the issues.
My belief is that many of the problems can be mitigated when used in conjunction with legitimate law firms with long-standing reputations who also have traditional brick and mortar offices. I also believe that this may be an effective way to provide legal services to many people who otherwise cannot afford the work or who will not pay for it at its current cost and are willing to assume some additional risk.
In the final analysis, the major problems with the virtual law office are similar to using Will drafting software. They are both based upon saving money by shifting work, responsibility, and risk, away from the law firm, to the client. However, with the VLO, substantially less risk is shifted to the client than with Will drafting software.
Even with questionnaires and checklists, many people are not likely to understand whether or not the planning documents that they choose from a non-attorney software provider and their terms are correct for their situation without some direct contact with an attorney who has the opportunity to ask questions to determine if the planning is appropriate. Keep in mind that most problems with estate planning documents are discovered after the signer of the document is dead or disabled and can no longer correct the planning or drafting mistakes. A similar problem comes with e-signing a document without the assistance and supervision of an attorney.
There is little doubt that e-signings can save a substantial amount of the cost of estate planning documents. However, any legal documents signed without the personal supervision of an attorney and law office staff members, many of whom are more or less professional witnesses, have a substantially greater risk of improper execution and the documents not being valid when they are needed the most. This is especially so if there is no post execution review by an attorney of the original documents, themselves, and even this will not uncover other defects that can be avoided if executed inside the law office, such as problems with the qualifications of the witnesses themselves.
A major issue will come down to what extent is the client allowed and willing to assume the risks in order to save the costs of meetings and supervision by an attorney. Unfortunately, as humans, we want it both ways, meaning we want no risk and no personal responsibility or liability, but we want the reduced costs.
Paraphrasing the old French expression, “You can not eat your cake and also keep your cake.” You either eat it or you keep it. You either reduce your risk and increase costs, or you increase your risks and you reduce your costs.
You can not reasonably do both; although, many Internet document preparation websites may lead you to believe that you can.
Notwithstanding the potential problems and issues, the VLO has merit and we will be looking into this matter and will likely begin a program of studying and possibly implementing a virtual law office in conjunction with our traditional brick and mortar office. We would very much appreciate your feedback on this matter.