Why Do Solo Attorneys and Small Law Firms Use a Virtual Office?

By Stephen Furnari - February 12, 2014
Why Do Solo Attorneys and Small Law Firms Use a Virtual Office?

Three reasons why solo attorneys and small law firms use a virtual office rental.

What is a virtual office?

A virtual office rental is a financial arrangement where solo attorneys and small law firms pay a low monthly fee (typically starting at under $100 a month) to rent the use of a premium commercial address in an executive office suite and the non-exclusive use of office space and amenities, such as conference room facilities, a staffed reception area and access to professional grade internet, telephone, and office equipment.

What types of attorneys typically use a virtual office rental?

When it comes to attorneys, those using virtual office rentals fall into three groups:

  1. Solo attorneys who recently started their own law practice,
  2. Solo attorneys who primarily work from a home office, and
  3. Solo attorneys and small law firms whose primary office location is located in another city or another state.

Why do solo attorneys and small law firms use a virtual office rental?

Different types of attorneys use a virtual office rental arrangement in different ways; however, the three main reasons attorneys elect to use a virtual office rental are:

  1. There’s a substantial cost savings as compared to traditional office rental;
  2. They get access to a community of other lawyers who can help with practice issues or send referral; and
  3. It gives the firm a professional image.

Why do newly solo attorneys choose a virtual office rental?

Why Do Solo Attorneys and Small Law Firms Use a Virtual Office?For the newly solo lawyers, cost is the primary consideration for choosing virtual law office rental. Most times, newly solo attorneys would prefer to be in a physical office space, but their budget may prohibit taking on the extra expense. For a minimal monthly cost, a virtual office rental bridges the gap between starting a practice and being able to afford a physical office.

A virtual office rental provides new solo attorneys with a premium commercial address for their firm, which gives the practice more credibility. Plus, if the virtual office provider is also an operator of an executive suite, the attorneys will typically get access to a professional workspace to meet with clients when they require it. When an attorney is ready, they can then transition into a physical office space, usually in the same address as their virtual office rental, without the disruption that comes with changing the address of your law practice (their address would stay the same).

Having the appearance that a law office is located in a premium commercial location enables a lawyer to command higher rates than if they used an office address that was clearly their home. In the latter case, clients may expect that the attorney charge less since the attorney isn’t paying for office space; whereas, with a virtual office rental, since it appears the attorney’s office is located in a commercial building, the attorney would have the choice to discount their rates (and the ability to do so since they are not paying rent for physical office space) without the client demanding it simply because of where the lawyer works from.

In some cases, particularly in a lawyer-only office suite that offers virtual office rentals, newly solo attorneys will often find a community of like-minded, self employed attorneys who can help them tackle practice issues, provide advice on areas of law they may be unfamiliar with and be a resource to exchange referrals. It’s similar to what the attorney would find in a bar association, but where attorneys are less transient because they share a commercial address, which is difficult to change and thus, result in a greater “buy in” to the community.

Why do home-based attorneys choose a virtual office rental?

Why Do Solo Attorneys and Small Law Firms Use a Virtual Office?Unlikely the newly solo attorneys who want a physical office rental but can’t afford it right away, some solo attorneys have made a commitment to working from a home office on a permanent basis. Often this decision is made for lifestyle reasons. For example, if the attorney has children and wants to be close to home to assist with childcare, or simply, if the attorney wants a commute that’s as simple as rolling out of bed to their dining room table.

Home-based attorneys rent virtual office space largely for the same reasons as the newly solo attorney: It’s an inexpensive way to get a premium commercial address; and they get a consistent, professional place to meet with clients, host depositions, or closings.

Law is a profession that tends to be best practiced collaboratively. Being able to talk through practice issues with another attorney is critical for the successful practice of law: You tend to get better results for clients and reduce malpractice risk.

For the attorney who has made a long-term commitment to working from home, isolation can be a real issue.

A well-chosen virtual office program can be the connection to other attorneys that the home-based lawyer needs to be successful. Home based attorneys should look for a virtual office program that is lawyers only, or has a high concentration of attorneys, and where the management actively provides opportunities for virtual office attorney to connect with each other. When considering a virtual office provide, look for an operator that sponsors regular networking events, access to referral sharing programs, or practice development coordination.

Why do out-of-town law firms choose a virtual office rental?

Why Do Solo Attorneys and Small Law Firms Use a Virtual Office?Out-of-town law firms choose a virtual office rental as a way to expand their firm’s regional footprint at a very low cost. New York City is the legal and financial epicenter of the United States. Out-of-town and out-of-state law firms gain access to a new pool of potential clients at a cost that is significantly less than establishing a physical office presence.

Additionally, for the law firm that already has some New York City clients, but does not have a NYC office address, another attorneys may be reluctant to refer cases because the firm does not have a “local enough” presence. This is often the case for firms on Long Island, in New Jersey, or even in boroughs other than Manhattan.

This scenario came up recently at Law Firm Suites. An attorney needed to refer a client to a sales tax attorney. Another lawyer in the LFS community had recommended a firm that was based in Philly. The Philly firm was perfectly capable of handling the matter and does so for other NYC clients, the referring attorney would not recommend the Philly firm to his client because they did not have a Manhattan office address. Had the firm maintained a cheap virtual office address and 212 phone number, this lucrative case would have been theirs.

From time-to-time, out-of-town firms may also need first-hand advice from a local attorney about the nuances of local practice. Inside information about a judge or adversary can be invaluable. A virtual office rental, particularly one with a heavy concentration of attorneys, gets the out-of-town law firm access to local knowledge.

Finally, a Manhattan office presence may enable the out-of-town firm to charge higher rates, even in the local area. In a recent study, the National Consumer Law Center discovered that New York small firms lawyers with 3 to 5 years of experience, on average, charge $59.00 an hour more than their New Jersey counterparts.

By merely renting a virtual office and including a New York City office address on a law firm’s website, business card, and firm letter head, out-of-town lawyers can often command higher billable rates than their local counterparts.

About Stephen Furnari

Stephen Furnari is a self-employed corporate attorney and the founder of Law Firm Suites, the operator of coworking spaces for law firms. Through Law Firm Suites, Furnari has helped hundreds of attorneys launch and grow successful law practices. He is the author of several eBooks, including “7 Deadly Mistakes that Prevent Law Practice Success” and “An Insider’s Guide to Renting the Perfect Law Office”. Stephen has been featured in the ABA Journal, Entrepreneur, New York Daily News and Crain’s New York. Connect with Stephen on Twitter (@stephenfurnari).

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