Legal update: Number of lawyers at 'virtual' law firms jumps 38% as pandemic launches a new era of hybrid working

Published: Wednesday 8 December 2021

  • A move away from traditional office working leads to a reduction in overheads
  • Lawyers' focus shifts towards a better work-life balance

There has been a 38% rise in the number of lawyers at 'virtual' law firms in the past year, from 1,355 in 2020 to 1,875 in 2021, as the pandemic leads to a dramatic shift towards hybrid and flexible working arrangements.

A 'virtual' law firm is a decentralised legal practice where lawyers work remotely and use shared services provided by a central hub. Most variants of virtual law firms have their lawyers as self-employed. 'Virtual' firms have central services responsible for functions such as compliance, accounting and administration.

Our research shows there are now 1,875 lawyers working for 'virtual' law firms in 2021*, up from 1,355 the year before. This increase is even more significant when compared to pre-pandemic levels – jumping 50% from 1,272 in 2019.

COVID-19 has led to a shift in attitudes towards working arrangements as hybrid working takes hold nationwide. Lawyers have particularly felt the benefit of having an improved work-life balance. Virtual law firms tend to offer lawyers more freedom over the work they take on, whilst being able to carry out their work remotely.

There has been greater acceptance of virtual meetings among clients, as a way of communicating with their lawyers, a development beneficial to virtual law firms. This offers a lot more flexibility, allowing clients to manage their legal affairs from anywhere in the world, whilst maintaining high levels of service.  

Virtual law firms do not require traditional office space and as a result, benefit from lower overheads. This model of working means that profit margins can often be higher as fewer back office staff and facilities are required. This enables a higher share of revenues to be returned to the lawyers.

As the virtual market continues to grow in the post-pandemic era, many law firms may now start considering whether to continue investing as heavily in their office space. 

This fast-growing seb-sector shows no signs of slowing down. Some of the biggest increases in number of lawyers over the last year include:

  • Nexa Law, the Shropshire based virtual firm, which had a 95% increase to 105 lawyers in 2021, up from 54 in 2020
  • Keystone, a top 100 firm has seen its number of lawyers grow by 30% to 456 lawyers in 2021, up from 350 in 2020
  • Setfords, a top 200 firm has seen its number of lawyers increase 40% to 350 in 2021, with revenue growing 30% to £18 million last year**

Jon Cartwright, Partner, says: "The virtual law firm model has been given an unexpected boost by COVID-19, even with more traditional firms returning to their offices. It is clear that what was once considered an outlier in the legal industry is quickly becoming part of the mainstream."

“Many clients have accepted that liaising virtually works just as well as in-person meetings. Some may say the benefits are even greater as it offers both lawyers and their clients much needed flexibility while reducing the need for travel and office space."

“Some argue that the legal profession is known for being a fast-paced and long hours culture. This virtual model can mean that lawyers have more control over their hours, allowing them to work more flexibly in a way that works around their lifestyles and families. Some also argue they also benefit from a greater share of the revenue they create due to lower overheads."

Number of lawyers at virtual firms rises 38%

*year-end 30 September 2021

**Companies House, year-end 30 September 2020

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Jon Cartwright
Jon Cartwright
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Patricia Kinahan
Patricia Kinahan
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Andy Harris
Andy Harris
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