Cost and quality: the two seem to be inextricably linked in the mind of the buyer. Whether it be for a restaurant, a piece of jewellery or in our case, legal advice, most purchasing decisions are made on the assumption that the more you pay, the better the service you will receive.
The philosophy of “you get what you pay for” is ingrained in our culture – in fact, we tend to use price as a marker of quality. We’re trained as consumers to judge goods and services by their price tag because usually, this form of evaluation leads us to the correct conclusion. In most cases, the more expensive a product or service, the more time, effort and costs went into delivering it to the consumer.
But when it comes to legal services, consumers should tread carefully, for cost isn’t always an indicator of quality in this fast-changing sector. In the City, top notch law firms charge dizzying hourly rates which their clients have come to accept is “the norm”. Rarely do they question the cost because for sensitive issues that demand legal expertise, it doesn’t seem worth the risk.
But in reality, it isn’t just the legal expertise they’re paying for, their bill covers not only the fee of the lawyer but the overheads of the firm. Naturally, most reasonable consumers would be fine with this – if the overheads were essential in delivering the high-quality service they received.
But they aren’t.
In fact, one of the main culprits contributing to the impossible rates charged by traditional City law firms is outlandish overheads. Since they operate from some of the choicest locations where rent is sky high, the consumer is passed on the cost of property. When you add furnishings, art collections, crystal glass tumblers for evert meeting room and a host of other amenities, those hourly rates can climb fast.
Of course, this isn’t to say that the lawyers working hard for said firm are not of the highest quality. It’s just that, as consumers, we feel forced to foot the bill for the art collection if we want to receive legal advice we can trust is of a certain standard.
But that’s not all.
As well as office space, your bill covers the cost of assistants: juniors, paralegals, legal secretaries. These members of staff take care of the administrative tasks: organising case files, performing legal research on current laws and cases and preparing legal briefs.
Once the costs of property and payroll for assistants has been factored into your bill, another significant portion will contribute towards the professional indemnity insurance premium the firm needs under regulatory requirements. Coupled with the mandatory practising fee payable to the Solicitors Regulation Authority, the costs of instructing a lawyer from a traditional firm begin to really rack up.
Fortunately, the winds of change are beginning to sweep through the sector. Increasingly, law firms are listening to the market demand for lower costs – the problem is, there isn’t a whole lot that traditional law firms can do to meet it.
Tethered to their lavish offices and reliant on their junior staff, their competitive edge is maintained by the cultural belief that a high cost equals high quality.
Fortunately, a favourable regulatory climate and the rise of cloud computing has given way to a new model that tackles this issue once and for all. There may still only be a few virtual law firms practising in the UK, but such firms are pioneering positive change in the industry by passing on the cost savings to clients as fee reductions.
By operating via a digital infrastructure, virtual firms such as ours are not restricted by the reach of our physical presence. Instead, our services are available to clients across the globe; our network comprises of highly qualified lawyers who work remotely and benefit from the same access to our systems. Technology further helps to enhance efficiency so more work can be completed in a shorter amount of time. In fact, according to a study by Blue Hill Research, lawyers with cloud-based practice management saved up to 8 hours of non-billable work a month.
With overhead costs slashed significantly, firms operating on a virtual model are able to recruit top legal talent. This is an opportunity we were quick to capitalise on because we realised what it would mean for legal consumers: high quality advice without the unnecessary price tag. Consequently, many of our lawyers were once partners at top city firms and each and every one of them has had at least five years post-qualification experience in their specialism.
Our lawyers aren’t paid a fixed salary – rather, they work for us as consultants and are paid for the work they do. Instead of paying a gaggle of assistants to grapple with the grunt work, we harness digital tools and cutting-edge technology to handle the administrative aspects of the job. The less overheads, the more realistic and affordable our fees become.
When a legal services provider builds a foundation on technology rather than tradition, consumers can benefit from the specialist knowledge of well-renowned lawyers without paying for the additional amenities that drive the fees up for high street firms.
Finally, virtual law firms are challenging the notion that a staggering price tag is to be expected for a high quality legal service. As the virtual model continues to gather momentum, we can expect a fundamental shift in the legal industry’s established order. If they don’t pay attention to what their virtual competitors are doing and adapt accordingly, bricks-and-mortar firms will find themselves losing their edge and unable to keep up with client demands.