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Episode 76: Going Virtual: Establishing a Law Practice Without Walls with Marcia Watson Wasserman, President of Comprehensive Management Solutions, Inc.

Guest: Marcia Watson Wasserman, President of Comprehensive Management Solutions, Inc.

Episode 76: Going Virtual: Establishing a Law Practice Without Walls 

Sharon:   Welcome to the Law Firm Marketing Catalyst podcast. Today, my guest is Marcia Watson Wasserman, founder and president of Comprehensive Management Solutions, providing C.O.O. to Go services to boutique and mid-size law firms. Marcia is a seasoned legal professional and author with more than 25 years of experience in the legal industry, including working with lawyers to develop and sustain virtual law firms. Today, she’ll give us the benefit of her experience in this burgeoning area. Marcia, welcome to the program.

Marcia:    Thank you, Sharon. I really appreciate the opportunity to join the podcast.

Sharon:   So glad to have you. Tell us about your career path. How did you come to work with law firms?

Marcia:    I’d say it was serendipity. When I was an undergrad at UCLA, I found a part-time job as a legal secretary working for an attorney in Beverly Hills. I was interested in working with lawyers, enjoyed working with lawyers and I became a paralegal. Then I was an office manager. I continued my education and went to the Anderson Graduate School of Management at UCLA, and then I became an executive director of multi-state law firms and eventually the chief operating officer of an Am Law 200 firm.

Sharon:   I didn’t know that you went to Anderson.

Marcia:    Yes, I did.

Sharon:   I’m impressed with the extent of your career. That’s something I didn’t know about you, but that’s impressive in and of itself. Tell us about your business today. What do you do for firms? When do they call you in?

Marcia:    I’m pretty much a fractionalized COO, given my background. I work with small and mid-size law firms who don’t have someone with my expertise. I’m frequently called in to do operational reviews, to take a look at their people, their systems, their finances. I do a lot of one-on-one coaching of managing partners and administrators on profitability, management, developing people, team building, strategic planning, succession planning and compensation packages. In addition, I lead three manager roundtables in and around Los Angeles that meet monthly. There are over 40 law firms that I meet with each month on management and leadership best practices.

Sharon:   Virtual law firms are right up your alley, then. Why do lawyers want to set up virtual law firms? Is it because of cost? Is it most often millennials who want to do this?

Marcia:    I would say one of the main reasons is work/life balance or work/life blend, as it’s sometimes called. Particularly in larger cities like L.A., where you and I both live, traffic is deplorable, so people are looking to reduce or eliminate their commute time. That’s part of it. They want to spend more time with their family and not spend hours driving. The other part is, yes, money and trying to figure out ways of saving money. One of the biggest expenses for a law firm is their office rent, which can be as much as 8 to 10 percent of their gross revenue.

Sharon:   It’s a big chunk.

Marcia:    Even big law firms that are brick and mortar are reducing the size of their footprints. They are setting up hoteling and remote locations to try to reduce that rent and to ease the commute times of their lawyers and staff. Law firms need less space because of this and also because of technology. Gone are the days of file rooms and libraries, so they don’t need as much space. Millennials like the idea of working virtually and using technology, but they’re not the only ones.

Sharon:   Are they the ones who broach it first, or do you ever find that it’s more established?

Marcia:    It can be both. Let me give you an example of a couple of big law firms that are totally virtual. Because they are exclusively partners, you’re going to get people that are a little bit older than millennials. There’s a firm in Dallas called Culhane Meadows. It has about 70 partners in it and most of them have 15 to 20 years of legal experience. They have no associates. They have nine locations and they call themselves a cloud-based law firm. They have a back office admin team that handles support functions, and they all work remotely from home and put together teams of lawyers who’ve worked together in other large law firms before starting their virtual firm. So it isn’t just the millennials that are doing it.

Sharon:   Do you work all over the country, then? I don’t know if this was a firm you worked with, but do you work all over the country?

Marcia:    Occasionally, I do. It depends on the circumstances. I’m primarily working in the greater L.A. area.

Sharon:   With a virtual firm, there can be a lot of challenges in terms of cohesion. What do you advise? What are the top three pieces of advice you give law firms when they talk with you about setting up a virtual firm?

Marcia:    To begin with, you need to make sure you know and trust the people you’re starting your firm with, that they share the same goals, work ethic and culture as you. You won’t be seeing them every single day walking down the hall, so you have to have that trust. What I see and hear is that people who’ve worked together at a pre-existing firm tend to work best because they know one another, they trust one another, they like one another. Here’s an example. In Pasadena, there is a seven-lawyer firm, Hackler Flynn & Associates. I know the managing partner, Cindy Flynn, and she told me that all the lawyers at her firm had worked together at a pre-existing firm that closed, so they formed this new virtual firm. A few of the attorneys are out of state, and it works well because they know one another.

You also need to leverage technology in a virtual practice. You need the best cloud-based technology tools that fit your firm and your clients, and you need to learn the software. Lawyers are bad about getting trained. They’ll purchase things and then barely use them. To make virtual truly work, you need to be an expert with all the software you have. You need systems and procedures that streamline your practice and benefit your clients, document management software like Worldox and MedDocs, good video conferencing software, client portals for paying bills, collaboration tools, and, of course, you need encryption and data security if everything you’re doing is in the cloud.

Communication is the third thing that is so critical—when and how to have meetings, delegation, feedback, how you manage work among your teams. Video conferencing is really important in a virtual world. I’ve talked to lawyers who tell me how much it helps people communicate with one another. If all you’re doing is emailing and texting, it isn’t the same as when you look somebody in the eye. Since you can’t walk down the hall and see them, doing video conferences for meetings is really important. You need to back that up with occasional in-person events, retreats, social gatherings, things that are fun, at least annually, to keep people together. Creating teams in a virtual world is not that much different for people who worked in a big law firm with multiple offices, and your practice group may not always be in your home office. You need to collaborate with other people and there are tools out there. You just have to remember to stay in close communication with the people you work with to maintain the relationship and the culture of the firm.

There is one caveat that I want to throw out, which is that when it comes to support staff, virtual work is not for everyone. You need to make sure you have support staff that is motivated enough and not distracted by working from home. I co-wrote a book a few years ago, “Lawyers as Managers,” and there’s a checklist in that book that’s a self-assessment on telework, working remotely. It’s a good checklist for somebody to go through to be self-aware of whether they have the personality and the skill set. Some people get really lonely working at home.

Finally, as far as support staff goes, it’s important, depending on where you’re located, to consider employment law and what the wage and hour laws in your location are. Most of the support staff that would be working for you would be non-exempt, and you have to think of supervision issues, insurance issues. There’s a whole myriad of things to contemplate if you’re going to have staff working remotely.

Sharon:   Are you called in by firms saying, “Hey, we’re thinking about doing this. What do we need to know, or how can you help us?”

Marcia:    Sometimes, yes. A lot of times it’s a startup. People will leave bigger firms and decide for various reasons to go off on their own, and today they’re doing it more and more virtually. They’ll want a checklist of things they should be contemplating. They want guidance on what kind of software is out there and what should they be getting.

Sharon:   Of course, technology is important, no matter what you’re doing today, but do you find that lawyers are more resistant? Even though you say, “Listen, if you’re going to go virtual, you really need to have all this,” are they still resistant? Do they say, “Well, we’ll see. We’ll wait until down the line.” What do you find there?

Marcia:    It depends on how sophisticated the firm was that they came from. It depends on their age and it depends on their reason. If it’s a sole practitioner who’s decided to go virtual instead of renting space somewhere, that person’s probably not going to be as tech savvy, again, depending on age. If it’s a young millennial, they’re so used to using technology that they’re fine going out and getting an all-in-one cloud-based system like Clio that will let them connect all kinds of different software packages and they’re ready to go.

Sharon:   Have you seen brick and mortar firms that have successfully segued? They’ve said, “We’re going to go virtual. This is ridiculous; we don’t need all this space,” or “People are driving too far.” Have you seen them segue to virtual?

Marcia:    I’ve seen them start to take small steps in that direction. At my roundtables we talk about it, and we talk about when people’s leases are up that they’re going to take less space. What I see firms doing is opening small satellite offices of co-working spaces or hoteling to reduce commute time. For instance, people who live in the San Fernando Valley, whose main office is on the west side of Los Angeles, which can be a pretty nasty commute. So they’re opening co-working spaces in The Valley that even senior partner levels can work from a few days a week, so they don’t have to drive down to their main office. They’re looking at sharing offices in the main office because they’re not there every day. That’s a huge shift culturally, for partner-level people to have to share an office. The younger ones are fine doing it.

Sharon:   It’s interesting. When I first started out, we came from an era where, culturally, if somebody was moving from a barrister suite to move home, you would say, “Are they in a lot of trouble? Is business bad?” It’s so interesting that today it’s like, “Well, it’s the smart thing to do.” I think whether you get lonely, whether you’re someone who does not get lonely working from home, having spent a little time working from home, you have to really work to get out of your isolation, no matter what.

Marcia:    Yeah, and you may do the majority of your work remotely from home, but you’re probably out networking and joining organizations where you go to meetings and visiting your clients, which they would appreciate. Get to know your clients better by getting out there and learning about them at a deeper level. You don’t have to stay home staring at your computer all day.

Sharon:   That’s a very good point. It leads me to my next question. Does a virtual firm pose more of a challenge when it comes to business development? Is it harder to market?

Marcia:    The firms that have succeeded would say the exact opposite is true, since today, most legal services are provided by telephone and email. Clients very often never meet their lawyers, particularly in transactional practices, so being virtual is immaterial to many clients. Since virtual firms have lower overhead, they can offer more flexible pricing, flexibility in how and what services are provided, and they’re more convenient and more responsive than traditional services. If anything, it’s a marketing tool. It’s a plus rather than a negative. Clients don’t care about coming to see gorgeous offices. They’d rather get the work done efficiently and at what they consider a reasonable price.

Sharon:   That’s very true. I was thinking about a couple of things. High-end law firms—maybe not high-end, but ones that charge a lot, have to have fabulous offices, and of course who’s paying for it? The client’s paying for it, right?

Marcia:    Absolutely and that’s changing.

Sharon:   It makes a lot of sense. I would say it’s critical to have like a guide like you because there are a lot of things you don’t think about.

Marcia:    Right, having a checklist and being organized is that much more important if you’re working virtually.

Sharon:   Do you find that you work more with the executive director of a firm or the administration? When they’re talking about, “We want to set up a satellite office,” who are you working with within a firm?

Marcia:    Typically, I work with the managing partner to talk about strategy and checklists and what they need to implement. I might also work with their executive director, administrator or office manager if they’ve never done anything like this before, to mentor and coach them through it.

Sharon:   I’m sure they appreciate having somebody to turn to. I’d want to have you there and have a coach. Marcia, thank you so much for being here and telling us about what I think is an interesting and refreshing area, especially in Los Angeles with traffic being so deplorable—it’s a great word. Thank you so much for being here today.

To everybody listening, that wraps up another episode of the Law Firm Marketing Catalyst. If you would like to contact Marcia, we’ll have her information in the show notes. If you like what you heard and would like to hear more, you can subscribe to our podcast on iTunes or wherever you download your podcasts, and please rate us. We’ll be back next time with another thought-provoking guest who can be a catalyst for moving your firm forward. Thank you so much for listening.

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