Sharp rise in number of UK lawyers working in virtual law firms, research finds
Accountants Hazlewoods estimates that 1,270 lawyers are in virtual firms, up by 22% from last year
There has been a sharp rise in the number of lawyers working in ‘virtual’ law firms in the UK, new research has found.
According to the accountants Hazlewoods, 1,270 lawyers now work in so-called virtual firms, which typically only have small offices for administrative staff and deploy a shared services model.
The figure marks a 22% increase from last year’s figure of 1,040 lawyers working out of more than 20 firms.
Hazlewoods partner Andy Harris said: “The virtual law firm model has very quickly gone from being an intriguing idea to being a fast-growing and very mainstream part of the legal profession.
“The idea of having more control over working hours and locations is a very appealing one to a lot of lawyers. Combine that with keeping a greater share of the fees you earn, and the appeal is even greater.”
Leading virtual firms include trailblazer and top 100 firm Keystone Law, which floated on the London Stock Exchange in 2017 and now has almost 350 lawyers on its books.
In its last reported financial year, to 31 January 2019, the firm recorded a 35.1% increase in revenue to £42.7m with a 56.8% increase in adjusted profits before tax to £5.1m.
In its annual report it said it believed its alternative model was allowing it to attract legal talent from lawyers in struggling mid-market law firms who were facing increased billing targets and for whom the appeal of equity partnership was fading.
Lawyers at Keystone are promised from 60-75% of their fees “depending on the origination of the client” with additional income promised “to those who refer work to Keystone colleagues”.
Other leading virtual law firms include Gunnercooke, which has more than 230 lawyers, up 28% from last year, and Setfords, which has increased its headcount by 48% from 150 to 220 in the past year. The firm is backed by private equity fund BGF.