Virtual Reality: Is the future already here?

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The legal industry is in a transitional phase. We all have access to email and electronic documents, but we remain voracious consumers of paper. The courts continue to experiment with electronic litigation, but Phillip Street is still clogged by trolleys of court documents. And there’s this thing called the virtual law firm which is meant to be revolutionising legal practice – although many argue that the revolution isn’t quite here yet.

But “virtual” may also be a matter of perspective. And, if you take a closer look, your practice may be more virtual than you think.

Different definitions of the future

What exactly is a virtual law firm? This term has been used by a number of different types of organisations to describe themselves, so it’s worth taking a closer look at the various models. As will become clear, the one common element to all of these models is the move away from the physical office space as the centralised hub of lawyering.

The first type of firm which is sometimes described as a “virtual firm” is the secondment only firm; a firm with a network of lawyers who can be “embedded” with the client’s business for short or long term assignments. It is easy to see why this model is often described as “virtual” – the firm exists as a network of individuals for hire, but there is no physical central hub for these lawyers to ply their trade.

The second type of “virtual firm” builds on the idea of a firm as a network of experts linked by a common idea and a common platform. This common platform is usually some kind of website through which practitioners either refer work to each other or can receive work in response to queries from the general public. A recent example of this type of service is the LawPath site, where queries from prospective parties are filtered and allocated to lawyers who are members of the service. Clearly this model has its similarities to a secondment firm, but allows individual practitioners more autonomy.

Bad connotations

But there is also a school of thought that the only real type of virtual firm is one where all legal business takes place online. The American Bar Association, for example, has issued a paper which states that a “virtual law firm is characterized by access by the firm’s clients to a password protected and secure web space where both the attorney and client may interact and legal services are consumed by the client.”

It is for this reason that the label “virtual law firm” can be somewhat controversial as it is often associated with low end, commoditised work. It’s not a label that is always welcomed by decentralised, alternative model firms. Jeremy Szwider, Bespoke Law founding director, says that the term has been applied to his firm, but it takes further understanding to do justice to Bespoke Law’s business model. “Yes, we have been referred to as a virtual law firm,” he says. “That [phrase] lends itself to a true e-commerce model, a platform where legal services are provided by online means. We try to pluck the best out of the various worlds - online and bricks and mortar.”

Szwider wonders whether the phrase “virtual law firm” may even be misleading. “For me a law firm is more than commoditisation of legal services and off the shelf products - legal services will still always need that face-to-face contact,” he says.

Automated documents

The “virtual law firm” is associated with another recent development: automated document creation.

“There is a tremendous drive towards document automation,” says New York-based consultant Ari Kaplan. “Tools like Contract Express help to draft contracts, particularly for transactions like licensing, sales, and non-disclosure agreements used on a repeat basis. This really streamlines a process that was once [piecemeal] – you’d take clauses from here, clauses from there.” The process has become increasingly sophisticated.

“This trend started with templates – that was the first iteration of this document creation wave,” says Kaplan. “Now what we’re seeing is much more advanced technology that is establishing rules that incorporate organisational policies and recognise jurisdictional nuances, among other details. So if you’re going from one area to another and the law happens to be different the technology will understand that there may be some distinction.”

Cultural acceptance

So it is now possible to seek legal advice over the internet from someone you have never met and to even use a document drafted without human intervention. But is that really what clients want?

Szwider recognises the efficiencies of online service delivery, but he’s firmly of the view that this is not the only future path for the legal industry. “Legal services without the face-to-face aspect to me is dangerous….it’s like getting a diagnosis from a doctor without seeing them in the real world – it’s worrying,” he says. Importantly, however, he sees the definition of “face to face” interaction as expanding beyond its traditional meaning and encompassing technologies such as videoconferencing.

That’s because Szwider believes it’s the human interaction – on an approachable basis – that still counts for most. It raises the interesting question of whether the new technologies are simply a continuation of established communication methods such as phone and fax. “[Virtual practice] is not new – it’s not as if every interaction had always been in person,” observes Kaplan.

Perhaps, then, we’re all virtual lawyers, in our own way.

Online legal transactions

A spot of legal advice on the phone or on the email may be the new norm – but what about conducting the actual transaction online?

The Commonwealth Electronic Transactions Act 1999, s 8, provides that a transaction is not invalid “because it took place wholly or partly by means of one or more electronic communications.” This means that, at least in theory, agreements can be negotiated and drafted by parties via email and even signed using an electronic signature service.

“There is no difference here in Australia if you sign [a document] electronically,” explains DocuSign APAC general manager Eitan Saban. “So if you go to court, the court will accept the agreement as if it was really signed in a traditional [way].”

Electronic signatures have gained traction in Australia, and are already accepted by traditionally conservative institutions such as the Commonwealth Bank. But is conducting legal business online contrary to cultural expectations of how a legal transaction should occur? “From the research we did here in the last six months we found definitely there is an awareness or cultural challenge,” concedes Saban. “But we do believe the same way we were able to transition many legal firms back in the US or even in London we would be able, with the right approach, to make this transition.”

From online law firms to automated documents and online transactions, the future of legal practice is developing a cutting edge dimension. The crucial question is simple. How far will it all go?


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