How Does a VLO Fit In With the Paperless Law Office Tech Trends?

This is an excerpt from a post I made on the VLOTech website explaining how a virtual law office (VLO) fits into the trend of attorneys using technology to create more paperless law offices. As more of VLOTech's clients go live with VLOs across the nation, the examples of virtual law practices will be clear. In the meantime, I'm saying forget about thinking outside the box to understand the virtual law office concept. Just don't get in a box in the first place.

In the past two years, the legal profession has seen the introduction of several web-based law practice management tools. These web-based systems focus primarily on time and billing management for attorneys. Separate systems are devoted entirely to online case management. Many attorneys seeking to have “paperless” law offices are creatively combining different web-based applications with software products, such as Adobe, to create a more digital law practice.

VLOTech strongly supports this movement by the legal profession to use the most current technologies to provide better services to clients and to create more productivity and balance in the lives of legal professionals.

Where do completely virtual law offices fit into this trend?

To understand what VLOTech and it’s attorneys are envisioning and practicing, think one step beyond web-based practice management systems and tools. Look at the way other businesses successfully function in virtual reality worlds and how avatar-based forms of communication are breaking down the barriers of geographic location and economic limitations. Less extreme, think about how many people handle all of their banking and financial matters completely online without ever walking into a brick & mortar bank building to chat confidentially with a financial consultant. A virtual law office capitalizes on the secure web-based technology available to create the infrastructure of an attorney’s law office online. VLOTech provides the technology and each individual attorney or law practice uses it to design the virtual law practice that meets their needs.

By the basic definition, a completely virtual law office (VLO) is a professional law practice that exists online through a secure portal and is accessible to the client and the attorney anywhere the parties may access the Internet. A VLO provides attorneys and clients with the ability to securely discuss matters online, download and upload documents for review and handle other business transactions in a secure digital environment. With a VLO, an attorney’s clients benefit from the convenience and accessibility. The attorney benefits from the flexibility of a virtual law practice, an online client and revenue generating software, and lower overhead associated with setup and maintenance of a nontraditional law office.

ABA Hosts Virtual Reality Law Conference in Second Life

The ABA’s Conference “Why Virtual Worlds Matter for Lawyers” was held today at the Justice Center in Second Life (SL). It was a fascinating discussion of virtual reality law issues and the future of law in virtual reality worlds.

I attended the conference through my avatar on SL while other attorneys participated through teleconference for CLE credit. Panel members included David Elchoness, Executive Director of the Association of Virtual Worlds, Lauren Gelman, Executive Director of Stanford Law Center for Internet and Society, Steve Mortinger, VP & Associate General Counsel of IBM Systems & Technology Group, Francis Taney, Chair of the Technology Litigation Practice Group, and Benjamin Duranske, attorney and blogger who writes about his experience in SL and about virtual reality law on his blog, Virtually Blind. He has also written the book Virtual Law: Navigating the Legal Landscape of Virtual Worlds.

As far as practicing law completely through a virtual reality world, the security is not fully there yet. Not to mention that the client base would be limited and difficult given multiple jurisdiction issues. I'll stick with my VLOTech virtual law office. However, there are a number of American attorneys who have opened up virtual reality offices in SL and are helping to write and interpret the laws that will govern this virtual reality world.

Here’s a screenshot of the ABA Conference today (I'm the short-haired blonde sitting down in the middle. It costs Linden dollars for an avatar makeover and new suit, so I stuck with what they gave me.):




If you are not familiar with SL, you might want to check it out. I have limited time for virtual reality worlds right now, but I enjoy keeping up with the development of the technology behind these worlds. I find the environment extremely addictive because of the ability to meet new people from around the world and travel (fly) to different virtual reality developments. There is a Second Life Bar Association that meets every second Saturday in the Justice Center on SL and I may limit my SL interaction to those meetings. It might be a great way to meet some of these pioneering attorneys who are out there creating the legal system that will govern virtual reality worlds.

Why does this matter to the rest of us in the "real" world? Because individuals in the real world are creating viable businesses completely based in SL. Virtual world real estate is bought and sold in Linden dollars but that translates into US dollars in the real world. Companies, such as IBM, and many universities, have SL presences and own real estate in SL. There are IP, business, employment and contract law issues that arise in SL among other matters. Some of these issues were discussed in the conference today and hopefully they will make a transcript available.

Avoiding the Unauthorized Practice of Law in Other Jurisdictions When Practicing Law Online

Practicing law from a web-based virtual law office brings the risk of unwittingly establishing an attorney/client relationship regarding a legal matter that the virtual attorney is not licensed to handle. The unauthorized practice of law in other jurisdictions can be avoided by following some simple practice methods.

First, the virtual law practitioner has the responsibility to provide clear notice throughout the VLO website that he or she is only licensed to practice law in the states in which the attorney holds an active bar license. This information should show up at every turn - from the terms and conditions for the website to the registration and clickwrap agreement allowing access to the online client's homepage.

Second, the virtual law office website should contain contact information and the name of the attorney running the VLO. For some state bar associations, such as North Carolina, the requirement extends to providing a physical mailing address for the prospective client. This information should be located in a section that is easily found by the online client, such as an "About Us" section or at the start of the website's disclaimer. By providing adequate notice throughout the VLO, the attorney should not be found to be soliciting clients from a state where he or she is not able to practice law.

In addition, a well-designed VLO should contain a jurisdiction check for the benefit of the client and the attorney. This safe-guard was built into the VLOTech software for this purpose.



When the client registers on the attorney's VLO website, a simple check for the zip code notifies the attorney that the client is a resident outside his or her jurisdiction. A note would appear to the client which states that the attorney may only be retained to answer legal questions and handle legal work related to the laws of the state for which the attorney has an active law license. The jurisdiction check should not prevent the client from continuing with the registration process, but serves the purpose of providing more than adequate notice of the attorney’s jurisdiction. Through this process, the attorney is provided with a red flag on the backend of the law office to let him or her know that the client resides in a different state and may not have a legal matter that the attorney is permitted to handle.

With the combination of adequate contact information and notice to any prospective clients regarding jurisdictional limitations, the virtual practitioner should be able to safely avoid crossing the line into unauthorized practice of law.

Screenshots of VLOTech Client Side

I posted the manual for the client side of the VLOTech software on the VLOTech blog here. I am excited to share the new format with my own online clients. The software has everything that I have been using to practice law online for the past couple years at my own virtual law practice, but it also has some additional features that I think will make my virtual practice run smoother for me and my clients.

One of the great things about the software-as-a-service model is that the software doesn't require installs for every different version or patch. VLOTech can get input from the attorneys using the product to decide what aspects of the technology to develop next. Updates to the software are then just added to the existing clients' systems. It's development guided by the users which just makes good sense.

We have a test site up and running for our first group of innovative attorneys to try out before they go live with their virtual law practices. The goal is to get an online demo on the VLOTech blog so that it's available for everyone. For now, the focus is on supporting our first e-laywering pioneers. We now have attorneys from 21 different states who have expressed an interest in opening a web-based virtual law practice with VLOTech. There's clearly something going on here.

Accepting Online Payments in a Virtual Law Office

Accepting credit card payments from clients has come up several times recently on the ABA's Solosez listserv. Some list members were questioning whether it was ethical to accept client funds online if the funds were meant to be held as a retainer. By most state bar regulations, a retainer should be held only in the attorney's trust account.

How should an attorney operating a completely virtual law office handle accepting online payments from clients?

To start, if a virtual law practice accepts credit card payments from clients, then the attorney must make sure that the practice is Payment Card Industry Data Security (PCI DSS) compliant. PCI compliance must occur whenever any business stores, transfers or collects credit card information from clients. Failure to comply with these rules, set by the credit card industry, may result in a business no longer being allowed to take credit card purchases, in addition to multiple fines and penalties.

It is unlikely that a virtual law practice would handle the number of transactions that require an audit by the PCI DSS Qualified Security Assessors. However, the standards in this area are constantly being changed. The responsibility falls to the VLO attorney to keep any online purchases of legal services by credit card compliant with the most current rules and regulations.

It should go without saying that a VLO must also be set up to comply with rules set forth in that attorney's state bar trust account guidelines or other bar association regulations. Because many attorneys operating a VLO will choose to use the fixed fee method of billing in which the client is provided and agrees to pay a fixed fee before the completed services are delivered in full, the VLO attorney may not require a separate retainer. If a retainer is required as part of the initial price quote and must be completed before the VLO attorney proceeds, then those funds should most likely be placed in the VLO’s trust account and kept separate from the VLO operating account per the rules of most state bar associations.

As I mentioned above, one gray area is the use of Paypal or other credit card processing service to hold retainer fees. The issue is whether the retainer may be run through the credit card processing company even if that company routes the funds to the attorney’s trust account rather than operating account. Because the funds would first be transmitted to the attorney’s online account at the credit card processing company and then routed to the trust account, this may be in violation of the online attorney's state bar trust account rules because for a short period of time the funds are held by the credit card processing company.

There are a variety of ways that the online attorney might choose to set up the payment function of the VLO and his or her compliance with trust account rules would depend on that particular setup. With the use of the VLO billing features and invoicing process, it may be not be desirable for the attorney to request a traditional retainer fee from the online client or if necessary, the VLO attorney could request to receive the retainer through snail mail for direct deposit into the attorney’s trust account. In which case, the question of the trust account being attached to the credit card processing company would not exist.

While all of this may sound hyper-technical because the funds would end up in the attorney’s trust account as required, if PayPal or the credit card processing company in question was not one of the financial institutions approved by the attorney's state bar for the purpose of maintaining trust accounts, then the transaction might be in violation of their bar’s trust accounting rules. This is a question that the individual state bars may have to address as more attorneys provide legal services through virtual law practices.