I have for some time pondered the concept of the "Virtual Law Firm." Perhaps some of the readers of this article have, also. Such a firm would exist only in cyberspace, on the Internet. Its members, associates, assistants and clerks could be physically located anywhere in the world that there was a reasonably fast Internet node. Its clients could contact it via the Internet. Its case files would reside on the Internet. Its databases would reside on the Internet. It would solicit the assistance of temporary workers ( legal, paralegal, and clerical ) on the Internet. Their tasks would be assigned on the Internet. Their work product would be submitted on the Internet. And client advice would be given on the Internet.

What would be involved to make that happen?
Probably less than we think, and the tools are available now. The Information Superhighway is still under construction, but lawyers are traveling it every day in both directions. What are some of the opportunities, pitfalls, and implications of this new environment? Marketing considerations? Ethical considerations?

Internet Law Firms
I have found no virtual firms in the United States, but there is at least one in Canada, where one individual has created a "virtual firm:" Markus Cohen, of Toronto, Ontario, has established what he refers to, and has trademarked, as "The Virtual Law Firm."[ 3] It appears to be a less formal and more flexible networking arrangement than the usual firm arrangement.

In the United States, there are some approximations of such an entity. ArborLaw [ 4], for example, is an "information resource" of two lawyers not formally connected in partnership. But such a partnership would be possible.

However constituted, such a firm would probably encounter local licensure issues, but no more so than in a typical firm. Partnership and networking agreement issues and distribution and compensation arrangements could be unusual, however, because likely the entity would not require the full time and attention of its "members" or "associates" or support personnel.

Additional ethical considerations arise under MRPC 5.1, which requires partners and other supervisors of lawyers to take reasonable steps to secure compliance with the Rules, and MRPC 5.3, which imposes similar standards concerning supervision of nonlawyers.

The conflict of interest rules concerning imputed disqualification, found in MRPC 1.10, deals with lawyers "associated" in a "firm" being subject to the individual lawyer conflict rules. Lawyers in a virtual firm on the Internet may not be willing to share their client information with other lawyers in that virtual firm to secure compliance with the rule, as freely as would lawyers in a physical firm. In that case, it would be incumbent upon the participants to find an alternative conflict screening device, such as a confidential neutral third party, to screen the cases.

The "former client of firm" rule of MRPC 1.9(b) and (c) may present equally thorny issues, although the proscription is a bit narrower, limited as it is to a "substantially related matter" and to the "use" of "information relating to the representation to the disadvantage" of the former client. The same solutions would be required.

As for the composition of the virtual firm, most likely, a few managers might be the only full time personnel, and the rest would be contract personnel or "temps." An example of this type of firm, although not a virtual one, is Glidden Partners, Houston, Texas, which heavily utilizes temporary personnel.[ 5]

There are also vicarious liability issues. For example. the Uniform Partnership Act as enacted in Michigan provides in Section 6(1), MCL 449.6(1), MSA 20.6(1),

"A partnership is an association of two or more persons . . . to carry on as co-owners a business for profit . . . ."

If the virtual firm is a partnership, or appears to be one, the vicarious liability of the partnership for the acts of the partner is likely. If a Michigan Limited Liability Partnership status is elected, vicarious liability is lessened, under the Michigan statute:

"Except for a tax obligation of the partnership, a partner of a registered limited liability partnership is not liable directly or indirectly, including by way of indemnification, contribution, assessment, or otherwise, for debts, obligations, and liabilities of or chargeable to the partnership, whether in tort, contract, or otherwise, arising from negligence, wrongful acts, omissions, misconduct, or malpractice committed while the partnership is a registered limited liability partnership and in the course of the partnership business by another partner or an employee, agent, or representative of the partnership. . . . This section shall not affect the liability of a partner in a registered limited liability partnership for the partner's own negligence, wrongful acts, omissions, misconduct, or malpractice or that of any person under the partner's direct supervision and control."[ 6]

The Internet as a Marketing Tool
Legal advertising on the Internet has certainly reached a fine art. One outstanding, non-Michigan site is that of Pepper & Corazzini, L.L.P.,[ 7] which has links to, and storage for, a wealth of legal information useful to clients and lawyers alike.

What ethical considerations do Michigan lawyers need to consider, in such a venture? Many lawyers will probably not intentionally seek clients in jurisdictions where they are not licensed. They may not be seeking clients in parts of Michigan remote from their offices. However, email may inadvertently cross jurisdictional lines, and web sites of Michigan lawyers may be physically located anywhere, and are as easily browsed in Australia as in Grand Rapids. Different states and countries have different rules about advertising and solicitation. Currently, however, restriction of web site access by persons outside of Michigan is not conveniently feasible.

I believe that a reasonable approach to the problem may be to disclaim whatever it is that we intend not to be doing in our electronic communications: advising clients in any jurisdiction, solicitation where unlicensed, solicitation anywhere, endorsement of or by the firm, or invitation of confidential communications.[ 8] Of course, if the site or communication is aggressively self-promoting or client-seeking, or in any event, disclaimers may fail of their intended effect.

In Michigan, the governing rules are Administrative Order 1978-4,[ 9] and MRPC 7.1 and 7.2.[ 10] Both are anti-fraud rules, with the added concepts that comparisons with other lawyers are proscribed unless capable of "factual" substantiation, and that "unjustified expectations" or expectations of illegal conduct may not be engendered. Thus, it would not be expected that Internet communications would be subject to any special substantive restrictions that would not apply to other forms of advertisement.

There is, however, a Michigan record-keeping requirement that is more likely to cause trouble: the mandate that a "copy or recording of an advertisement or communication shall be kept for two years after its last dissemination along with a record of when and where it was used." Typically, web sites are updated directly by electronic file transfer from a workstation, via modem, to a web server. A paper trail is not ordinarily generated. The workstation will contain the transmitted file, and its normal backup will preserve it, ideally, for the required period of time. However, what is less likely to be preserved is the data about its use.

If the word "use" refers only to the placing of it on the web site, some appropriate discipline concerning downloading of the site, or printing it, may suffice. If it refers to the viewing of the site by others, normal web site records, and even unusual site records, will not furnish that information. It seems reasonable to interpret "use" as it would apply to radio and television broadcasts, where listener and viewer data is similarly unavailable.

Another question occurs under Michigan rules: the possibility that a web site is a "lawyer referral service" within the meaning of MRPC 6.3(b), which prohibits utilization of for-profit lawyer referral services, and not-for-profit services unless that rule is complied with.[ 11] If the web site is that of the lawyer or his firm, certainly no problem should arise under 6.3(b). However, if the site is one provided by a number of lawyers not otherwise connected in a practice group or firm, a conceivable interpretation could include such a site. If so, no profit could be generated by the site, under existing rules, and it would need to be registered under 6.3(b)(1) through (3).

And if the virtual firm members' affiliation is not sufficiently close, the arrangement would run afoul of Informal Ethics Opinion 221, October 13, 1994, which holds that the use of the term "Group" is misleading and inappropriate if there is only one lawyer in the "group."

The Internet as a Firm and Client Database Repository
A law firm can approach functional paperless status, at least insofar as its own work product is concerned, and if it is willing to optically scan documents, with or without processing them with optical character recognition software, incoming documents and yellow-pad notes can be stored digitally also. Thus with an indexing programs or document handlers, firm data and client material can be retrieved from throughout a firm's computer network. More sophisticated databases, in a client-server environment, are not unusual for larger firms, and these can serve a "paperless office" function as well.

But such internal networks, even if sophisticated, may not readily lend themselves to virtual firm geography, where access must be made by multiple persons from multiple and geographically-separated physical locations. What is needed, therefore, is a virtual database. The virtual repository would necessarily contain all the client data and accounting data, the case file, and the client's own documents, however vast the collection. The documents can be entered digitally, scanned optically with or without OCR processing as needed for searching, and searched, viewed, downloaded and printed from the web site.

No special wiring, Wide Area Networks, modems, or routers are required either as server or workstation: just a connection to a fast Internet node.

And with web site access, the firm's files can be accessed while personnel are away from their main workstation, using laptops and radio modems, or off-site land-line telephone links.
At least one example of such a virtual database provider on the Internet does exist: The Virtual Repository.[12] It exists as a potential repository of databases of massive size. Arrangements may be made with the proprietors for a "test drive."

The Internet as a Communications Device
Email messages and web sites are powerful communications devices. Email programs can send messages to multiple addressees with a single command. Remailing email services can expand that horizon considerably.

There are privacy issues, however. Unencrypted Internet communications are not fully private, and sensitive information can be compromised, unless encryption is used. That being the case, there are confidentiality issues as well. The only safe course, therefore, is encryption.

The Internet as a Research Tool.
Much has been written about the legal resources on the Internet, and reference is made to The Legal List[ 13] and a recent and excellent article by Aaron M. Grossman, "Great New Web Sites for Lawyers,"[ 14] which explains and discusses www.findlaw.com, www.lawcrawler.com, www.ilrg.com, and other Internet resources for the legal profession. The Virtual Law Firm would no doubt use such resources.

The Internet as an Employment Resource
There are many web sites on the Internet that put would-be employers and would-be employees in touch with each other. For example: www.careermosaic.com; www.careerpath.com; www.occ.com; and www.aarp.org/bulletin/webjobs. The Lawyers' Counsel Connect web site, www.counsel.com, has job postings available for members. Employment it seems could be arranged over the Internet.

I have thought that, after the emergence of temporary lawyer firms which place attorneys in contract positions for limited periods of time, we would see the appearance of temporary or "contract" lawyer placements on the Internet, for contracts to work on the Internet. I have not yet seen such institutions, however. But they would be of great benefit to the Virtual Law Firm.

Some Economic Considerations
We soon learn that computer ventures of any kind cost more than might have been anticipated by the users. And there are hidden costs of support and upgrading as well. Moreover, as pointed out in a recent computer magazine article,[15] it costs $2,000 a month for a T1 line; low-power, cheap systems lack sufficient throughput for many web sites, and lack security; and with 1 million ".com" Web domains, a web site can become lost, without adequate marketing and advertising. And by way of comparison, amazon.com, a virtual bookstore, lost $0.3 million in 1995 and $5.8 million in 1996. And IBM is shutting down its virtual shopping street.

Conclusions
The Virtual Law Firm, on the Internet, may be an idea whose time has come. It will be interesting to review the subject a year from now, and see how many such firms exist. In the interim, I would welcome comment from readers as to their interest in supporting a Internet contracting clearinghouse, which would broker spare time blocks between lawyers to work on projects emailed between them, with the result delivered via the Internet.

If readers care to email their comments on the Internet Law Firm or the Internet Contracting Clearinghouse to fisherv@fisherlaw.com, I intend to submit the results for publication here.