Teleworking threat to City is piecemeal only

Is the very model of the modern City law firm about to come under threat? This time the opposition comes not from globalisation, nor the Big Five accountants, nor US firms, but from a new kind of organisation – the "virtual law firm".

This week we reveal how Anthony Rose, former company commercial head at Barlow Lyde & Gilbert, is about to launch a network of individual former City practitioners who will work from home with their back-office outsourced to a separate company.

At the same time, Warner Cranston's founder, David Warner, is setting up a niche employment firm which will employ people working from home, but linked electronically.

And there is already a successful five-year-old full service practice, Davis & Co, whose 40 solicitors work entirely by teleworking with online links to clients.

That so many are thinking of leaving their big City firm to work at home is a symptom of the long hours and claustrophobic culture of many firms. Assistants hate the fact they have no personal life, and many partners dislike the endless meetings with fellow partners and the long commute into the City from their home-counties villages.

The idea behind teleworking is that not only are lawyers more productive since they are less stressed by office politics, but that there are also significant overhead savings. Davis claims he cuts 17 per cent from his annual costs by having minimal City premises and support staff.

So can these virtual firms really take on the traditional City firm? Not yet. And not in all areas. They are generally narrow niche practices staffed by lawyers whose loyal clients they could only have developed by working within standard City partnerships.

They specialise in areas which generally do not require a huge team, nor frequent face to face meetings and where their clients are IT-aware.

The mid-sized general practice firms may find their work undercut in specific practice areas that lend themselves to teleworking. But for the top-value work the demand for face to face negotiations and big teams means the big City firm structure is here to stay for some time yet.