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Can a Virtual Office Help a Law Firm Expand into a New City?

By Wilson Tandiono   |    February 4, 2014   |    11:19 AM

Expanding into new markets can be a great way for a law firm to grow. Whether the firm is a solo, small or large law practice, a new market provides client acquisition and business development opportunities. Having virtual or branch offices in other markets enhances the perception to clients that the business is well-established, growing, and has broader and deeper access to resources. Branch offices can also attract talent or supplement specialties in practice areas.

But entering a new market can be a daunting task because of market uncertainties, setup and operational challenges, organizational/management issues, and costs. A market expansion usually takes a lot of upfront planning and a large commitment of resources to find the right office space, build out that space and infrastructure, and hire the right staff. It may distract senior partners from their important work and is very time-consuming.

Onerous Costs of New Office Set-up

For example, finding and setting up a new office could easily become an 8-month commitment: 3 months to find a suitable office space, 1 month to negotiate the lease, 3 months for build out, and 1 month to set up the communications/technology infrastructure. Furthermore, in downtown San Francisco, it costs at least $70 per square foot for design and architectural fees, tenant improvements, and technology infrastructure. There are also security deposits, lease review fees, furniture, fixtures, copiers, and other costs that can add up to a very hefty bill. Running an office requires monthly lease payments, insurance, support staff payroll, equipment leases, phone bills, and other vendor payments. Currently, office rent in downtown San Francisco for a Class A building runs at least in the high-$40s per square foot.

In contrast, a virtual office can be set up almost immediately and at less than the cost of one typical billable hour per month. This strategy eliminates a large portion of the upfront costs and lengthy process of establishing a new office. A virtual office provides an instant professional business presence so the firm can market its services, acquire and service new clients, and generate revenue right away, all for a tiny fraction of the cost of a traditional office. It also gives the firm the opportunity to test out a new market without committing too many resources initially.

Exactly how does a virtual office help a law firm accomplish such a rapid and economical market entry? Stay tuned for the new post that explains the five key ways.