The concept of the 'virtual' law firm is well-established in the USA, and most definitely now has a foothold in a changing landscape here. A new breed of low overhead / lower charge-out-rate contract outfits such as Axiom, Riverview Law, Peerpoint, ItsMyLaw, Keystone Law, Lawyers on Demand, Halebury, Everyman Legal, Scomo, Cubism... offers an increasingly viable alternative to law firms in a recovering economy. Draw whatever analogy you will, "virtual" firm or high-quality temps, project-orientated legal services can be enlisted by the appointor as and when needed. To General Counsel, the option represents an ability to supplement in-house legal groups without having to recruit further full-time employees. This often means freeing-up permanent staff away from the high volume leg-work that contractors will offer to take over.
There is no partnership structure in the traditional model. With lawyers or teams either deployed on site, in a serviced office hub or working from home, there is no office to maintain. The "virtual" feel is enhanced by what will be a common internet-hosted secure server holding all the firm's files.
The scope for flexible working is obviously far greater for the individual contract lawyers, who are effectively independent self-employed consultants, choosing to work when they please to an extent. This enables greater control over the work/lifestyle balance or can provide convenient and productive career "in-fill" between full-time posts or coming back from a career break. You get paid for as much as you do basically, and without the hierarchical structure of a conventional firm. The umbrella firm will take a percentage cut from the charge out, but the lawyer can expect to take home somewhere in the region of three-quarters of the fees they earn - a much higher proportion than a salaried fee-earner in a conventional law firm.
But if you don't do or get enough work, you will not see the benefits. This might suit portfolio or part-time workers, but if you are revenue driven, it will require self-motivation and putting yourself out there. Further, you don't have the cocoon of a law firm around you in market downturns: a freelancer is going to feel the effects more acutely and directly. Nor will the benefits package compare with a conventional firm. There is the lack of an obvious career path, but more substantial 'managed services' contracts can offer more of a structure for the individual, and potentially a broad range of experience can be gathered to take back to conventional practice.
Such outfits are going to require a minimum level of PQE in their recruits, for example, 2 or 5 years. You are going to have to fit the mould too, in terms of the persona of the 'firm'. Axiom for example probably takes on 1 in 50 of the lawyers who approach them. Those they do hire average earnings of £125,000 pa.