The Point
This year FisherBroyles became the first virtual law firm to be included in the AmLaw 200 — The American Lawyer’s yearly ranking of the 200 largest U.S. law firms.
What’s distinctive about this law firm: Its business model removes two key items of overhead from all of its client bills: (1) lease payments for lawyers’ offices, and (2) payments to junior attorneys to “assist” partners with their work for clients.
This Matters
FisherBroyles’ logic:
1. What you need from a law firm is the best lawyer you can find for the type of problem you’ve got.
2. A fancy office doesn’t advance that goal. Neither does addition of junior attorneys shoehorned alongside that best-lawyer-you-can-find to bulk-up the total bill.
3. Pay that best-lawyer-you-can-find handsomely — but ruthlessly avoid overhead that doesn’t add value.
Because …
1. FisherBroyles rejects the two most wasteful elements of the legal profession’s business model:
Its founders describe it this way:
“We took away the two most inefficient aspects of the law firm model: the expensive fixed cost real estate, and the $180,000 a year associate being trained on the client’s time. And once you eliminate those two massive aspects of law firm overhead, that leaves a lot of capital revenue to pay your lawyers more.”
(Side note: Providing offices for lawyers is not, in and of itself, necessarily wasteful. However, law firms vie with each other for workplace splendor. As a Chicago real estate developer put it to me: “You want the best and the brightest lawyer working on your side. But as I sit in the lobby with the magnificent Lake Michigan view, and eye the lavish art collection, I’m always reminded of who’s paying for them. I really need that superstar attorney, but I don’t need the view and the art”
2. FisherBroyles recruits topflight attorneys from the most prestigious law firms,
FisherBroyles recently added new partners from Perkins Coie, Dechert, Jones Day, and Kelly Drye & Warren. This has been the pattern since its founding in 2002.
3. FisherBroyles confines necessary overhead to a carefully managed limit, which offers its partners a unique compensation formula — to favor that best-lawyer-you-can-find over elements of waste embedded in the legal profession’s prevailing business model.
As The American Lawyer put it:
” … The firm’s low overhead allows it to offer partners a greater cut of the profits than its competitors: Partners retain 80% of the fees they earn from work they originate and handle themselves, while the remaining 20% goes to overhead expenses, such as marketing and information technology.”
The one deliverable a corporate law function needs from a law firm: an experienced attorney who has mastered a specialized legal subject. What it does not need: Expensive overhead extraneous to that one deliverable — like fancy offices and junior, “assistant” attorneys who add only marginal value.