FisherBroyles, recognised as the largest law firm operating on a work-from-anywhere model, is experiencing significant upheaval as partners object to the firm’s handling of expenses and a recent tax accounting mistake. Key figures Michael Pierson and Joel Ferdinand, who led the corporate and litigation practices respectively, departed late last year to establish Pierson Ferdinand, stating intentions to recruit up to 130 of their former partners.
If this action comes to pass, it could result in nearly 50 percent of the approximately 280 lawyers at FisherBroyles moving over to the new firm. This large-scale departure echoes recent events at other leading law firms, such as the case of over a hundred lawyers leaving Lewis Brisbois to join a new establishment.
These events provide a stark example of the economic difficulties encountered by owners of virtual law firms. Even as they endeavour to run a lean operation, they must also offer adequate resources to keep their partner lawyers content. Notably, FisherBroyles had the distinction of being the first such firm to feature among the country’s 200 largest by revenue, according to data from The American Lawyer.
However, significant dissatisfaction has been reported among FisherBroyles lawyers over the firm’s financial model. This model allows partners to retain 80 percent of the revenue they generate, while the remaining 20 percent is largely claimed by founders James Fisher and Kevin Broyle, who cover the firm’s limited expenses. Lawyers have complained about shouldering expenses such as legal research and marketing costs, arguing that these should have been covered by the firm’s share. Still, more discontent was fueled by the firm’s mismanagement of a tax issue, which led to partners in other states having to pay taxes to California.
The newly established Pierson Ferdinand appears to be providing a more appealing financial model for disgruntled FisherBroyles partners. In contrast to the latter’s model, Pierson Ferdinand has implemented an incentive plan that rewards early joiners with a “true piece of the profits”, according to Pierson. Additionally, the firm plans to invest heavily in technology, including a customised legal practice management platform, and will cover costs for legal research and other productivity-related services for its partners.
Ultimately, this series of events serves as a vivid demonstration of the challenges and conflicts that can occur within the innovative business models of virtual law firms. For more in-depth coverage of the FisherBroyles exodus, you can read the full report here.