The mark of success for FisherBroyles, a cloud-based law firm with more than 200 lawyers in 22 offices around the United States, was actually a loss.
In 2013, 16 attorneys representing 25 percent of FisherBroyles at that time, departed to start their own competing cloud-based firm. But the takeaway for firm co-founder James Fisher was that the cloud-based law firm business model had “matured enough” to have a spinoff.
“It was a stressful time, but, after that, we simply went through the roof,” said Fisher, who is also co-managing partner of the firm.
Since 2013, the firm has quadrupled in size. Earlier this month, it acquired the Sacramento-based IP boutique Ntellect Law, which included three patent attorneys, a patent engineer, and support staff. By 2018, Fisher said he expects his firm to have annual revenues topping $90 million, which could put it among the AmLaw200.
Fisher, who earlier in his career practiced at Baker McKenzie and Holland & Knight, said he wants FisherBroyles to be a big law firm without the baggage of Big Law.
He said the firm, which launched in 2002, has no associates; it does not have any fixed-cost real estate because its attorneys all work remotely; and its attorneys have no billing quota. According to Fisher, the firm hires only attorneys with several years of experience and lets those attorneys set their own billing rates and decide whether they need an office outside their home.
“We just decided to basically take all the things we hated — and what our clients hated — about Big Law and remove them and just leave the good parts,” he said.
The firm is full-service, handling everything from litigation to real estate. One of its biggest practice areas is intellectual property, and Fisher says some of the firm’s major clients include Symantec Corporation, McKesson, Porsche, Delta Airlines, Facebook, Juniper Networks, Adobe, Aaron’s Inc., Equifax, Land Rover, and Tesla.
Fisher spoke with Big Law Business about why he thinks he’s found the best legal services delivery model, how to keep lawyers happy, and his plans for the future — including international expansion. The following interview has been edited lightly for length and clarity.
Big Law Business: Tell me about how you started your firm? What was the philosophy behind it?
Fisher: We started the firm back during the first Internet recession. In around 2000, my co-founding partner and I worked for a technology firm that had a lot of startup clients that were being funded by the free money that was flying during the Internet boom. Then the Internet bust came, and these clients couldn’t afford legal services anymore. During that bust, the inefficiencies of the way Big Law was being run were glaringly apparent. So we just decided to basically take all the things we hated—and what our clients hated—about Big Law and remove them and just leave the good parts. I’m sure we are the first large law firm to figure out a way to align the interests of our lawyers with the interests of our clients.
Big Law Business: How did you eliminate the things you hated—the billing quota, the real estate, the politics of compensation decisions?
Fisher: Number one, we don’t have any fixed-cost real estate. All of our real estate is basically on an as-needed basis. If we’re not using it, we’re not paying for it, and that leaves a lot of revenue to distribute among the people who actually do the work. Our compensation model is based strictly on a transparent formula. The basic gist of it is, for lawyers who bring in work and do it themselves, they keep 80 percent of the revenue—that is almost three times what a typical Big Law lawyer keeps. And at FisherBroyles, for the most part, partners have control over their own billing rates because we figure our interests are aligned and who knows better what rates are appropriate for a particular client than the attorney that’s in charge of the relationship with that client.
Big Law Business: What happens to the other 20 percent of revenues?
Fisher: It goes to running the firm: administration, software, accounting, marketing, business development, all of the things that aren’t individual-partner related, including malpractice insurance, the funding of 401Ks, etc.
Big Law Business: Why don’t you have associates?
Fisher: Part of our pitch to clients is we don’t have any lawyers that need to be trained on your dime. We’re not in the business of training young lawyers. I think the way lawyers are trained these days is off the leash. I think lawyers should be trained more like doctors, and I don’t think clients should subsidize their training. As we grow larger and larger, I have certain aspirations of how we’re going to do that one day, but we’re not big enough where I can make that contribution to the legal industry.
Big Law Business: What should training look like?
Fisher: If you’re a first-year associate at a Big Law firm, you’re not doing a whole lot of substantive stuff because the rates are too high, so you’re not really getting any meaningful work until your fourth or fifth year. If the cost of having associates was dramatically lower, than the law firm could afford for associates to actually do work. Once we’re solidly in the AmLaw 200 and revenues are such that we can spend money on projects like that, I think there’s a huge demand.
Big Law Business: Are there any cases that are harder for you to get because of your model?
Fisher: I don’t know because that hasn’t been the case. We have 200 lawyers who really are willing to do just about anything to pitch in because they’re very well compensated to do so. If there’s a huge project and we need to mobilize 30 lawyers, that would be incredibly easy to do. And let’s say we have a project that was so big that our current resources couldn’t handle it; we would handle it the same way any number of AmLaw 200 firms would, by seeking contract lawyers.
Big Law Business: How do you create culture in a cloud-based firm?
Fisher: The culture at FisherBroyles is dramatically different than at Big Law because our lawyers are frankly happier. They have control of their lives; they make more money; they’re not constantly worried about being laid off because they haven’t billed 2,000 hours a year. We also have an annual firm retreat where everyone gets together for social things and educational workshops. We have firm-wide monthly practice meetings via telephone and our practice groups have monthly calls as well. When I was at Baker McKenzie, we had office space, but most of the attorneys I worked with on a day-to-day basis were in other countries—I never saw them. When people who are normally underrepresented in Big Law realize they’re being treated like everyone else, it’s a much more congenial atmosphere. There’s nothing cutthroat about FisherBroyles. We all have the same goal: to service our clients and to be happy lawyers.
Big Law Business: How big would you like to get?
Fisher: The model is completely scalable. I don’t really have a number as to what would be too big. If you were to ask me where I thought we’d be in 2018, I’d say between 250 and 300 lawyers by the end of 2018. Just to give you a little preview, we’re actively searching for opportunities in China and the UK.
Big Law Business: How do you recruit?
Fisher: First of all, we incentivize our lawyers to help build the firm. They’re actually compensated for doing that. Everybody has a buddy or a friend who’s unhappy practicing at Big Law; that’s not hard to find. The other way is through headhunters.
Big Law Business: How are partners compensated for recruiting?
Fisher: If a partner brings in a new lawyer, the partner who recruited that lawyer gets to keep 2 percent of the new attorney’s revenue for as long as they’re both at the firm. That might be one of the most important elements of our formula—to give everybody a piece of the pie to help grow the firm. And the 2 percent doesn’t come out of their share; the recruiting compensation comes out of the firm’s 20 percent, so it’s a huge incentive to grow.
Big Law Business: Do most of your attorneys come from Big Law?
Fisher: The vast majority are ex-AmLaw 200. It’s an eat-what-you-kill model and often times a lawyer coming from in-house or the government doesn’t have a client base such that they don’t feel comfortable being in that kind of model. But there’s no hard and fast rule because often there will be a rainmaker at the firm who can provide them enough work internally to thrive.
Big Law Business: How is rainmaker revenue distributed?
Fisher: If you bring in the work and pass it off to another FisherBroyles lawyer, the rainmaker keeps 32 percent of the revenue that’s collected, and the lawyer who does the work keeps 48 percent.
Big Law Business: What’s your pitch to potential clients and attorneys you want to hire?
Fisher: It’s essentially the same pitch. Our rates are lower; you’re getting the same quality of work done quicker and at a lower rate, and, I don’t hide from this at all, we pay our lawyers a lot more, which allows us to attract top talent, and our model is still efficient enough to charge you less.
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