More Than 130 Lawyers Join New Spin-Off Law Firm, Including Rainmakers and Practice Chairs From Legacy Firm

Article by: Justin Henry
Read the full article on The American Lawyer

The law firm founded by former FisherBroyles managing partners started operating on Tuesday with nearly half the lawyers from their previous firm, including several practice chairs and rainmakers. Meanwhile, a C-suite of former Big Law executives have accepted positions at the newly founded firm.

Leaders at newly created firm Pierson Ferdinand said offer letters have been signed by more than 130 FisherBroyles lawyers, many of whom are the firm’s “highest-producers,” practice group chairs and co-chairs in a variety of practices. Before the exits, FisherBroyles had more than 280 lawyers.

The launch of Pierson Ferdinand marks one of the largest law firm spin-offs on record, rivaling the ill-fated departure of Lewis Brisbois Bisgaard & Smith lawyers in 2023. The more than 130 lawyers joining Pierson Ferdinand are based in 27 U.S. markets, firm leaders said, adding that partners will have a staggered transition due to obligations to fulfill client services at their legacy firm.

“This represents an elite version of the firm from which we came,” said co-chairman Michael Pierson, a New York lawyer who founded the new firm with the former managing partner of FisherBroyles’ litigation practice, co-chairman Joel Ferdinand. Pierson and Ferdinand confirmed their resignations from FisherBroyles in early December.

Professionals who have accepted offers at the firm include managing partner and general counsel Landon Speights, former deputy GC for FisherBroyles under Ferdinand; chief operating officer of business operations Matthew Bradley, who previously held business development roles at Foley & Lardner and Jenner & Block; partner and chief financial officer Meredith Wise Mendes, former Jenner & Block chief operating officer; and several leaders of FisherBroyles practices, including those in banking, private client services, fintech and blockchain, cyber risk and employment.

“We believed this was the perfect opportunity to create a law firm that represented the future of Big Law,” Pierson said. “It allows our lawyers to practice at the highest level and we believe the legal market is ripe for a firm like ours.”

In an email, FisherBroyles founder and managing partner James Fisher said, “The firm confirms it is parting company with a number of partners and wishes them the best in their future endeavors. As a leading Am Law 200 firm, we look forward with confidence to 2024, and providing our clients with all the world-class legal services they have come to expect from FisherBroyles.”

Profit-sharing incentives

As part of Pierson and Ferdinand’s recruitment pitch to colleagues at FisherBroyles, partners were offered participation in a profit-sharing plan and the title of “founding partner” if they join in the first quarter of 2024, Pierson said.

This is in addition to the majority of collected revenue that partners keep, a common feature of distributed law firms in which partners work mostly remotely and firms have low overhead. “The portion that goes to the firm is competitive compared to what the market offers,” Pierson said.

Pierson and Ferdinand declined to disclose details of the firm’s partner compensation plan, saying they are subject to a confidentiality agreement. Other distributed firms allow partners to keep 70-95% of their collections, although widespread profit sharing is less common.

People in contact with lawyers at the new firm said the profit-sharing plan is intended as an incentive for long-term commitment, reserving profits over a certain number of years at the end of which “founding partners” will be paid in shares or cash.

The ability to join as a “founding partner” and participate in the profit-sharing plan at the spin-off firm was a draw for partners like Eric Meyer, a New Jersey-based employment lawyer who joined FisherBroyles in 2018.

“That goes back to the leadership and the selflessness of the leaders who envisioned starting their own firm, who followed through and sent the message to other partners that we want you to come along for the ride of what’s going to be a fantastic success,” Meyer said. “A message of a tangible opportunity to share in the future and the profits? Sign me up.”

Not an ‘acrimonious’ departure

Partners who made the transition say the departures aren’t “acrimonious,” and they expect to refer work to FisherBroyles if conflicts ever prevent them from engaging with a client.

Pierson said FisherBroyles founders and managing partners James Fisher and Kevin Broyles can be credited as originators of an innovative model for operating a legal services business.

“They’re great lawyers and have great practices,” Pierson said. “It will be much smaller…We wish them nothing but the best.”

That sentiment is shared by multiple partners who made the move, including Meyer. For Meyer, leaving FisherBroyles for a start-up wasn’t an easy decision because of his fealty to the firm’s founders for benefiting his practice.

“As I told Kevin and James in my resignation letter, [FisherBroyles] put rocket fuel on my practice,” Meyer said. “You get many of the same benefits of practice as a brick-and-mortar firm, and it’s a successful compensation model. There are no billable hour requirements.”

Aside from participating in the profit-sharing plan, Meyer said he decided to move to continue working with colleagues and investment in technology and back-office functions.

“These are tell-tale signs of a firm playing the long game for the clients and for their partners,” Meyer said. “It’s a win-win.”

Modifying the model

Many hallmarks of the Am Law 200’s first fully distributed law firm will carry over to the start-up, according to an interview with leaders. Partners will keep a majority of collected revenue and will have a certain level of autonomy in setting rates, while personnel will operate without a brick-and-mortar office.

“We’ve been very intentional with creating culture with these partners for a very long time,” Pierson said, noting the new firm already hosted a holiday mixer in December, and he has invited partners to concerts at his New York City residence.

When asked how Pierson Ferdinand will distinguish itself from FisherBroyles, Pierson emphasized investments in technology and administrative support. The development of a new tech stack at the firm will include a customized legal practice management platform with an algorithm-driven compensation model, Pierson said.

“What we’re doing at Pierson Ferdinand is making massive investments in technology,” he said. “That way, we can unleash growth potential within our big partner base and really allow us to pull additional revenue levels that were not able to be pulled previously.”

While FisherBroyles, like many fellow distributed firms, employs only partner-level attorneys in order to nix associate salaries from its expense budget to spare clients expensive hourly rates, Pierson Ferdinand will hire lawyers as junior as fifth-years and above for junior partner and mid-level associate positions. The additional lawyer tiers will be paid according to another undisclosed payment plan.

Hiring sub-partner-level attorneys addresses one of the challenges facing distributed law firms that even firm leaders at distributed firms, like Rimon P.C., acknowledged: the lack of junior lawyers to move through the ranks and eventually succeed firm leadership.

Pierson said this tiered hierarchy allows existing partners to leverage more resources for clients and to train the next generation of Pierson Ferdinand partners on how to file a K-1 tax form and how to manage a caseload.

“There are matters that are more appropriate for people of a certain level on certain tasks for clients,” Pierson said. “On an M&A transaction, it’s more appropriate for someone doing due diligence and document review to have a supervising partner on the matter as opposed to having an invoice with partner time on those matters.”

While junior partners will also receive a certain percentage of their collections, mid-levels will be paid according to an “alternative compensation scheme,” Pierson said, again declining to elaborate.

Oversight from senior partners will show more junior attorneys “how to act and how to be true partners,” Ferdinand said.

Lofty Goals

The new firm’s decision to enter the hiring market for mid-level and senior associates in the Am Law 50 is notable considering many top firms have announced that they will raise base salaries in 2024, with the highest raises favoring senior associates. An associate of the class of 2018 getting paid according to the top market scale now is likely to earn $480,000 in 2024 after bonuses.

Still, Pierson said he and his colleagues have never struggled to recruit associates from elite firms.

“These are people willing to bet on themselves,” Pierson said. “We’re able to pay junior partners in a way to benefit them in a way better than now.”

Pierson said their goal is to reenter the Am Law 200 sometime in the next few years.

The firm is also open to alternative financing of the kind permitted by recent years’ state Supreme Court rulings in Arizona and Utah, which, unlike most U.S. jurisdictions, allow lawyers to share profits with non-lawyer investors.

“The trend in a few states to allow for sharing profits with non-lawyers presents many exciting opportunities, and the firm will continue to monitor those changes and include them in the firm’s long-term strategic planning,” leaders at Pierson Ferdinand said in an email.