New 130-lawyer virtual law firm sets sights on Philadelphia hires for growth

Article by: Jeff Blumenthal
Read the article on Philadelphia Business Journal

The co-chairman of a new cloud-based law firm says it plans to target Philadelphia as a growth area and compete locally for lateral partners.

Michael Pierson, along with co-chair Joel Ferdinand, broke off from another virtual law firm, FisherBroyles, officially last week with 130 of that firm’s roughly 280 lawyers to form Pierson Ferdinand.

“There are lots of lawyers there, lots of sophisticated clients, it's one of the largest metropolitan areas from a GDP perspective and so many of our partners from Philadelphia will be joining us at the new firm over the course of the first quarter," Pierson said. "Philadelphia is absolutely a great market for us that we'd like to be even larger.”

Like FisherBroyles, Pierson Ferdinand will not have formal offices and all of its lawyers spread over 20 different geographic markets will work remotely. The firm will have office space for meetings as needed. In Philadelphia, if lawyers need to host a meeting with a client, they will have space provided at One Liberty Place at 1650 Market St. in Center City.

So far, Pierson Ferdinand lists six full-time lawyers practicing in the Philadelphia area. They include Eric Meyer, fellow employment lawyers Sidney Steinberg, David Renner and Benjamin Teris, corporate lawyers Jonathan Rosan and Todd Martin, and commercial litigator Jill Guldin.

Ferdinand, who practiced at Fox Rothschild in Philadelphia from 2006 to 2013 and then served as general counsel for Exton-based Physio for two years before joining FisherBroyles, will also spend some time here.

FisherBroyles lists 15 lawyers left in the Philadelphia area.

Pierson said he would be “very surprised” if Pierson Ferdinand were not larger by the end of the year. He said the firm is not focused on growing by a specific percentage but rather finding the right lawyers who fit the firm’s culture.

Darin Morgan, a legal recruiter with Major Lindsey & Africa, said he has not worked with FisherBroyles or Pierson Ferdinand, so he couldn’t comment on those firms specifically. But he said he still hears from a large number of lawyers who do not want to work from an office full-time and that is an important factor in their future career plans.

"To some people, there's no question that not having a requirement to come in, or even any expectation of ever coming in, will be very attractive,” Morgan said.

When a new firm enters the Philadelphia market, Morgan said some lawyers are looking for something different and others are more risk averse. By not having real estate overhead, Morgan said firms like FisherBroyles or Pierson Ferdinand will have the flexibility to “go after some talent that they might not otherwise afford. They're keeping expenses low so it can help their recruiting efforts.”

In general, Morgan expects to see an uptick in lateral recruiting this year. There is always a market for partners with books of business but the associate market is driven by the state of the economy and demand for legal services.

“Last year, a lot of firms put their associate hiring on hold because concerns about the economy in general,” Morgan said. “I think they're sort of trying to be proactive about it now. The economic world did not implode. And I just have this feeling based on a lot of conversations with different firms, both here, D.C. and New York, that firms are going to be upping their hiring this year.”

While it does want to add Philadelphia-area lawyers, Pierson said the firm will not be recruiting with geography being top of mind. He said being a virtual firm means searches are not confined by where it has a formal office.

“In order for us to work with that person, inside the law firm, this person could have practiced in an AmLaw 50 firm in New York City, Philadelphia or Chicago, and they now live 500 miles from the nearest airport,” Pierson said. “We can connect with that person and have them service clients really from anywhere.”

Meyer, who joined FisherBroyles in 2018 from Dilworth Paxson and is making the move to Pierson Ferdinand, said he cannot remember the last time he had a client meeting that did not involve food and beverages — usually in a restaurant.

“That was even the case when I was in brick and mortar,” Meyer said. “The days of client meetings, or dare I say clients wanting to meet with their lawyers, are seemingly in the past, at least formally. We catch up over Zoom, we meet in person for lunch, breakfast or for drinks. So it's a great way to foster those relationships with the clients in a way that is better suited for both sides. This is a relationship business and that's the way we build those relationships rather in stuffy boardrooms.”

The firm is led by New York-based Pierson and Atlanta-based Ferdinand — both of whom were managing partners at FisherBroyles. Pierson believes this to be one of the largest law firm launches in U.S. history but that the differentiator is many of the lawyers have worked together for decades and are used to being in teams rather than siloed practices. He said the firm has developed new technology, including a customized legal practice management platform with an algorithm-driven compensation model.

All 130 lawyers moving to Pierson Ferdinand from FisherBroyles are partners. Fisher Broyles did not have associates. Pierson said those lawyers will be given flexibility to decide how to staff their teams. They could add paralegals, support staff or mid-level lawyers. Pierson Ferdinand is introducing a new category of partner at the firm — called junior partner that will start for lawyers five years removed from law school.

“It allows them to really shadow very experienced lawyers to learn from them about how to service clients, how to manage a lot of the administrative tasks associated with being an equity partner in a law firm, and really to train the next generation of a Pierson Ferdinand partner,” Pierson said. “So that's probably the largest change that we're making in terms of our model and how we are approaching delivering better value to the client, ultimately, by allowing our partners to choose to hire more junior people to the extent that they need them.”

Morgan, the legal recruiter, said junior lawyers might find it hard to develop professionally without being in an office setting at least part of the time. Pierson Ferdinand does not recruit lawyers directly out of law school and is focusing on adding lawyers who would be considered mid-level associates at other firms for the new junior partner category.

Despite the remote working environment, Pierson said junior partners will still be developed like they would at any other law firm — though the firm will aggressively leverage technology "to collaborate on documents."

By eliminating physical real estate, Pierson said that cuts perhaps the second-largest cost for any law firm behind personnel. And he said that savings is passed to clients, claiming that the firm’s hourly billing rates are two-thirds that of an AmLaw 200 firm. The lack of overhead, he said, also allows the firm to pay its lawyers “unparalleled compensation” for a firm that size.

“If you got a book [of business] of $2 million in a traditional law firm, moved to Peirson Ferdinand and can retain up to 80% of collective revenue on that book, your one year compensation will be $1.6 million,” Pierson said.

Morgan said the question will be how much of the savings from not having offices will be passed along to lawyers and clients.

“The proof will be in the pudding,” Morgan said. “It's clear that this is something that's become a little bit more popular. Firms are looking to minimize or eliminate their footprint. So the bottom line is, yes, to certain candidates, this will help them. To others, I'm not sure because there's always going to be partners who want their team with them every day."