Automation and Algorithms: How Pierson Ferdinand Aims to Build a New Type of Law Firm

Article by: Isha Marathe
Read the article on Law.com

Pierson Ferdinand, a new law firm comprising over 130 lawyers—many, including the managing partners, from FisherBroyles—began operating last week.

Co-chairmen and founding partners of the new firm Michael Pierson and Joel Ferdinand spearheaded the spinoff firm after resigning from FisherBroyles in December 2023. They spoke to Legaltech News about their ambitions to move away from a traditional brick-and-mortar law firm, to one that is built from the ground up with technology in mind.

Like FisherBroyels, which operates as a remote law firm, most of the staff at Pierson Ferdinand will work remotely as well, relying heavily on a new tech stack—complete with proprietary algorithms and practice management systems—that Pierson and Ferdinand, along with technologists and partners, are cultivating.

It’s no easy feat, they told Legaltech News, but with an eye on tools that will minimize nonbillable work, the new law firm hopes to redefine what an “elite” law firm of the future will look like.

The following conversation has been edited and streamlined for length and clarity.

Legaltech News: What prompted the move from FisherBroyles over to your new firm, Pierson Ferdinand?

Pierson: We really wanted to present to our new partners a real vision for the future about what a modern elite law firm could look like. And in presenting that vision to our partners, we had to really focus on a number of areas. One was the people. So the leadership team that we’ve assembled as the culture in terms of the partners who are coming along with us. And [the other part was] of course, the technology that we’re going to be able to use in order to support all the partners who choose to come over to us.

What does the best technology stack look like for a new firm?

Ferdinand: The hard part is creating something bespoke from scratch. There’s a lot of work that goes into it. This is something that we thought through for what are the next decades—not the next year—but the next decades [going to look like]. And how do we put up a tech stack that can grow and change over time where that core base doesn’t create a legacy system that eventually needs to be changed, but has a legacy system that can grow and mold with the time.

[Pierson] and I both have experience in the corporate world outside of law firms, and the C-suite of regular companies. And what we noticed when we’ve worked in other C-suites, that are non-law firm, is that’s a problem that you run into. You have a legacy system that eventually has to be changed and it’s incredibly expensive to [import] over to your new system. There’s a lot of growing pains with the new system, [then] you have to transfer all the data and make sure it is pristine.

What was top-of-mind as you were building this tech stack from the bottom up?

Ferdinand: We looked to deleverage the non-billable time of our partners. In a law firm, you’re making money when you’re billing. Clients don’t want to be charged for administrative tasks. Clients want to be charged for real legal work. So what we were presented with was how to solve that problem [using] your technology to deleverage the non-billable, to leverage the true billable so the client sees value add, and the partners are not bothered by non-billable.

How did you do that? What tools and technology helped you achieve this idea of “deleveraging the non-billable” into your tech stack?

Ferdinand: We started with a tech stack that exists …. on a daily basis [we re-code it to] automate [tasks], to make everything easier.

For example, we have a template database with 80-plus forms that are jurisdictionally compliant in every jurisdiction. But when our partners go to send out an engagement agreement… those are the contracts that can take quite some time to draft. [But] they take less than 60 seconds here [because] it’s automated to the system, they are tagged [to] the specific client matter number, it is prefilled and it’s done. So we really looked at a technology to make changes like that across the board. So that, [when] every partner, every attorney is touching a matter, it isn’t really messing around with the nonbillable.

We want to focus on thinking. Because that’s what a client wants [from us]—to think, to be thoughtful and not to bill every second of our time. And through technology, we’re able to do that.

Can you talk about some of the proprietary systems and tools you’ve built? Let’s start with your legal practice management platform.

Pierson: We built all of this in order to fundamentally reduce the amount of time that all of our lawyers had to spend doing anything other than practicing law and being the best lawyers for their clients that they could be.

[For us] that means building a legal practice management platform that’s intuitive, that’s responsive, that’s scalable, to hundreds, if not thousands of us lawyers. You really need to think about the workflows in terms of how the client comes in, adding them as a contact, putting all of the entity names and checking who’s adverse, who [has] a related party, making sure that all of this is seamless. And that it’s very [user friendly so] lawyers can spend more time basically practicing law than they can on these administrative tasks.

But then on the backend, once all those client matters come in, [how you] evaluate them, how you put them through the conflicts process, how you check them [with the] business acceptance committee, how you fundamentally go through that process of onboarding a client, running conflicts, all the way to signing an engagement letter and getting a client matter number—a lot of [this can take] law firms several days. In our law firm [it can] happen in a matter of hours. We can do that using the highly customized legal practice management platform that we built.

You’ve also built an algorithm-based compensation model for accounting. What is that exactly, and how did it come about?

Pierson: We don’t have a compensation committee. We don’t have discretionary compensation. All of our time is paid directly through a web-based algorithm we built that calculates the tens of thousands of variants for all our partners who are working on client matters every month.

There is a real-time view on what that partner’s compensation will be for the [next] year, for the next month versus the next partnership distribution. [Then] getting all of those systems to talk to one another [including] the legal [practice management] platform, event-the based algorithm, and then of course, the backend accounting system—[it] is a pretty big list.

So this algorithm is proprietary to you, and trained on your attorneys’ data?

Ferdinand: Yes. It feeds our accounting system. On an hour to hour basis, [as] payments are being processed when the client pays on an ACH wire or a cheque, every hour on the hour that those payments are processed, any of our partners can go right into that system and they see the needle in a beautiful graphic in a pie chart [or] in a vertical graph… exactly how much they are being paid. This is the first time in my career, [and] I’ve been multiple law firms… that I’m able to see that functionality and transparency in that regard.

Why did you decide to build the tool rather than buying it off the shelf?

Ferdinand: We did a little bit of both. So we purchased a product that off the shelf and we hired a coder that helped build that product… to make it bespoke to [our needs]. And that’s something that we’re still doing even today. Because when we see what could be viewed as a pain point—that takes two clicks of a button, but maybe that could be automated and be no clicks. Or maybe that could be one click instead of two. That’s what [Pierson] and I had promised our partners.