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Virtual Firms Are Rapidly Expanding. What Kind of Lawyers Do They Want?

By Dan Pickel for

After a year away from the office, an increasing number of attorneys are curious about the prospect of taking their practice to a virtual platform. But leaders at these “distributed” firms say their model isn’t a fit for everyone.

FisherBroyles, the largest firm in this category, has added 52 new partners since March 2020. Rimôn counted 40 new attorneys in 2020. And hybrid firm Taylor English & Duma has brought on 18 remote partners since the start of 2020. Amid their rapid growth, however, these firms are still being discerning about whom they welcome aboard.

“The uninteresting answer is we’re like any other Am Law 200 firm; we’re looking for great lawyers,” said FisherBroyles managing partner James Fisher, who’s hopeful his firm’s $105.2 million in revenue from 2020 will place it in the rankings for the first time. “The unique thing we’re looking for is not only great lawyers, but also a sense of entrepreneurship.”

That sentiment is shared at Rimôn and Taylor English, and it’s a sign that the priorities at these firms match those of the highest-performing traditional firms in the United States. The distributed business model doesn’t have a place for lawyers who can’t bring in their own work. And there’s no nonequity tier in which to stash underproducers or service partners.

“An individual who succeeds at Skadden Arps as an equity partner is someone who’s going to succeed in our model as well,” Taylor English partner Chris Wilson said.

Granted, the average compensation for partners at virtual firms can’t match the $3.9 million profits per equity partner that Skadden posted in 2019. Fisher said his firm is particularly appealing for lawyers with a book of business between $500,000 and $1.5 million, who don’t necessarily attract the attention of top headhunters but can dramatically increase their take-home pay by shedding the extraneous costs shouldered by a traditional firm.

Yet top-earning partners at the firm have hit the $4 million mark. With a compensation formula ensuring attorneys hold onto 80% of the fees they bring in, it’s a taut line connecting business development and take-home pay.

At Rimôn, where the compensation model is also directly tied to collections, the calculus is similar.

“They need to have their own book of business,” said managing partner Michael Moradzadeh.  “They need to have enough so that they’ll be happy here and stay here.”

But Moradzadeh doesn’t want a firm full of lone wolves. His goal is to ensure that every attorney the firm brings in is working with at least three others to service clients.

“We don’t want to have silos,” he said. “They need to rely on other specialists.”

An appetite for risk is also important, even though it’s rare in lawyers. If the upside in a virtual firm is higher when partners have especially productive years, that also means there’s less cushion when work dries up. After all, no one is collecting a guaranteed draw.

“Most attorneys are very good at identifying risk. But in assessing and assuming risk, attorneys are horrendous,” Wilson said. “If you could come up with a test early on that would determine attorneys’ ability to do this, I’d love that. People will tell you they can, but it isn’t until the decision has to be made about going to join the firm or not join the firm. Then you figure out whether they can assume that risk.”

Judging the Fit

At Rimôn, Moradzadeh interviews every attorney who’s thinking seriously about joining the firm. But he finds that objective metrics are generally more telling about a lawyer’s potential fit.

He looks at how often a lawyer has moved, along with their past billings and what other attorneys they’ve brought onto matters. Clients are crucial, too—not just who they are, but how long a lawyer has worked with them and whether the work is sophisticated or “cookie cutter.”

“That tells me so much about the lawyer,” Moradzadeh said.

For Wilson, interviews are particularly helpful for determining an attorney’s comfort level in the virtual environment. A key part of that is how they feel about technology. 

“You’re not just walking in the door,” Wilson said. “There’s a little more that you need to do on your own.”

But the demands aren’t onerous. Lawyers at virtual firms don’t need to command multiple programming languages, but they do need to be able to use videoconferencing software and troubleshoot minor technical issues in the absence of an onsite help desk.

“They don’t have to be geeks. That’s a misperception that people have shed because of COVID,” Moradzadeh said. “We don’t believe in bells-and-whistles technology. It’s the same tools people use to communicate with their grandparents.”

Virtual firms aren’t uniform in how they approach technology. While Rimôn sends new attorneys a laptop, at Taylor English the expectation is that a remote attorney will purchase her own and then work remotely with the firm’s IT department to set it up.

 High Leverage Challenges

Not every type of practice will necessarily thrive on a virtual platform. Wilson believes it depends on how a lawyer has historically done their work.

Take a practice like insurance defense, which often depends on many young attorneys billing many hours at low rates. Or a labor and employment practice servicing a client with locations across the country.

“Virtual firms aren’t really set up that way,” Wilson said. “We have 30 or so associates at our firm. That’s not enough to support a highly leveraged practice that involves lots of attorneys, unless you’re bringing them with you.”

The logistical challenge of moving a team of associates can be more easily solved by joining another large firm, rather than a virtual firm. But if this is disqualifying for some, these leaders are still betting there are plenty of other attorneys who don’t need the trappings of Big Law, from the armies of associates to the marble lobbies.

“We don’t have to raise billing rates every year,” Fisher said. “We’re looking for people frustrated by the handcuffs traditional law firms put on them and are looking to break out and fulfill their own destiny.”