James Fisher Discusses his Cloud-Based Model, Leveraging Technology and Talent and Training Young Lawyers
Interview with James Fisher Managing Partner of FisherBroyles
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Here’s some highlights of my interview with James:
“It took us about 12 years to go from 6 lawyers to 100 and then it took us less than 2 years to go from 100 to 200.”
“We leverage technology and talent rather than young lawyers and tall buildings.”
“We think billing quotas are a direct conflict with the client, so we don’t have them. Our emphasis isn’t on how much we can bill a client in a given month or a given period, our emphasis is placed on how long we can keep the client. “
“I believe that eventually lawyers are going to be trained more like doctors. They’re going to get a lot more training in a shorter period of time and for a lot less salary starting out.”
“Blockchain technology is going to help with streamlining lots of processes that are redundant that can be handled by smart contracts.”
“We’re a lot like Amazon in that we are providing the same or better product than the brick and mortar stores, but we just found an easier and more efficient way to deliver it, which allows us to compensate the people that are producing the product more and at the same time charge our customers less.”
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Links referred to in this episode:
Can Cloud based Firms Rival the Traditional Model? by the National Law Review
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Hello listeners, this is Chris Batz, your host of the Law Firm Leadership podcast. As a reminder, the transcript of this audio will be available to read or download at www.LionGroupRecruiting.com/podcast.
If you haven’t done so, please leave a review on iTunes. Finally, in the show notes of your device, I provided links to the subjects mentioned in this episode and a link to the transcribed audio.
As many of you know, we interview corporate defense law firm leaders, partners, general counsels and legal consultants. You’re listening to Episode Number Thirteen of the Law Firm Leadership podcast.
Chris: Welcome to the Law Firm Leadership podcast, I’m your host, Chris Batz with The Lion Group.
Today I have the pleasure of speaking with James Fisher, founder and managing partner of FisherBroyles. As managing partner, James oversees the fastest growing cloud-based U.S. law firm of 200 attorneys in 22 offices across the country. Prior to starting FisherBroyles, James was a domestic and international technology transactions attorney for Baker & McKenzie, Holland & Knight and a couple of other firms. He has negotiated deals involving Latin America, Europe, the Pacific Rim, Asia, and the Middle East. James received his LLM from the University of Houston and JD from the University of Oklahoma College of Law.
Welcome, James, to the Law Firm Leadership podcast. It’s a pleasure to have you on the show.
James: Thanks Chris. I appreciate you having me.
The Genesis of a Cloud based Virtual Law Firm
Chris: Yeah. James, I know that you’re real busy, so I appreciate you making some time. I wanted to give you the opportunity to explain to my audience how this began because what you’ve got going on is truly fascinating to the legal industry and many people may have never heard of your firm or about either cloud-based law firms, law firm 2.0, new law, so can you give us some history?
James: Sure. Back in 2002 my cofounding partner, Kevin Broyles, and I used to work for a large technology firm in Atlanta during the internet boom, so we were there when the internet boom came and we were there when the internet bust arrived around 2002 as well. And the law firm we were working for had this model representing lots of startups, helping them get financed through private equity and venture capital and then we would basically spend that capital on legal fees.
And when the VC money kind of dried up, the law firm didn’t really change its business model and we saw firsthand the inefficiencies and the lack of business acumen that the traditional law firm has. So he and I put our heads together and came up with a business plan to basically exploit these inefficiencies and we came up with a model that sort of removes all the things that clients hate about traditional law firms and at the same time removed all the things that the lawyers hate about traditional law firms. And we tried to come up with a model that aligns the interests of both the clients and the attorneys in the law firm together to create a new model. But equally what we did is removed overhead that doesn’t add value to the client. And the first cloud-based law firm was born back in 2002. We’ve been going at it strong now for 16 years. It’s like we’re a 16-year overnight success.
Chris: It’s fun to see the critical mass that you guys have achieved. Tell me about that growth. Tell us a little bit about where you guys started seeing momentum inside the firm or when?
James: It took us about say 12 years to go from 6 lawyers to 100 and then it took us less than 2 years to go from 100 to 200. It’s sort of a hockey stick growth, which hindsight being 20/20 makes sense. It really does take a long time to convince a bunch of high-quality lawyers that really aren’t entrepreneurial by nature to leave what they’re used to to try something new and innovative like what we created, but as time goes on more and more attorneys buy into the model and 2 equals 4, 4 equals 16, and so on and so forth and then the growth becomes exponential.
And once you get large enough not only do your clients become more comfortable with the model, the legal market in general becomes more comfortable with the model and it just kind of feeds on itself. And we’ve reached that point now where we’ve proven our legitimacy, not only in terms of our size, but in terms of imitation in the market place with other firms trying to do what we do and our client list rivals that of any Am Law 200 law firm. As a matter of fact, we’re to the point now where we anticipate breaking into the Am Law 200 sometime in 2018, which will be a huge disruptive element to the legal industry. We’re the first non-traditional firm to do that. And we’re really excited about that.
The Pillars of Law Firm 2.0
Chris: Definitely something to be excited about seeing that growth and seeing how it’s been exponential lately. James, would you take a moment and explain kind of the different pillars that make up the unique model that you guys are doing?
James: Yes. In the traditional law firm model a lot of emphasis is on leveraging young associates that are paid large salaries. Emphasis is also on lots of overhead that doesn’t add value to client, like we call it ivory towers, mahogany desks, expensive artwork, and redundant support staff, none of which really adds any incremental value to the client, but the client pays for that. And once you eliminate those things or drastically reduce those things, it leaves a lot more capital to be shifted to other areas, like maybe paying your lawyers more and charging your clients less. And that model has been very successful for us. Now, we like to say, we leverage technology and talent rather than young lawyers and tall buildings. So most of our expenses, as much as possible, is kept on a variable cost basis, so our expenses ebb and flow with our revenue.
Chris: Tell me about where do you see this firm going? Is there a celling to what you guys are doing?
James: The technology and the model itself is saleable, for sure. We’re currently in 22 offices nationwide. I say offices that are variable-cost offices. And we’re in that 200 lawyer range. I never really know exactly how many lawyers we have because it’s a moving target because we’re growing so fast. I see us being in the 300 range some time in 2018/2019. I see us expanding into European and Asian markets near future. How many lawyers? Really the limit is, we’re only limited by how we can manage, internally, managing that many lawyers within a firm, so it’s not really a function of technology of the model; it’s more of a function of human resources. You may see us being a 500 lawyer law firm in the next three years, something like that.
Chris: Yeah, that’s tremendous growth. Now with you mentioning some of the tenants of the model that does not have the extensive overhead with regards to real estate and staff or even young associates, I mean that definitely would provide lots of flexibility and benefits to the platform and the attorneys and push those benefits down to the clients I assume. Tell me about some of the cons though of maybe, if there is any, being a part of a platform like this.
James: Most of the cons can be addressed in some way, but I’ll give you a couple of cons that are maybe jump to the minds of people who are normally used to working in traditional law firms. You can’t walk down a hall and talk to somebody. I guess some people might think that’s a con or you’re not in an office space, or you can’t push the button and have a word processing department type something for you, but that’s not really how the younger generations practice law anymore. Frankly, it wasn’t foreign to me because when I used work for Baker & McKenzie, most of the lawyers I worked with on a day-to-day basis weren’t even in the same country, let alone the same office. So a con I guess is if you need face-to-face human interaction every day, you’re not going to get that, but that doesn’t seem to be a huge con for us because, like I said, another thing I remember being in a big law firm was there wasn’t a whole lot of time for face-to-face interaction because I was worried about making my 2,000 hours a year, which those kind of issues don’t exist at FisherBroyles.
Another con you need to be more self-reliant or at least be, the concept of self-reliance is more exposed within our model. A lot of people think that if you don’t generate business in or you don’t have to generate business necessarily at a big law firm, which is a myth because if you’re not being profitable to the firm, you’re eventually going to get laid off. At FisherBroyles, profitability is more internalized. It’s like you need to develop business or be good at marketing internally or externally or you don’t make money because it’s an eat-what-you-kill model. I guess that could be viewed as a con. To most people, it’s actually not a con, it’s a pro because it gives them a lot more upside. Other than that I can’t really think of any other cons.
Chris: That’s sufficient. I just wanted to kind of bring that because I want to start talking about some of the pros. Now, you said something I want to just go after, which was you hinted towards that billable hour requirements are not a thing inside FisherBroyles. Is that correct?
No Billable Hour Requirement
James: That’s correct. Well, yeah, of course. First of all, we think billing quotas are a direct conflict with the client, so we don’t have them. Our emphasis isn’t on how much we can bill a client in a given month or a given period, our emphasis is placed on how long we can keep the client. And pressuring lawyers to make, bill a certain amount is inconsistent what we think client service should be. And we’d rather maintain the client in the long term rather than trying to squeeze something out of them in the short term so that’s something we don’t believe in.
Chris: That’s huge.
Manage Your Own Bill Rate
James: Another tenant we – yeah – another tenant, another thing that makes it different is we don’t come to our attorneys every year and say, “Hey, it’s time for you to raise your rates on your clients,” because, frankly, I’m not in a position to know what the best rate for that particular client is. And we feel like the person most appropriate for making that decision would be the lawyer who owns that relationship. And so we allow our partners to basically, within certain parameters, manage their own billing rates.
Earn More and Charge Clients Less
Basically, the difference between big law, or I say old law because we’re not becoming big law too, is that the attorneys that work for big law are – excuse me again, old law – typically earn about 30% or less in the revenue they generate for the firm. Well, FisherBroyles pays 80% of the revenue that a particular lawyer bills to the client and collects, so it’s a dramatic difference. We don’t require – we haven’t billing quotas. We let them control their rate. So it really opens up an enormous amount of freedom to the individual lawyer to basically earn more and still charge their clients less. And that really, really resonates with clients, especially because they know that they have a more personal relationship with their attorney and the relationship is being viewed on a long-term basis rather than a short-term gain.
Chris: Yeah, that’s tremendous. I love the alignment of addressing and meeting client needs versus just looking after the firm finances. Something else though I think I’d love for you to speak up about, James, is you guys have a minimum year requirement of bringing attorneys on the platform. Tell me more about that.
Minimum 7 Years Experience Required
James: Well, yeah. A lot is historical. Our minimum requirement is seven years and a material portion of that seven years had to have been at a traditional big law firm where they receive big law training because that’s important. We don’t hire any untrained attorneys that cannot work independently, so our clients are receiving partner-level work and there’s no sort of on the job training on a client’s dime at all.
But historically, over the years, that seven years is kind of funny because it’s never really seven years; it’s usually ten, fifteen, twenty years out because there’s also a minimum portable business requirement at this time, which is 300,000 dollars a year. And a lot of seventh-year attorneys don’t have that amount of portable business. But, again, another thing that distinguishes us from old law is that a client’s never going to receive a bill from us that says review of so-and-so associate’s work, so there’s no layered billings. There’s no management charges for work that’s being performed by lawyers because each of our lawyers works independently because they’ve been trained and have the experience to do so.
Future of Attorney Training
Chris: And you bring up a good point and I just want to focus in on something we talked before we started recording, which was the legal industry, specifically the law firm industry of training young lawyers. They graduate from law school and, as you put it, old law is training these young lawyers, but you see maybe something different coming down the pike or you want to approach it differently. Can you talk about that?
James: Yeah. I’ve always thought it was kind of strange how lawyers or how people become lawyers. I mean, you get your undergraduate degree, which has nothing to do with practicing law and you take your LSAT, which has nothing to do with law school, and then you go to law school, which really doesn’t have a whole lot to do with taking the Bar Exam. Then you take the Bar Exam, that doesn’t have anything to do with practicing law. And then you go work for a big law firm and you sort of train haphazardly by doing things here and there and watching others and sort of an abbreviated – I shouldn’t say abbreviated – sort of a weird apprenticeship, but because you’re being paid so much or because the cost of keeping you is so high, you’re unable to do a lot of the things that would give you more meaningful training in a shorter period of time. And over the years, competition for the best students has blown up to the point where every law firm thinks they need to compete with Cravath and pay their first-year lawyers 180,000 dollars a year. Well, that 180,000 dollars a year is being pushed down to the rates which are being paid by the clients and clients are revolting big time.
So I believe that eventually, lawyers are going to be trained more like doctors. They’re going to get a lot more training in a shorter period of time and for a lot less salary starting out. But, in the end, it’s going to benefit them because they’re going to become more skilled in a shorter period of time and their earnings will eventually catch up. It’s going to have to because clients are refusing to pay for it. There’s been lots of articles really lately, as a matter of fact, talking about how clients are revolting against big law on these – charging for first and second-year lawyers being billed to their time files. I think that’s in our future. Lawyers are going to be trained differently in the future I firmly believe.
The Next Wave in Legal Innovation
Chris: Yeah, that’s exciting and I appreciate your insight into that. Tell me about this. We had talked a little bit about, before the recording, about technology in the legal industry and you brought up blockchain technology. Can you speak to that as it relates to either, I know you guys have grown in that space for client need, but maybe also how that applies to a firm?
James: Legal tech is a very exciting space these days. And with the advent of the blockchain technology, the smart contracts specifically, I think that’s going to be the next wave, I firmly believe that’s going to be the next wave, in legal innovation. And a lot of folks are out there trying to develop technology to help law firms, that coupled with artificial intelligence. We’re in the very beginning stages of it, but I think that’s the future of practicing law, excuse me, the future of the legal industry and the way law is going to be practiced along with more cloud-based distributed law firm partnerships like FisherBroyles. The two just go together like hand and glove.
And for that reason we’ve recently announced a Blockchain FinTech practice group along with sort of an informal think tank that is helping to shape the way blockchain technology is going to be applied to the legal industry. And we just, in fact I know we’re the first non-traditional law firm to be among a small group of elite traditional old law firms to be part of the legal group that’s associated with the Enterprise Ethereum Alliance. We’ll have a press release about that probably the next couple days. But I think that’s also the wave of the future.
Blockchain technology is going to help with streamlining lots of processes that are redundant that can be handled by smart contracts. Blockchain technology has the ability to also make things more secure, data privacy, data security, the whole nine yards, all these things that we’re seeing in the news these days that are causing havoc in the market place. You guys may recall very recently the data breach that happened at Equifax, that kind of thing, right? Those kinds of thing can be, I think, solved through blockchain technology in the future.
Chris: Truly fascinating and I appreciate, James, sharing that. I think it’s going to be fun to see how that unfolds. Yeah, I appreciate you sharing that insight. We have been watching Amazon doing very disruptive things in the world economy, the U.S. economy. And before we started this recording you had mentioned kind of an analogy related to Amazon. I’d love for you to share that again.
The Amazon.com of Law Firms
James: Well, I was being interviewed one time and it just popped in my head one time. I said we’re sort of the Amazon.com of law firms. And I meant it this way, at the time we sort of grew under the radar for 16 years purposely to grab market shares so that when people finally figured out that this is a viable model, we’d be so far ahead of everybody else, we’d be kind of hard to compete with. And then as time went on the analogy kind of grew into the comparison between what we do and Amazon does with respect to cloud-based technology versus brick and mortar.
And we’re a lot like Amazon in that we are providing the same or better product than the brick and mortar stores, but we just found an easier and more efficient way to deliver it, which allows us to compensate the people that are producing the product more and at the same time charge our customers less because, just as with Amazon and what Amazon has proven, is that the brick and mortar isn’t what’s really important to the process. It’s just as a customer who’s buying a product from Amazon versus Wal-Mart is wanting the same high quality product, we can deliver the same high quality legal product without the brick and mortar. At the end of the day, a law firm client really only wants to pay for what’s between our ears and that’s what we’re trying to provide.
Life of a Managing Partner
Chris: Yeah. James, want to shift to your role in the firm. Are you still practicing law?
James: I practice law very little now. Unfortunately, I have so many other responsibilities along with my cofounding partner. He and I with a number of what we call lieutenants or office level managers runs 200-lawyer-range law firm. My role is cofounder/co-managing partner along with Kevin and we administer and run the day-to-day operation of FisherBroyles, along with our office level managers and that clears all the back office administration, is the development, recruiting, all the things that go into running a law firm and all the administrative staff.
Chris: Do you miss doing the tech transactions you did?
James: I do, but I never really escape it because if I’m not – these days I may not be practicing law for clients, but I’m practicing law for the firm, so to speak, right? So I can never really escape it. And, yeah, it’s exciting, especially with, like I said, the new blockchain technology and all the exciting things are happening with ICOs and all the regulation that I know the SECs going to come down with with the regulation of initial coin offerings and all the securities regulations that are going to arise from that. It’s exciting stuff and whether I’m doing it for clients or I’m helping evaluate and analyze those issues along with our general counsel, it’s all exciting.
I mean, then I get the best of both worlds. I get to help folks share the vision of FisherBroyles. I get to help grow FisherBroyles. And I have the luxury of being able to try and shape the legal industry. And the most rewarding thing about it is I get to help people provide for their families in a meaningful way. I mean, the best thing about FisherBroyles is not necessarily that we’re changing the legal industry, but we’re bucking the trend of what has been an industry full of unhappy lawyers and unhappy clients for that matter.
Chris: Yeah, truly. Well, let’s shift into some more personal questions. James, how are you spending your spare time these days?
James: Well, what spare time I have is devoted almost exclusively to my family and travel. Travel is kind of my hobby. And a lot of my travel is work related, as can be expected. Usually you find me every other weekend in an airplane at 35,000 feet on my way to some kind of recruiting meeting or business development meeting. And then when I have, when I can get away, I like to travel for fun. I never really seem to be able to escape. I’m always working. I don’t say that in a bad way. I enjoy it. I enjoy what I do. I enjoy building this firm with my partner. It’s just been a great ride and we see it continuing long into the future.
Chris: Where have you traveled lately that you really enjoy?
James: Oh my gosh, I just got back from a cruise in Greece. I went to a bunch of Greek islands.
James: Including Lesbos, I saw Syrian refuges and all kinds of interesting things. Greece is a beautiful country. That’s the last major trip I’ve taken. But I don’t have anything on the books for any time soon, other than work-related stuff. But, again, I like to travel.
I like what I do. I like FisherBroyles. I like travelling for FisherBroyles. I like talking to people about the model. I like the recruiting process. I like to provide an avenue for lawyers that are unhappy in the practice of law and showing that there’s a better way to do it. I love telling clients this is not the only way. Big law is not the only way. You can have the same or better lawyer delivered in the same manner for less than it would cost you for a third- or fourth-year at the traditional big law firm where you’ve been sending your work.
And honestly, a lot of time the biggest objection or the biggest barrier we have to answer is convincing folks that it’s not too good to be true. It says a lot about what you’re doing when I can look somebody in the eye, whether it be a perspective client or perspective candidate, and say, “Listen, if you don’t believe me, go to our website and just pick anybody in the firm and just call them up and ask them.” And that’s, anybody will endorse it. We’re really proud of that.
Chris: And James, just kind of a last question. If you weren’t doing what you’re doing now, if you weren’t a lawyer and if you weren’t providing leadership to FisherBroyles, what else would you be doing?
James: You know, I’ve often thought about that. I would probably be an investment banker or a legal recruiter.
Chris: That’s fascinating, so you enjoy the transaction and bringing people together?
James: Yeah, absolutely. I love coming up with a business idea and sharing it with folks and getting buy in on the project. And those elements are all in investment banking private equity or legal recruiting as well.
Chris: That’s excellent.
James: But for me, personally, legal recruiting would be difficult for me unless I was recruiting for a law firm 2.0 law firm.
James: It would be hard for me to recruit now for a traditional law firm.
Chris: Yeah. James, it’s been an honor and a pleasure. Thank you for your time today.
James: Right. Great. Thanks for having me.
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