Remember Venture Law Group, or VLG? I studied this firm for one of my first articles about law firms, mostly in Northern California, that took equity interests in their start-up clients -- VLG basically made equity positions in clients its business model. (At the end of 1999, VLG held IPO client equity worth $62 million, split among a small number of partners.) Well, unfortunately the technology bubble burst and took VLG with it; eventually, a group of VLG attorneys would merge with Heller Ehrman. I was critical of the VLG model, but its founders were very entrepreneurial and saw a definite opportunity to grow revenues and attract talent.
Now Craig Johnson, the founder of VLG is on to the next big thing in law firm practice: the virtual law firm. (Law.com story here.) Johnson's new firm is VLP, or Virtual Law Partners. First, the name reflects one of the most intriguing characteristic of the firm -- there are no associates. Everyone is a partner. There is no leverage, no pyramid. Everyone sets their own rates and keeps 85% of the billings. There are very specialized paralegals. So, is this just a fancy, online version of the amalgamation of solo practitioners in a downtown office with one receptionist who answers "Law offices"? Well, it depends on who joins VLP and what kind of work they do.
The firm says that they will "target all types of companies for all types of legal work aside from litigation." Hmm. Can a firm do IPO work or merger work or securities disclosure work without associates? Would one partner do the whole transaction, or would the partners join in on the deal? The firm also said it was focusing on attorneys who would like work-life balance and are willing to not make "a million dollars a year." I would assume those criteria create a very large pool. (Add to that persons who would prefer not to have a California-style commute or the real estate bill to live close to Palo Alto.) The website says that all of their partners are experienced attorneys from top law schools and top law firms. Here is a list of the attorneys -- many also have start-up experience. The website also says that attorneys there would make more than at a traditional law firm.
VLG was very successful, at least for awhile, because it focused on certain kinds of clients -- technology clients, start-ups, people with a different mindset than general counsels of traditional firms. I would expect that certain types of clients, probably the same types, would be attracted by this low overhead model. It also seeks to attract a certain kind of attorney -- it touts "more fun" and "retreat homes" in desirable locations free of charge. We'll see how it goes!
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