I spent over five years of my career at Greenberg Traurig, LLP, a law firm of about 1,750 attorneys. Pretty big. Other large firms are content to maintain a smaller attorney count and grow only organically, not through lateral partner hires or mergers.
I live in the quaint seaside town of Port Washington, Long Island (at least, it’s as quaint as is possible 20 miles from Manhattan). Local residents have, in the past year or so, been much more likely to see me around town running errands during normal business hours than in the past. This is because my law firm is gradually morphing towards becoming a so-called virtual law firm. When I started the firm in 2010, I set up my office on 5th Avenue and 46th Street, and dutifully commuted in every day (75 minutes door-to-door each way, at best, notwithstanding the puffery of the real estate agents who will tell you only how long it takes for the train to get to Penn Station, which never happens on time anyway).
As my firm’s workload and breadth of practice has increased, I’ve been bringing in attorneys and other law firms on a contract basis to help. I don’t have the space at 5th Avenue to physically house these people, and my primary go-to contract attorney spends most of the year in Andalucía, Spain (now that would be a commute). So these attorneys do their work from wherever they want to work. The fact that they are not physically present has almost no practical effect on how we work together, which is done primarily via email and phone.
Observing the ease of these virtual relationships, I started to question why I was trudging into the city myself. Of course, I’m the face of my firm and therefore need to meet with clients from time to time. Nevertheless, 95% of what I do is email, phone calls and review of Word documents, which can be done anywhere with an Internet connection. Accordingly, I’ve been working mostly from home lately, though I often come in for meetings, in one of the conference rooms at 5th Avenue or elsewhere, as needed. This required a couple of technological adjustments – using cloud computing for my documents and email and call forwarding for calls that come into Manhattan – which has been seamless. All the time I save on commuting gives me that much more time to devote to my work and has made me much more productive overall.
It will be interesting to see whether my arrangement becomes the norm for how law is practiced in the future, particularly for areas of the law, like corporate, that are less likely to require physical presence somewhere at a particular time. It clearly works well for firms like mine – experienced lawyers working with a network of other experienced lawyers. Time will tell whether it could potentially work for the big firm setup, where young attorneys are being trained by mentors.
I’ve always simultaneously been impressed and confused by attorneys who maintain massive paper form files of each major type of agreement that they are commonly asked to draft. Impressed because this involves some discipline in thinking past just getting the current deal done, but confused because of the impracticality of this approach. If, for example, you’re looking to insert a shotgun buy-sell provision in an operating agreement between two 50/50 partners, it’s not the most efficient use of your time to thumb your way through your form file of 157 operating agreements to find the one or two that had that provision. If you have the ability to electronically search for keywords within your Word documents, that can sometimes be a quicker way to locate that odd provision, but only when there are unusual words or phrases involved.
Another approach is to have a single form agreement that incorporates most of the possible alternative provisions that you could reasonably expect to see. This is the approach taken by the NVCA open source venture forms. While this solves the problem of being able to locate provisions you need, it is incredibly labor-intensive to put this kind of form together and keep it updated.
An alternative approach is to abandon the idea of form agreements and instead develop a checklist for each type of agreement you’re drafting. For example, if you had a checklist for an LLC operating agreement, there would be a section dealing with how the company would be managed. You could have a series of questions like whether the company is member- or manager-managed, whether passive investors have any “major decision” veto rights and whether a board of managers required unanimity for any decisions. Then, instead of presenting the applicable provision right there in the checklist, you’d just list the agreements you’ve done in the past that contains the applicable provision and note the section number. A checklist like this takes a relatively small amount time to update for each new agreement, and you have the immediate ability to locate that obscure provision.
The payment of legal fees by issuing stock or other equity to the law firm in lieu of cash became popular in the late 1990s with Silicon Valley startups and has gone in and out of fashion since then. The appeal of the structure, particularly with startups, is obvious. Before these companies start generating revenue, the cost of capital is high, so it may be better to hold off on raising funds to pay service providers like attorneys and instead compensate them, at least initially, with equity. It is also common now to have hybrid structures where, for example, the law firm is granted a small piece of equity issued in exchange for the firm’s agreement to discount fees and defer their payment for a period.