Two "virtual" law firms have expanded their footprint outside of the U.S. in recent weeks. Their leaders have high expectations. Does their model really make global growth easier to pull off? Want to weigh in? Email me here. Want this dispatch in your inbox every Thursday? Sign up here.

Virtual Firms Get Their Passports

When you run a "virtual" law firm in the U.S., expansion is easy. Looking to add some new partners? Negotiate the terms, send over the employment documents, give them the passwords to the computer systems, and they're up and running.

Ok, this may be a slight exaggeration. But when attorneys are working out of their own homes, coffee shops, or co-working spaces, you can establish a presence in, say, Boston, without signing the lease and building out an office there.

Expanding to London proved to be a different story for FisherBroyles, the largest virtual firm in the U.S. It's not as if the firm had been able to completely ignore questions of infrastructure to this point. While most of its 250 lawyers work remotely, the firm does have small physical offices in 22 U.S. offices (Boston included).

But in addition to establishing a physical space (in a 36-story tower in the City that's also home to Winston & Strawn and Simpson Thacher & Bartlett), leaders had to jump through a number of unfamiliar regulatory hurdles in London.

"It was a way bigger hassle than I thought it was going to be," managing partner James Fisher told me yesterday.

Before the firm could establish a separate U.K. partnership, it had to resolve transfer pricing issues (governing how the firm moves profits between the two jurisdictions), and Fisher needed to become qualified as a foreign solicitor. In all, the process took a year-and-a-half to complete.

FisherBroyles arrives in a landscape where players are increasingly familiar with legal businesses that don't replicate the traditional law firm model: It's been over a dozen years since the Legal Services Act established Alternative Business Structures licenses, allowing for outside ownership of law firms and multidisciplinary practices. The firm didn't go that direction, however, instead sticking with the traditional law firm partnership model.

The U.K. has some examples of "virtual" partnerships, but Fisher claimed that his firm, with its global reach, would be by far the largest in the market. (Publicly traded Keystone Law, based in London, is also cloud-based and currently has over 300 attorneys.) The goal is to have the reach of an international Am Law 100 firm, but operating on a "distributed" model, where lawyers organize not by geography but by practice area.

"We're trying to be the Shearman & Sterling or Cravath of New Law in the U.S.," Fisher said, noting that the firm's financial services practice in New York made London an obvious first choice for international expansion.

Singapore will likely be the firm's next destination, according to Fisher, but the move into London has created interest from a number of locales: Dubai, Madrid, and Milan, in particular.

"There's all kinds of opportunities falling into our lap based on our work in the U.K.," he said.

FisherBroyles still has a way to expand before it matches the scope of cloud-based peer Rimon. After launching with offices in San Francisco and Tel Aviv in 2008, the firm paused its overseas ambitions for a number of years to expand in the U.S. before jumping into Rome three years ago. With a recent expansion into Dubai, Berlin and Sydney, the firm is now in a total of nine countries, including the U.S.

"Quite frankly, at the time, with the distance and the time difference, it was tough," Rimon CEO Michael Moradzadeh, said of the initial challenges in operating from two cities separated by 10 time zones. "We decided to focus on growing the U.S. side first, then from there, growing further globally."

Now that the firm is several years into the new push, Moradzadeh says the primary challenges in growing a cloud-based firm internationally are the same that he faced growing in the U.S.

"It's tough finding very talented lawyers, with the pedigree, the book of business, who are collegial, entrepreneurial, and want to be part of a cutting-edge law firm," he said. When it comes to the structural side of things, being cloud-based makes it easier. "Attorneys can log in and be a fully-fledged part of the firm instantly."

Moradzadeh did acknowledge the challenges of regulatory compliance in different regimes, dealing in multiple currencies, and general cultural and linguistic differences, but he said that it gets easier each time.

Ease of entry also likely equates to ease of exit. I'll be tracking FisherBroyles and Rimon to see if they continue their international push, or whether there's a quiet retreat in the coming years.

In the News

Bob Ambrogi has been paying attention to legal technology and how its being applied for far longer than I have. That means he has to go to all the major conferences. On Above the Law, he compares his time at Legalweek, Legal Services Corporation's Innovations in Technology conference, and the second Inspire.Legal, presented by the New York Legal Tech Meetup and New York Law School. His concerns? Two of the conferences focus on the wealthiest sectors of the market, and one on the poorest, but none are bringing innovators together across the board.

Monday is Presidents Day; a day off for many, but not the members of the American Bar Association's House of Delegates. On the last day of the ABA's midyear meeting in Austin, they'll be considering a number of resolutions, none more controversial than Resolution 115, which encourages states to consider more innovative approaches to address the access to justice gap. The ABA Journal has a preview here.

And Burford Capital has been absent from this space for several weeks. Let's change that. A Dubai appeals court dealt the litigation finance giant a blow with a ruling earlier this week allowing a $450 million superyacht at the center of London's largest divorce fight to set sail. Burford has funded the ex-wife of a Russian oligarch who's been trying to have the court enforce a British ruling transfering the vessel to her possession. Bloomberg reports that Burford is entitled to as much as 30% of any recovery.

You'll hear from me again next Thursday! Thanks again for reading, and please feel free to reach out to me at [email protected]. Sign up here to receive The Law Firm Disrupted as a weekly email.