Legal structure and compensation algorithm

Pierson Ferdinand launched in January 2024 in what it says was the largest law firm debut in US history - starting with around 130 partners and growing to more than 270 in under two years. In this episode, co-founders Michael Pierson and Joel Ferdinand explain the model behind what they call an “AI-native,” fully distributed, partner-only law firm.

They break down how the structure works: no physical offices, every lawyer signs a partnership agreement, and compensation is decided by a formula-based algorithm that updates in real time. Partners keep a far greater share of their billings than in Big Law, with Michael noting that most lawyers who join “earn 2 to 3x what they were earning” at traditional firms. Pay is completely transparent: every partner can see every other partner’s earnings inside the firm’s internal app.

A big part of the model is technology. The firm mandates firm-wide licences for Harvey AI and uses additional tools across the business to automate both back-office processes and junior-level work - something they say they’ve “replaced almost all of” already. AI is now part of standard workflows: summarising due diligence, producing first drafts, organising deal terms and creating client-ready matrices and charts.

Michael and Joel also discuss their London expansion - already more than 20 fee-earners and growing - and their recruitment pitch: a chance to escape the traditional hierarchy, avoid massive infrastructure costs, and build a practice with more autonomy and more upside. “Happy lawyers make better lawyers,” Joel says. “We’ve been purpose-built for people who want something different.”

Chapters

00:01 Introduction

01:00 Introducing Pierson Ferdinand & the Founders

02:20 How the Firm Launched as the Largest Debut in US History

03:37 Inside the Distributed, Partner-Only Model

04:29 How Partnership, Compensation & the “Pro Algorithm” Work

06:48 Why Remote-First Makes the Economics Work

07:22 Firm vs Partner Clients & How Work Is Shared

08:40 How Matters Are Staffed Without Associates

10:11 Horizontal Integration & Internal Work-Sharing

11:16 The Pitch to Clients: Big-Law Quality at One-Third Less

13:01 The Firm’s AI Strategy - Harvey & Beyond

15:58 Could This Model Work Without AI?

17:13 What Lawyers Want: Frustrations With Traditional Big Law

18:23 London Launch: Practice Areas & Early Momentum

21:14 Competing in London’s Hyper-Competitive Market

22:19 The Pitch to London Laterals

24:17 Can Partners Earn as Much as at Kirkland or Paul Weiss?

27:02 Radical Transparency: Everyone Sees Everyone’s Pay

28:02 The Big Catch - Why This Model Isn’t for Everyone

30:08 Growth Plans for the Next Five Years

31:43 Culture, Community & Why “Happy Lawyers Make Better Lawyers”

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