San Diego lawyer launches all-female, all-partner virtual firm
The fledgling virtual firm Vanst Law in San Diego has no office, no break room and no conference room of its own—so the partners get creative about finding ways to stay collegial. “Our firm culture is extremely important to us. We can’t meet at the watercooler, but isolation isn’t a problem,” says founder and CEO Cynthia Morgan-Reed.
Instead, the five women who currently comprise the partnership roster make a point of assembling at local events. There are meetings of the Lawyers Club of San Diego, an all-female bar association. There’s Equality California’s annual awards dinner, where one of the partners hosts a table. When the firm onboards a new partner, as it has every other month or so since Morgan-Reed opened the virtual doors in September 2018, members gather for a welcome session, sometimes at Enrich, a coworking space for solo and small-firm lawyers.
Morgan-Reed planned it that way when she transitioned from her solo practice last year. Earlier, she had spent 12 years in traditional firms not her own, and she was fed up with the pay disparities, the structural rigidities and the misogyny, she says. Why the name? “Vanst” is a mashup of the first letters of Morgan-Reed’s children’s names, Vaughn and Stella, with an “n” in the middle for “and.” Plus, it sounds like “advanced,” Morgan-Reed points out.
Indeed, one of her goals was to create an innovative, forward-thinking firm. So she created a software-connected work-from-home firm where everyone’s a partner and all receive 70% of what they collect on their own clients. Thirty percent goes to overhead and compensation for Morgan-Reed and her chief operating officer, tax attorney Allison Soares. New partners must arrive with a $250,000 book of business, but once at the firm, they can set their own rates and monthly schedules. As Morgan-Reed puts it on the firm’s website, there are “no long commutes to an office, no face time, no office politics. We lower our carbon footprint and increase our impact.” The cost savings can be passed on to the client through lower billable rates, she adds.
Partners themselves handle most back-office duties. “They may charge a lower rate or a flat rate for associate-level work,” Morgan-Reed says. “They are also free to hire paralegals or contract attorneys to assist. We leave it to their discretion; they know their needs best.”
The firm’s civil litigator, Jacqueline Vinaccia, uses a paralegal. Morgan-Reed says she’s hiring a planner as an independent contractor to help with her land use work. The firm has an administrator, and the individual partners hire her as each needs help, Morgan-Reed says.
“There’s no black box. We are transparent with our formulas,” Morgan-Reed says. “Our philosophy is based on community and support. We won’t fight over how much each gets of the pie. We don’t want sharp elbows. We’ll just make more pie.”
Law firm strategist Kent Zimmermann of the Zeughauser Group consultancy says a drawback to virtual firms is that they lack the breadth and depth that raise the profiles of traditional firms. He points out that traditional firms also tend to have robust internal referral networks. “Virtual firms seem like a compromise between going solo and going to traditional firms,” he says. “What’s the benefit of keeping 70% of your collections instead of keeping all your earnings? I’m a little skeptical. Why not hang out your own shingle and be friends with other lawyers?”
Morgan-Reed is happy to be out of the conventional law firm system. “Those firms had a culture that a lot of women and men experience with frustration,” she says. “The good old boys are at the top—the equity partners who make all the money but don’t reflect the demographics of their firm. The income partners are in the middle, and the minions slave at the bottom. These are pyramid schemes. I spoke with my feet and left, like a lot of women choose to do.”
In Philadelphia, commercial litigator Nicole Galli founded Women Owned Law in 2016 “to advance women legal entrepreneurs.” According to her, the group has grown to about 200 members in the East, Midwest and South.
“Opening a business is never for the faint of heart, but actually, being a woman opening a firm can be a plus,” Galli says. “You’re not dealing with all the implicit biases. And you get paid what you should.”
Nicole Auerbach, a Chicago lawyer and a veteran of big law firms, agrees. Auerbach, a founder of Valorem Law Group, teamed with Patrick Lamb last year to open ElevateNext, a four-lawyer majority woman-owned firm spun off from law services consultant Elevate. “It’s good marketing to say majority woman-owned, it’s a nice differentiator,” Auerbach says. “It used to be not so commonplace. You felt you needed a man’s name on a firm. No longer.”
Morgan-Reed says she could have remained a solo, busy with the land use and real estate practice she had established. “But I kept hearing the same stories from colleagues and associates at local firms about how they feel disrespected. I heard it all the time: ‘I’m not valued here,’ ” she says. “So I decided to create a model disrupter. I decided to take that pyramid and flatten it. I decided to create a lateral daisy chain, an all-partner firm.”
For the time being, the firm is still all-woman, but Morgan-Reed says she is interviewing men as well. “It would be truly ironic for me to discriminate against men,” she says. “We’d welcome them.”
This article was published in the July-August 2019 ABA Journal magazine with the title "All for One, One for All: Fed up with pay inequities and the ‘boys club’ mentality, a San Diego lawyer launched an all-female, all-partner virtual firm."