A new firm focused on employment law for management, McFadden, White, Sprattlin & Davis, has sprung up to offer big-firm experience at lower rates at a time when employment law is under increasing cost pressure.
The four founders, all African-American women, started out practicing at large firms in Atlanta.
Jamala McFadden spent more than nine years at Sutherland, Asbill & Brennan, where she was counsel. Her desire to start her own firm, McFadden Law, which she did in February, was the impetus for the new firm.
Two of the other founders, Joy White and Nancy Sprattlin, already had their own firms.
White started White Legal Group three years ago, after five years at King & Spalding. Sprattlin launched Sprattlin Castor two years ago after working at Greenberg Traurig for almost six years and before that, Wilson Elser in New York, another large national firm.
"I learned Jamala was starting her own firm," said White, "and Nancy and I talked to her about starting a firm together, since we had similar backgrounds and were doing the same kind of work."
McFadden was planning to partner with Chandra Davis, the fourth founder, who'd been a friend since they met in law school at the University of Michigan more than a decade ago.
Davis had been a trial attorney at the Equal Employment Opportunity Commission since 2009 and before that was an associate at McGuireWoods.
The four decided to start a firm together, signing the partnership agreement in June.
McFadden said there are numerous employment lawyers practicing as solos or as duos. "With four lawyers, there is a difference in the work you can acquire," she said.
Sprattlin pointed out that the four-partner firm is about the same size as the employment law practices at the Atlanta offices of large firms. She said that when she worked at Greenberg Traurig, the labor and employment group had a partner and three associates.
There is a lot of price pressure on employment law, particularly for the defense of single-plaintiff suits and more routine work, McFadden said. Increasingly, companies carry employment practices liability insurance (EPLI), so an insurance company is going to be paying the lawyers.
She said EPLI can cover wrongful termination, sexual harassment, discrimination and workplace torts.
"Companies are deciding that it is not feasible to pay big law $400 per hour to defend against a race discrimination claim brought by an employee who earned $40,000 per year. The math doesn't make sense," McFadden said.
Insurance companies pay in the $200 range or lower to defend employment claims, she said, less than the hourly rate for a first-year lawyer at many large firms.
"Big law rate structures don't work for the run-of-the-mill employment law claims—firms and clients recognize that fact," she said.
The McFadden, White, Sprattlin & Davis partners are charging $300 per hour. McFadden said their size allows them to be flexible about fee structures, offering alternative fee arrangements for specific projects, for instance—and pointed out that an experienced partner is handling the work, not a junior associate.
The partners are in their mid-30s to mid-40s. All four are mothers, with eight children between them, ranging in age from eight months old to 21. "We have a lot of people depending on us," Davis said with a smile.
They have opened a downtown office at One Ninety One Peachtree Tower, but they said having their own firm allows them flexibility to work from home or around their children's schedules.
McFadden, White, Sprattlin & Davis is handling all types of employment law for management, including litigation, counseling and compliance. The four partners also have their own areas of interest.
McFadden has handled transactional matters, such as due diligence for employment issues when a company is acquiring another, and audits of human resources departments' practices.
White, who did some plaintiffs' work while in solo practice, handles internal investigations and negotiates severance packages for executives.
Sprattlin handles internal investigations, HR audits and risk assessments for reduction-in-force plans.
Davis has an interest in training company executives in sound employment practices, something she spent a lot of time doing at the EEOC in addition to her trial work.
The four said most of their clients come from referrals from other lawyers.
McFadden declined to name clients without permission but said the firm is targeting companies with 20 or more employees across the spectrum of employment work.
Sprattlin said she's worked with restaurants, retail companies, hotels, manufacturers and trucking companies. She and White have worked with doctors' groups on employment agreements. McFadden has worked with insurance agencies and small business owners as well as an outsourcing company. Davis is handling work for a company supplying software to car manufacturers.