Four partners from cloud-based law firm FisherBroyles have broken away to start a similarly virtual firm, Culhane Meadows, that one founder, James Meadows, characterized as more of a traditional partnership.

Culhane Meadows already has 22 lawyers, including 16 former FisherBroyles partners, since launching on May 31, Meadows said. The other six lawyers are from other firms.

Like FisherBroyles, Culhane Meadows has strong roots in Atlanta. Half of the firm's lawyers, including Meadows, are here, with another six in Dallas, one in Austin, Texas, and two apiece in New York and Washington.

The new firm, like its parent, is made up solely of partners with big-firm backgrounds and it has no offices, other than leased executive-suite space for meetings.

Culhane Meadows, too, is pitching lower overhead and rates, with the same expertise as Big Law to its corporate clients. The firm similarly offers partners wide latitude in setting rates with no billable hours requirement and no guaranteed draw.

But Meadows said he and the other founders, Kelly Culhane, Heather Haughian and Grant Walsh, want to create a firm that is more of a "true partnership," where lawyers develop a shared roster of institutional clients.

Meadows is the firm's co-managing partner with Culhane, who is in Dallas with Walsh. Culhane is also the Dallas managing partner while Haughian is the Atlanta managing partner, roles which both had at FisherBroyles.

Virtual or cloud-based firms are at one end of the spectrum and traditional Big Law partnerships are at the other, Meadows said. "We want to bring the needle a little back to center," he said.

"Lots of traditional firms are successful with a core group of clients that multiple lawyers support. We do not want to discourage that—we want to go in the other direction and encourage it."

Meadows said the firm has modified the FisherBroyles compensation formula to encourage more collaboration. Lawyers are rewarded for bringing in legal work and for doing it, but he said Culhane Meadows' formula allows more flexibility for origination credit beyond awarding a portion of fees to the originator and another to those who do the work.

"It [the formula] has the ability to recognize contributions other than the first person who brought the client in," Meadows said. "If you get three practice groups doing work for a client, everybody should be better off instead of a reward only to the sole originating attorney. That's the fundamental difference."

"It's more complicated for the back office, but we did not want to sacrifice the ability to build out a larger client for accounting simplicity," he added.

Meadows invoked his favorite Star Wars quote to explain the difference: "The more you tighten your grip, the more star systems will slip through your fingers," Princess Leia tells the commander of the Death Star, Grand Moff Tarkin. In the same way, Meadows said, if a firm is too rigid about the origination credit, it will lose potential work for additional practice areas instead of giving partners in different practices incentives to collaborate.

One of FisherBroyles' founders, Kevin Broyles, said the spinoff of the Culhane Meadows partners is a milestone of sorts for his firm, founded in 2002, signaling its maturation. But he disagreed with Meadows that FisherBroyles' compensation formula does not encourage cross-selling.

When Broyles and another Atlanta lawyer, James Fisher, launched FisherBroyles just over a decade ago, a virtual business law firm trumpeting lower rates than Big Law was a radical concept in the legal marketplace.

The firm, originally called FSB Legal, says it's the first national, cloud-based law firm with "cloud computing" and "cloud commuting."

It has about 65 lawyers after the Culhane Meadows spinoff and has expanded to Charlotte, New York, Dallas, Houston, Austin, Chicago and Palo Alto, Calif.

Broyles said his firm's compensation formula encourages partners to collaborate across practices. Rainmakers make more with the FisherBroyles forumula than at Culhane Meadows, he said, but Fisher­Broyles has always allowed rainmakers flexibility in sharing the origination credit.

"We set up a model that we think incentivizes people to share work, and we think our model does it better," he said.

FisherBroyles is experiencing strong growth in the current market, Broyles said. "We are focusing more on revenue growth than on the number of people," he added.

In the last three weeks FisherBroyles has added two partners in Chicago from DrinkerBiddle and two more in Atlanta—John Graves from Ballard Spahr and Joel Ferdinand from Fox Rothschild. Broyles said his firm is in talks to open offices in Los Angeles and China.

Meadows said he and the other Culhane Meadows founders enjoyed practicing together at FisherBroyles. "We liked the aspects of what FisherBroyles had to offer. They were the innovators 11 years ago. What we are doing is continuing to challenge the status quo and ask: can we do it better?"

Meadows, who handles tech outsourcing, said he and five of his new firm's Atlanta lawyers initially worked together 15 years ago in the tech practice at Alston & Bird.

From there he moved on to Hunton & Williams, then joined FisherBroyles in 2008. At the time he told the Daily Report that he was able to cut his rate from $650 an hour at Hunton to about half that, a major incentive to move.

"I've been able to do more relationship work rather than just one-off deals because my rates are lower," Meadows said. While he enjoys handling big deals, he also likes having a steady workflow.

Meadows said the rate structure at Culhane Meadows will be similar to that at FisherBroyles—roughly half what a similarly qualified lawyer would charge at a large firm.

The Culhane Meadows lawyers in Atlanta will charge in the $300 to $400 range, Meadows said, "and closer to $300 than $400."

"When people ask me my rate, I say 'look at my counterpart in a big firm and benchmark it against half that, plus or minus a little.' That has worked for me," Meadows said.

Culhane Meadows' clients include RaceTrac Petroleum, Radio Shack, Aon Corp., Tempur-Pedic, Fiserv and Porex Corp, said Meadows.

The firm's core practices so far are tech outsourcing, franchising, intellectual property and insurance work, Meadows said, adding that it has lawyers handling business litigation and transactional work, as well as securities law and labor and employment.

Meadows said he'd like to add tax lawyers, litigators and corporate lawyers working with early-stage start-ups in Atlanta. He envisions the firm expanding to somewhere between 50 and 75 lawyers to offer coverage across practice areas.

Meadows predicted more cloud-based competitors would spring up. "It's the wave of the future. FisherBroyles did a great job of innovating 11 years ago. We are going to see more of this—different variations, like Culhane Meadows, on that model because there is a lot of pressure on the legal market."