Joining a Distributed Law Firm? Don’t Forget Your Financial Plan
Q: What is a distributed law firm?
A distributed law firm is a virtual firm where attorneys work remotely, keep most of their billings, and share resources through a central platform. Firms like FisherBroyles, Scale LLP, Rimon Law, and Pier Ferd are leaders in this model.
The distributed law firm model has taken the legal industry by storm. Firms like FisherBroyles, Scale LLP, Rimon Law, and Pier Ferd are rewriting the rules of law firm ownership — offering lawyers the freedom to work remotely, keep a larger share of their billings, and design their careers on their own terms.
But while this model offers flexibility and earning potential that traditional firms can’t match, it also brings a new kind of responsibility: you are now your own business.Without the safety net of a traditional partnership structure, joining a distributed firm means you must think like an entrepreneur — not just a lawyer. That’s where strategic financial planning and tax planning become essential.
What Is a Distributed Law Firm, and Why Are So Many Lawyers Joining?
A distributed (or “virtual”) law firm operates without a central office. Attorneys work remotely, collaborate online, and share administrative support and technology through a centralized infrastructure.
Instead of the traditional partner-associate hierarchy, lawyers at distributed firms typically:
Retain 70–90% of their billings,
Work independently under the firm’s brand and systems, and
Pay a percentage of revenue or a monthly fee for compliance, billing, and marketing support.
For many experienced attorneys, this setup is liberating. You keep more of what you earn, choose your clients, and work from anywhere.
But there’s a catch: you’re also running your own practice within a larger network. That means the stability, benefits, and retirement programs of a traditional firm are now your responsibility.
Why Financial and Tax Planning Matter When You Join a Distributed Firm
When you move to a distributed model, you’re effectively transitioning from an employee or equity partner to an independent business owner. That change impacts every part of your financial life.
1. Income Variability
At traditional firms, paychecks are steady. At distributed firms, income may fluctuate month to month. Planning for lean periods, setting aside tax reserves, and building a predictable income stream become essential.
2. Tax Complexity
Joining a distributed law firm changes your tax situation dramatically. You’ll likely operate as a 1099 independent contractor or through your own S-Corporation or PLLC.
This means:
You’re responsible for quarterly estimated taxes.
You can deduct legitimate business expenses, such as software, marketing, and professional development.
You can create tax-advantaged retirement plans (Solo 401(k), SEP-IRA, or Defined Benefit Plan).
You can use S-Corp elections to split income between salary and profit distributions — potentially lowering self-employment tax.
Tax planning is not just about compliance — it’s about wealth optimization. Strategic entity setup, retirement contributions, and deductions can easily save distributed lawyers tens of thousands of dollars each year.
3. No Built-In Retirement or Benefits
Unlike large firms, distributed models typically don’t offer group health, disability, or retirement plans. You may need to create your own benefits package — and coordinate them with your personal wealth strategy.
How to Build a Financial Plan as a Distributed Lawyer
Joining a distributed firm can be one of the most rewarding financial moves of your career — if you approach it with intention. Here’s how to build a financial foundation that supports your autonomy.
1. Treat Yourself Like a Business
Set up the proper entity — usually an S-Corp or PLLC — to handle income and expenses.
Separate business and personal accounts.
Set a reasonable salary and pay yourself regularly.
Track revenue, expenses, and profitability monthly.
Hire a bookkeeper and CPA who specialize in professional services.
This structure provides control, professionalism, and significant tax advantages.
2. Master Cash Flow
Inconsistent income is normal for distributed lawyers. Combat it with systems:
Use a Profit First-style allocation to divide revenue into income, tax, profit, and expense accounts.
Build a three-month business reserve for lean months.
Avoid lifestyle inflation by defining your personal salary separate from firm revenue.
3. Make Tax Planning a Year-Round Strategy
Don’t wait until April to think about taxes — distributed law firm owners should plan proactively all year.
Consider:
Quarterly tax projections to avoid surprises.
Pre-tax retirement contributions (Solo 401(k), cash balance plan).
Health reimbursement arrangements (HRAs) for tax-free medical expenses.
Home office deductions and business use of technology, travel, and continuing education.
A proactive tax strategy lets you keep more of your hard-earned revenue and reinvest it into your practice or wealth portfolio.
4. Rebuild Your Benefits
Since you may be no longer under a firm-wide benefits plan, take control of your protection and future:
Health Insurance: Explore ACA plans, group professional associations, or individual policies through your entity.
Disability & Life Insurance: Protect your most valuable asset — your ability to earn.
Retirement Savings: Automate contributions monthly to match what a traditional firm would have offered.
5. Plan for Growth and Efficiency
As your distributed practice grows:
Invest in systems and automation (billing, CRM, document management).
Hire remote assistants or paralegals to free your time.
Track KPIs like billable hours, realization rates, and client acquisition costs.
Schedule quarterly business reviews to align your growth with your long-term vision.
Your goal isn’t just income — it’s building a scalable business asset that funds your future independence.
Don’t Overlook Business Planning
Financial planning keeps your personal wealth on track. Business planning ensures your distributed practice grows sustainably.
At The Lawyer Millionaire, we help law firm owners — even solo distributed practitioners — create a One-Page Business Plan that includes:
Purpose: Why you do what you do.
10-Year Vision: What success looks like.
Strategic Goals: Growth, profitability, and work-life balance.
Quarterly Focus: The key actions to drive momentum.
This kind of clarity transforms a distributed practice from “freelance lawyering” into a thriving, purpose-driven business.
Designing Your Exit Strategy (Even in a Distributed Firm)
You might not have equity in the firm itself, but you can still build a personal exit plan that provides long-term financial freedom.
Options include:
Developing recurring referral income or consulting arrangements.
Building passive income outside the firm (real estate, investments, private lending).
Creating a personal brand or niche practice that can be licensed, transitioned, or sold.
Transitioning to of-counsel or mentorship roles within your distributed network.
Your “exit” doesn’t have to mean retirement — it means freedom to choose how you spend your time.
Ready to Take Control of Your Financial Future?
Whether you’re already part of a distributed law firm like Pier Ferd or FisherBroyles, or considering making the leap, now is the time to design your roadmap.
👉 Schedule your strategy call with The Lawyer Millionaire to build your financial, tax, and business plan for lasting freedom and success.