Summit hired an ethics specialist, who argued that the bar’s rule violated the First Amendment.  In the end, the firm kept its name, and the Washington Supreme Court changed the rule.  But the incident was only the start of efforts by the 16 big-firm expatriates who make up Summit to reengineer the very idea of the traditional law firm.  They tossed out the partner-associate hierarchy and made everyone an equity partner.  They shunned Seattle’s office towers and set up shop in cheap space about a mile from downtown.  They offered no corner suites for rainmakers.  Everyone, including lawyers and staff, has the same size office.  Compensation and finance aren’t shrouded in secrecy.  All lawyers and staff know the numbers.  And when they send a bill, they actually allow the client to reduce the amount due.

 Is this any way to run a law firm? Or, to put it differently, if cutting-edge management theories and techniques can produce faster, smarter companies in the business world, then why not in the legal profession?

    At this point, the Summit business plan appears to be working. This year, its first full fiscal year, the firm says it expects to bring in revenue of $6.5 million, slightly ahead of its target of $6.2 million. That's very good indeed but hardly surprising, given who the lawyers are. Three of the founders have been managers at big firms. Palumbo helped found Heller's successful 15-year-old Seattle office, which today has 70 lawyers. Otto Klein III headed that same office from 1989 to 1994. Summit partner William "Randy" Squires III ran the litigation department at Seattle's Davis Wright Tremaine for ten years. To fill out their ranks they cherry-picked some of the brightest young lawyers in their firms. Their goal was not to create a boutique, but rather to offer clients a broad range of services, including litigation, corporate, employment, and environmental expertise for major corporations, as well as start-ups.

 Some observers think the whole concept of a firm that claims to reject hierarchy is silly. "My view is that these people have overdosed on watching thirtysomething," remarks a partner at one of the city's biggest firms. Others are less dismissive. Adam Brotman, president of client PlayNetwork, Inc. (and a former Heller associate), insists that "a law firm needs to think like a company—a twenty-first-century company." Brotman, whose small Seattle enterprise provides music programming for Starbucks Corporation and other businesses, believes that "in 20 years they will be the model for how law firms are doing business."

It seems a bit unlikely, doesn't it? Especially considering that the profession is notoriously reluctant to change and that most firms are doing fine—at least financially—by following tried-and-true traditions. On the other hand, with associate dissatisfaction rampant, and clients keeping up a steady buzz of grousing, there's plenty of room for improvement. Summit has started with good intentions, and with minimum politics and ego clashes. So far, so good. But what happens next?

      AT 9 A.M. ON MONDAY, OCTOBER 19, the whole Summit team—partners and staff—crowds into an unadorned conference room for their weekly meeting. There's not a coat or tie in sight. (The casual look has at times stretched as far as shorts and Teva sandals.) Karen Andersen, the firm's de facto chief financial officer, distributes the weekly cash flow analysis to everyone. "We had a horrible week last week until Friday," announces the 37-year-old corporate partner. "But we ended the week doing fine. We have a substantial amount of money coming in."

     After reviewing a few clients' unpaid bills, the discussion turns to the firm's upcoming Christmas party, lawyers who have interviewed with the firm, and volunteer projects. Andersen mentions an "adopt-a-class" program in which the firm would contribute computers and other technology to a school class. "It helps get our name out there, albeit to sixth-graders," she jokes.

     On the marketing front, Klein throws out an idea. "Law firms typically send out newsletters, and they're all identical. I thought one thing we might do [is] make it informative but completely irreverent. The Wieden & Kennedy ad agency did this," he says, referring to the creators of Nike, Inc.'s "Just Do It" campaign and the humorous newsletter the firm sends to its clients.

      After some discussion, Klein canvasses the group. “Is this worth pursuing?" he asks. The consensus is yes.

      A jokey newsletter, of course, wouldn't fly at most big firms. Or any big firm, for that matter. The fact that Klein is taking his cue from Nike's ad agency, instead of Latham & Watkins, shows Summit's mindset: that it should draw its lessons and inspiration not from other firms, but from successful businesses. In fact, many of the firm's ideas have been ripped from the pages of books by Tom Peters and other corporate gurus.

      The vision for Summit began years ago, during Palumbo's commute from his home in the exclusive Highlands section of northern Seattle. Heading to Heller's downtown office, he would snap a Peters tape into his car's cassette player and learn to think outside the box. He wrote memos (or "diatribes," as he calls them) to other Heller partners about innovations the firm should try, such as reducing overhead by moving to cheaper, more efficient space, and trimming the administrative support staff. He also hashed over ideas with his partner and friend Klein.

     Despite their shared interest in management, Palumbo and Klein are something of an odd couple. The voluble Palumbo doesn't hide his emotions; he might as easily throw a tantrum or plant a kiss on a colleague’s head, depending on his mood. Klein, an employment lawyer, is the steady stoic, who signals his feelings through a flash in his steely blue eyes. When Palumbo's ideas veer too far into the fanciful, Klein reels him in.

      The "manifesto," as it became known, was a hot topic during that desert weekend. (The all-partner concept was deleted because the authors knew it would never fly.) The firm debated letting the Seattle office experiment with some changes, but not everyone in Seattle wanted to be a guinea pig. Many blanched at the notion of moving out of their posh offices in the Columbia Tower, the city's tallest building. "'You're asking us to give up our views?" Palumbo recalls people exclaiming. The retreat ended with the formation of a few committees; Palumbo and Klein left thinking that they had lost.

      The revolution might have ended there if it weren't for a fifth-year Heller associate named Matthew Harris, who was intrigued with Palumbo's and Klein's ideas. Harris was considering leaving Heller and asked the two partners to join him for a drink at Ruth's Chris Steak House across the street from Heller's offices. As Klein recalls, Harris challenged them to start a new firm, saying: "You both talk a good game about change and the places you want to see the law [profession] going. I really want to be a part of that. You ought to put up or shut up."

      That's pretty audacious talk for an associate. But Harris, now 38, didn't have a typical associate's background. Before becoming a lawyer, he had worked as a software engineer for five years for Ross Perot's Electronic Data Systems Corporation, where he helped create a computer system for the first Saturn car plant in Tennessee. The innovative division of General Motors Corporation uses a team decisionmaking model that impressed Harris. "They wanted [all the workers] to feel part of the business, to make them feel their opinions mattered," he recalls. "It sure looked like it worked from the outside." 

     Klein and Palumbo soon told Harris that they would try to start their own firm. For the next several months the trio and two others met over breakfast, careful to leave restaurants at different times to avoid being seen together. By early 1997 they had recruited six other lawyers from Heller, for a total of six partners and five associates, and a handful of lawyers from other firms such as Davis Wright Tremaine.

      The parting appears to have been amicable. Every former Heller lawyer at Summit praises their old firm as a great institution. Although the loss of 11 lawyers was a blow, Heller's Seattle office continues to do well. Heller chairman Rosenfeld agrees that law firms "desperately need to change," but he believes big institutions must move incrementally. Still, he applauds his departed colleagues for their ideas and ambition. "I admire them for this, putting theory into practice," he says.

      I COULD SEE HOW [THE Partner-associate hierarchy] supposedly increased value to partners, but I didn't see how it added value to customers," says Palumbo over a lamb burger in Seattle's Fremont district, a center of the city's counterculture. (At 51, Palumbo is Summit's oldest lawyer and one of Seattle's best-known litigators, but the trim runner could pass for a decade younger.) Palumbo adds that he doesn't even believe that associates create that much profit for partners at firms, contrary to popular wisdom. After doing his own detailed calculations, he concluded that most associates bring in about as much as they cost (including benefits and overhead), unless they bill extraordinary hours and the firm collects on all that time—a contention he readily backs up with numbers. More important for clients, paranoid associates who obsess about making partner aren't efficient workers. "You'd see young lawyers writing fourth drafts of memoranda that should have been delivered orally," he says. "It didn't helped customers. It increased the cost of services."

      Palumbo also didn't see how clients benefited from their lawyers' fancy offices. Two years ago he enjoyed sweeping views of Puget Sound and the Olympic Mountains from his sixtieth-floor corner office. Now he works out of a 12-by-14-foot room with no exterior window. His secretary has an office that is exactly the same size. Instead of gazing at ferries crisscrossing the sound at sunset, when they step out into the hallway he and his partners overlook the roof of the Pasta Freska Pizzeria, and its banner advertising a $5.45 all-you-can-eat lunch buffet. Summit's space, which it subleases from a software company, costs only $15 a square foot, which is less than half of downtown rates. With other cost-cutting measures, such as assigning one secretary to four or five lawyers, the firm has trimmed its overhead (which includes rent, support staff, and computer equipment) to $90,000 per lawyer. Big firms can pay twice as much (although firms use varying methods to calculate overhead). Some of that savings is reflected in hourly rates. Senior partners charge up to $250, compared to a top rate of about $300 at the big firms in town. That still left the firm with roughly $315,000 in profit per lawyer this year.

      Joining Palumbo for lunch are two of his young partners, Laura Bertin, who also came from Heller, and Mark Worthington, who worked for Davis Wright. At their old firms the two were associates. Bertin sits on Summit's five-person compensation committee, and Worthington oversees lateral hiring. (Everyone at Summit has at least three years' experience; the firm has no immediate plans to hire first-years.) Worthington, a 32-year-old Hastings College of the Law alum, stresses that the junior partners do have a voice. "To a real extent the young lawyers have equal influence," he says, also noting that because Palumbo and the older lawyers are often away, decisions are left to the younger crowd. Bertin, a 30-year-old Harvard Law School grad who came to Summit as a third-year from Heller, says that's fine with her: "It was amazing how much of my time [at Heller] was consumed with worrying about making partner." At Summit, she says, she focuses on ownership issues like expenses and client development.   

       With homespun art displays instead of expensive lithographs, Summit also makes a statement about its no-frills attitude. "You look at their wall and see all those family album photos [and you think], this is a group with a fresh approach," says client Glenn Oakes, vice president and general manager of CDM Philip Inc., a Seattle based designer, builder, and operator of water treatment facilities. It's also a message that encourages clients to let their guard down. "I don't feel we have to scrutinize their bills so closely," remarks Richard Takata, president and CEO of Eagle Hardware & Garden, Inc. (a Home Depot competitor), who has used Summit for corporate and litigation matters. Tim Paterson-Brown, president and CEO of Linters, Inc., which makes cotton tissue products, says he went to Summit after a bad experience with a large firm. "I arrived at [Summit's] offices and discovered their rent is cheaper than mine. That was a plus," says Paterson-Brown, whose company is in the pre-IPO stage.

      "It's almost a Nordstrom approach to customer service," says PlayNetwork president Brotman, referring to the department store chain admired for its customer service. "Whether it's their billing arrangement or their dedication to a project. They're not charging us for long-distance phone calls and copies and faxes—the nickel-and-diming you normally get.  Another thing is their willingness to explore alternative billing arrangements—flat fees or taking an equity interest in clients." Like Silicon Valley firms, Summit has allowed a few budding companies to pay all or some of their bill with stock. The firm holds equity in four clients that have not yet gone public. In contrast, Seattle's big firms, as a general rule, don't invest in clients.

    But Summit's cost-cutting zeal has also meant lean staffing that strains some lawyers to their limit, especially those working on "big firm"-type cases. "I can't remember a month under 200 hours. I don't want to do that long-term," bemoans litigator Harris. He and Palumbo are working on one of the biggest matters in the office, an antitrust case filed by client Caldera, Inc., a software maker, against Microsoft Corporation, alleging that Microsoft used illegal practices to prevent competition in the market for the DOS operating system software. The firm is cocounsel with the Seattle office of Houston's Susman Godfrey, which will be lead counsel at trial for the Utah-based software maker. The firm is looking to hire two more litigators and another environmental lawyer since two members moved in-house to Waste Management, Inc., earlier this year.

With all this work and the low overhead, have Summit's more senior partners improved on their big-firm pay? Not yet. Palumbo, who was near the top of Heller's scale, says his income has dipped slightly. That's mostly because a quarter of his work is tied up in contingency fees or matters that have not yet been paid, he explains. (Firmwide, that figure is 10-15 percent.) The Caldera case, for example, which Palumbo is spending much of his time on, is being done entirely for a contingency fee. But another senior partner—corporate lawyer Michael Erickson—says that he's doing about the same.        All the bills from Summit are unusual. Each contains a "value adjustment" line that lets the client subtract from (or theoretically add to) the amount due.  The idea is to make sure that  clients feel that they're getting  good value. As it turns out, very  few clients have used this feature. But it's created lots of  goodwill. "It sends a signal that  there's very much a two-way dialogue expected from clients," says CDM Philip's Oakes. "I see that, and I smile, and I think, I'm getting a good deal here."

       Lawyers at other firms, however, don't get it. Summit employment partner Rodney Younker recalls having lunch with a partner from a big firm and his client, a Fortune 500 company executive. The conversation turned to Summit's value adjustment line. "[The other lawyer] was absolutely incredulous," says the 33-year­old Younker. "He asked, 'What are you going to do when you send a bill for $30,000 and they send back a bill that says [we owe you] nothing?' " The client, however, was fascinated:  "It was clear to me the message was being received by the person I cared about."

      BECAUSE SUMMIT HAS NO MODEL to follow, the firm is making things up as it goes along. Already it's scrapped some aspects of its ambitious vision. The initial plan to run the office without management hierarchy proved inefficient. After six months the firm tapped Otto Klein as its managing partner—or, in Summit parlance, the "Big Dot." (Summit's trademark, which appears on its letterhead and other written materials, is a pumpkin-colored dot.) Klein's duties include approving major expenditures and hiring nonlegal staff. And this November they added a board of directors, but with a Summit egalitarian twist: It includes one paralegal, along with four lawyers.

      Summit is still figuring out where to go from here. In early October a "Summit summit" was held at Palumbo's home, and attorneys and staff discussed how the firm was doing and where it was headed. Growth—how much, how fast—was a major topic. So far the firm has stayed about the same size, although they've got enough work to expand. Some fear that if they get much bigger, they'll jeopardize Summit's culture. Since that meeting, the firm has been developing a five-to-ten-year plan, which at press time was still under discussion.

      Other firms have tried bits and pieces of the Summit experiment. New York's Anderson Kill & Olick started off 30 years ago with an all-partner premise. As the firm grew (it reached 240 lawyers at one point), the usual hierarchies and squabbling took root. Curiously, the Summit partners were unaware of the New York firm or of the fate that befell its experiment. But even if they were, it probably wouldn't have altered their strategy—or their long-term hopes. "I don't know if all the answers are in," says 51-year-old Summit partner Randy Squires. "[It's not clear] whether we'll be able to continue to operate in the egalitarian way we want to operate.... We won't know for five to ten years." But, he adds, "we're certainly off to a good start practicing law. We have too much work."

      Keeping busy isn't good enough for Palumbo. He sees the firm's members not only as talented professionals, but as iconoclasts. Making money isn't the only point. Summit's greatest risk, he says, is that it will drift back toward the traditional law firm model and end up as a really good boutique instead of a trailblazer. "I would like to change the practice of law," he declares. "I don't think we'll change anything overnight, but I hope we put the heat on our competitors and make them think harder."