Fenwick & West's decision to seek equity in one of its tech startup clients is now, with the benefit of hindsight, looking like a stroke of genius.

Figma Inc. last week had a blockbuster IPO and Fenwick made money not only advising its client on going public, but also through the firm's ownership of almost 900,000 shares in the design and collaboration software company, according to Bloomberg Law reporter Brian Baxter. The value of those shares more than tripled on July 31, Figma's first day of public trading.

On this episode of our podcast, On The Merits, Baxter talks about why this type of non-traditional compensation model can make some law firms outside Silicon Valley a bit squeamish. He also talks about how, despite the huge potential upsides, there are financial and ethical risks when a firm owns a stake in its own clients.

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