MyShingle : Solo and Small Law Firm Management and Marketing

This article, Debt Relief May Be In Sight for Lawyers (Chicago Sun Times 11/27/06) reports on the status of legislation proposed by Senator Dick Durbin back in 2003, that would grant student loan relief to public sector lawyers in the criminal justice system.  From the article:

The average young lawyer from a private law school graduated with $78,763 in debt last year, according to the American Bar Association. The average graduate of a public law school owed $51,056. Durbin's office puts the numbers higher, with the average private law school graduate carrying $97,763 in debt, and public school graduates owing $66,810 .  According to Murray -- who had $14,000 in debt when he graduated in 1983 -- the trend is forcing lawyers to leave the state's attorney's office, and persuading third-year law students not to apply. "It definitely weighs on me. I'm going to be paying it for the rest of my life," said assistant Cook County State's Attorney Jullian Brevard, who owes about $90,000.

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With Thanksgiving now over, it's time to start thinking about holiday gifts.  And Reid Trautz has some interesting suggestions in his 2006 Holiday Gift Guide for Lawyers.  Check it out!

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"If you love what you do, you'll never work a day in your life."

That's the standard that Sauk Center, Minnesota attorney John Mayer has lived by throughout his 48 year career as a solo, which will now come to a close with his retirement, according to this profile from the Sauk Herald (11/21/06).  Articles like this make me wonder where I'll be in 30 years (I've already been practicing 18) and what kind of career I'll look back on. 

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If you're starting a firm and not sure that you want to work from home, but are concerned about the cost of rent, a virtual office might be right for you.  This  article from the Chicago Business Leader (11/20/06) gives an overview of the costs and services of HQ Global, one of the larger competitors in the virtual office space arena.

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At the Legal Profession Blog, Jeff Lipshaw wonders whether it's natural to spend one's time "the same firm, doing the same kind of work, progressing in the level of oversight and client contact...."  As a solo, I don't often feel that way, since I always have the opportunity to reinvent myself and my practice.  Yet sometimes, inertia keeps me in the same place.

So I got to wondering what my solo colleagues do to keep it fresh.  What do you do to ensure that you're always feeling challenged, that you're open to new possibilities? For a long time, blogging helped me keep my practice fresh, but after four years, blogging feels a little routine as well. 

So readers, any ideas?  Please post them below.

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Seth Godin has some great advice on the best time to start a firm:  maybe last year, maybe never.  But the second best time is now.  So go for it (and read Godin's entire post).

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Whether you like Harvard Law School or not, you have to agree that virtually every HLS graduate can write their own ticket to whatever job they want.  So it's gratifying to see that with so many career options, young HLS grads are still choosing solo practice, as reported in this article from the HLS Bulletin, The Coming Wave  (11/5/06).  The article profiles  Luz Herrera and Eric Castelblanco, HLS grads who each opened solo practices to serve underserved, Hispanic communities.  From the article:

For both Castelblanco and Herrera, there was no road map for an Ivy-educated lawyer to start a viable law practice for low-income clients. "Traditionally, if you want to do public service, you are directed to apply for a Skadden fellowship, work for the government or go to a civil rights impact litigation organization," said Herrera. "But for me, none of those options seemed like the right choice. I did not want to spend 90 percent of my time doing research or working in a direct-service organization whose approach I did not completely buy into. Working in my own law office allows me to provide legal services to individuals who may not otherwise have an attorney and tap into my entrepreneurial spirit while being an active member of the community."

But before Herrera could help people navigate the legal system, she had to figure out the nuts and bolts of running a law practice, including how to set up a billing system--problems that a first-year associate at a major firm would never have to worry about. "The first year is very hard," she said. "No one tells you how to set up a practice in law school."

Now, Herrerra has taken a break from her practice and has joined the Community Enterprise Project at Hale & Dorr to develop a fellowship that will help law graduates learn how to start law practices in underserved communities (a project which sounds similar to the Law School Consortium).

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Plenty's been written about the evils of the billable hour; how the billable system measures time rather than value and in so doing contributes to inefficiencies and bill padding.   But criticism of value billing is harder to come by, and with the exception of David Giacalone's writings, you don't find much negative commentary about value billing in the blogosphere.

But just as the billable hour is not perfect, neither is value billing.  Consider this recent case involving Greenwich lawyer Gary Cohen.  According to this article, Cohen's former client has filed an a grievance against Cohen for allegedly forcing him to pay a $300,000 bonus for successfully mediating a dispute.  The bonus bumped Cohen's $450/hr rate up to $1500/hr.  The article also says that Cohen demanded payment of the bonus in the middle of the mediation, and that Cohen threatened to walk if he didn't receive it.  Cohen denies that he ever threatened to abandon the client. 

But Cohen has not reduced his fee requests.  Rather, Cohen and his attorneys defend the fee on "value billing grounds."  From the article:

Cohen says he was worth every penny in a complicated case involving more than $100 million and a very needy client. He says he accomplished Zimmerman's top goal, which was complete control of his company.

Katherine Callahan, Cohen's attorney, said the additional fee was justified because the mediation was extremely time consuming and avoided a trial that could have resulted in a loss of millions of dollars in assets for Zimmerman. She objected to the state's calculation of $1,500 per hour. "That is really an inappropriate way of looking at attorney fees," Callahan said. "Disciplinary counsel is dumbing down the argument to convince the panel something inappropriate occurred here."

Apparently, a jury did not buy the value billing argument.  As reported here, it found against Cohen and ordered return of the bonus. 

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Readers - one last reminder that this Saturday, November 11, the Maryland State Bar Association is sponsoring its 8th annual conference on starting a law firm.  The information can be found here in this earlier post.

I'll be speaking on blogging - you can view a sketch of my presentation as well as the more detailed one I gave three years ago, entitled  What Blogs Can Do For Solo and Small Firm Lawyers.  I'm sure if you're reading my blog, all of this is old news to you, but the conference agenda looks interesting and it's a great way to meet other solos in Maryland.  And I'd love to meet you, of course.  Hope to see you Saturday.

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I've always likened the rise of modern day independent practice (call it the Third Wave if you will) to the dotcom era.  Before dotcoms, small entrepreneurship wasn't cool.  But the success of little garage companies forced our profession to look at law firm start ups in a different light.

And because law firm start ups have much in common with tech start ups, from shoe string budgets, to competing in areas traditionally handled by larger players, I was thrilled to read this outstanding post by Jeff Lipshaw at the Legal Profession Blog.  Lipshaw writes about a paper in the Journal of Financial Economics, authored by David Kirsch which suggests that the actual failure rate of dot.com start ups was far lower than perceived - roughly 20 percent.  But the steady survival of smaller companies was overshadowed by massive failures of sites like eToys and pets.com. (the post goes on to discuss potential business development ideas that might follow from these statistics, so read the whole thing).

So what does this mean for potential law firm start ups?  Simply, your chances of success are greater than you think!  Get out there and get started.   

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The impact of solo and small firm practice is far reaching, so much so that in my view, it's helping women attorneys succeed at biglaw.  Don't believe it?  Consider these two stories that ran in today's news.  The first, Deciding to Go It Alone, (San Fernando Valley Business 11/4/06) reports on how more and more, women lawyers are choosing solo practice to accomodate families and to get to the top more quickly than they might by staying at a firm.  The article also notes that with technological advancements, it's less costly to open a firm than ever.  The second article, Part Timers Find Room at the Firm (Boston Globe 11/5/06) talks about how law firms' part time programs, some which enable women to work from home, are giving women incentive to stay at firms.

So what does one article have to do with the other?  Plenty!  Used to be that biglaw was the only option for smart women, so large firms could call the shots, demanding that women work full time or leave.  No more.  As the barriers to starting a law firm decrease, more and more women are successfully starting firms (as I've discussed here) and don't need to settle for the sham part time programs that some firms initially put in place.

The Globe article credits the firms as well as  "visionaries" who  work towards work life balance:

Effective change doesn't happen overnight, and almost always, it's powered by group efforts, policies with bite, leadership support, and visionaries, such as Williams and Henry, who keep their eyes on the ball.

But that's only a partial explanation.  Because of solo and small firm practice (and the technology to run a practice that serves biglaw clients), women have a real alternative to biglaw and they don't need to settle.  Programs like The Project for Attorney Retention  may never mention solo or small firm practice, but in truth, programs like PAR owe some of their success to the success of solo and small firm lawyers. 

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Over at Lex Blog, Kevin O'Keefe posts about some of the negative reaction to his earlier discussion about how younger lawyers are using MySpace for advertising.  Seems that some marketing experts don't find MySpace a sufficiently dignified or suitable marketing tool.

While I find much value in the advice that practice management advisors and experts have to offer and indeed, follow much of that advice, I never take it as gospel.  Because for every rule, there's an exception, for behind every exception there's an amazing success story.

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Dan Hull of What About Clients has rounded up twelve of his past blog posts into a comprehensive Twelve Rules of Client Service.  Read it if you want to stay a step ahead of your competitors.

Though Dan's post addresses client service, it's actually a great model for great rules for serving your blog readers.  Many readers may be new to your site and may not have read some of your best top posts.  So why not, like Dan has, repackage them as a "greatest hits" album of a sort and put it out for your readers.  You'll give them a taste of the best that your blog has to offer, and at least for one post, you won't have to search for new material! 

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Robert Denney has an article in this month's Oct/Nov '06 issue of  Law Practice Management on What's Cooking for Solos and Small Firms.  At least one the trends is kind of old news to me, such as the move towards specialization, though in rural areas, clients seem to want and need the old-fashioned "country lawyer" who has a diverse practice and can serve as "one stop shopping" for the client's legal needs.  Solos, however, who specialize, are offering one stop shopping as well by affiliating with other specialized lawyers. 

As for trends, standbys like estate planning, divorce and criminal remain hot, with elder law and immigration law growing in popularity.  Consumer bankruptcy has cooled because of reforms, as had medical malpractice, because of tort reform.   

And there's good news for lawyers who want to pursue traditional biglaw practice areas:

Because of Sarbanes-Oxley and other potential conflicts, the lawyers in large firms no longer serve on the boards of publicly held companies. Recently, however, there seems to be an increase in solos and small firm lawyers sitting on the boards of privately held companies. And not only are these lawyers serving, in effect, as "in-house" legal counsel, they are also serving as trusted business advisors.

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Allison Shields of Legal Ease has started a series on how to set fees, with these two posts here and here.  Shields spends a good deal of time describing how lawyers examine a case up front in detail, so that you can figure out how to assign a fee.  And her advice garners compliments from Michelle Golden at Golden Practices who writes that Shields' approach enables clients to count on a fairly well defined price, phase by phase.

Is preparing a fee estimate a radical idea?  Is it true that most lawyers don't evaluate a case in advance or give client estimates?  I've been giving clients estimates for thirteen years in my own practice, primarily because I learned it from the lawyers at my former firm.  If this technique is new to lawyers, than I've learned something from Shields and Golden that I'd rather not know.

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