MyShingle : Solo and Small Law Firm Management and Marketing

Back in 1999, seven months pregnant with my younger daughter, I surrendered the Washington D.C. office around the corner from the White House that I'd occupied for half a decade.  Though the rent was bargain basement cheap - around $500 including the phone line - I realized that I'd only used the space a dozen times, if that much since my older daughter's birth three years earlier and keeping the office didn't make sense.  And since I planned to cut back on my hours even more with a new baby, saving $500 would make a difference.  Nevertheless, I couldn't shake the feeling that I was somehow taking a step backwards by moving my office back home where I'd started when I couldn't afford anything else.

Fast forward to 2007, and attitudes, including my own, have completely changed (something that is reflected in my book as well).  Now many lawyers and small business folks are affirmatively embracing the benefits of the virtual or home office and using those benefits as a selling point for clients.

Though you're probably already familiar with virtual law-vangelists like Stephanie Kimbro, Grant Griffiths or Chuck Newton, more and more solos and small firms are following this path.  A recent example is Rhode Island family and divorce lawyer, Christopher Pearsall.  He's proudly proclaimed
that he plans to close his physical office in Cranston, Rhode Island and go completely virtual.   All the better, he says that he'll pass the savings on to his clients, many of whom are struggling in these tumultuous economic times.  Moreover, Pearsall is using the opportunity to tout his firm's technological prowess - he'll be the first Rhod Island divorce lawyer in the state to go completely virtual and almost 100 percent digital.  That's likely to help him draw a whole new category of clients who work in the high tech industry or otherwise adept with technology and clients with busy schedules (which means they're employed and earning money) who appreciate the convenience of virtual access.

When I graduated law school twenty years ago, most lawyers would have turned up their nose at a home office lawyer and most lawyers would have gone into debt just to rent office space rather than work at home.  Those days, quite simply, are history, rendered as obsolete as Supreme Court precedent like Dred Scott or Plessy v. Ferguson.  And though I don't like to think about my increasing age (though I have to today since it's my birthday - 44th, to save you a Google search!),  getting older is made more palatable by giving me a chance to bear witness to positive changes in our profession.

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If you've ever discounted your fees, either voluntarily to lure a client to your firm or involuntarily because  your client ran out of cash, you're in strong company.  As I posted over at Legal Blogwatch, 76 percent of law firms discount their fees.  But what's even more interesting is that 89 percent of the discounters practice in firms of ten lawyers or more, while only 59 percent of the smaller firms cut their fees.  However, the study that I cited as summarized by Greatest American Lawyer (the study is not free) does not explain when or why firms offered these discounts.

So what does this mean for solo and small firm lawyers?  First, if you compete with the big boys, don't assume that your $400 an hour rate is necessarily a bargain compared to biglaw - since the partners may be chopping their billing rates.  You may still be cheaper, but not as much as you think.  So when you make your pitch, don't rely on cost alone (which still matters, at least based on my own review) but also the added value that you can bring with better client service.  Second, if you find yourself involuntarily cutting fees after the fact, ask yourself why.  Did you under budget and leave your client unprepared to pay a higher fee?  You might want to consider flat fees, where the client knows the firm cost up front and can budget for it. 

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Some law firms start with fancy business plans and grand visions.  Others happen seemingly by accident - and yet if we look back, we can trace the result to a series of choices earlier made.   In this nostalgic post, New York Personal Injury Attorney Eric Turkewitz shares how his firm was born out of a decision he made twenty years ago to quit his job at a high power law firm and travel around the world.   And if this build up doesn't sufficiently tantalize you, then let me try being more emphatic:  YOU MUST READ THE POST!

By the way, if you're wondering, here's how I got my start.  Let me know in the comments section how you got yours.

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Here's a question from a reader of this site and Solo by Choice:

I spent two years at a large law firm and now clerk for a federal district court judge.  I want to start my own practice after my clerkship concludes, but if I do, I'll be turning down the $50k starting bonuses that firms routinely offer to law clerks.  Should I go to a firm and take advantage of the bonus and get some more experience or give up the money and start my firm when the clerkship ends, relying on the 6 months or so of expenses that I'll have available?

Thanks for your question.  As many of my readers know, I'm not the throw-all-caution to the wind, settle-for-nothing less than starting a practice type of person.  I do believe that in  some situations, it may make more sense to accept a good job offer after law school, even for a year or two to start building contacts and to keep options open down the line.  However, your situation is not one of those.   Based on your letter, you are ready to start your firm now.  And in fact, in the long run, you may hurt your career more if you return to a job that you don't want instead of starting your firm.

Consider this - even after two years at a firm and a year at a clerkship, you still crave starting a law firm.  There's a voice, a spark inside you that isn't going to rest until you give it a try.  You can go back to your former firm or try a new one, but that voice will haunt you.  And as you toil over documents or try to get your fix of working with a client directly through the firm's pro bono program, you'll begin to feel resentful and perhaps even start to sabotage yourself with an uninspired performance.

I realize that the $50,000 ups the ante quite a bit.  But let's face it - if you take that money, realistically, you are committing to at least another two, possibly three years at a firm.  If you jump ship any sooner to start your own practice, your firm is going to figure, rightly, that you took the job to to build up a nest egg to start your own firm.  And suddenly, any of your accomplishments at the firm become suspect.  Take a client and the firm's going to assume that you were angling for it all along.  Why risk your reputation, your most important asset in your career, for a clerkship bonus and a bit more short term security?

Continue Reading...

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Not surprisingly, many American Airlines customers expressed significant outrage over the airline's recently announced plans to charge passengers additional fees for checking bags and for certain services related to reservations. Indeed, the news may have irked you as well. But before you start venting, ask yourself whether your billing policies "nickel and dime" your clients just as the airlines are doing to passengers.

For example, do you charge your clients when you call them to get additional information that you need for the case that you neglected to request? Do you bill them for correcting an error that you made on their bill? Does your $750 bill also tack on a .44 cents charge for postage and a $43 LEXIS charge? If those are some of your policies, you might want to re-examine them before complaining about American Airlines.

The bottom line is that most people don't like to feel as if you're squeezing money out of them every time they turn around. If American Airlines had simply raised fares an extra $50 to reflect increased gas prices, I doubt that most people would have raised a stink. But what bugs them are little charges here and there that should simply be rolled into the overall cost of a ticket.

For that reason, clients prefer flat fees, where they can pay one price and there's no uncertainty about added charges. But even if flat fee billing isn't feasible, consider rolling incidental costs like legal research services, phone, fax, postage and photocopying into your overhead and simply charging a higher hourly rate to cover these fees. Clients will balk less about your rates when they perceive them as encompassing full service rather than pay as you go.

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Some lawyers want to start law firms, but fear that they'll fail either because they floundered at their previous place of employment or performed poorly in law school. If that's where you find yourself, worry no more. According to new research, a lack of control in a job situation has a fundamental effect on one's mental abilities. That's because lack of power forces people to constantly re-evaluate and second guess themselves, thus redirecting their effort from substantive tasks and  diminishing their performance.

The theory makes sense. For example, how many times did you psyche yourself out before a law school test, trying to absorb all kinds of conflicting advice on what to do and not to do, instead of just following your gut. And on the job, how much time did you spend worrying about what your boss was thinking instead of using your own judgment to figure out what the client wanted or what would make the brief most persuasive.

So give yourself a break. Past performance is never indicative of future success, especially if you functioned in a less than ideal school or work environment.

HT to Feminist Law Profs for the link.

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Well, I'm a couple of days late in getting around to announcing the winners of this& contest. My delay is attributable to a massive struggle with my video camera, the microphone (the first version really didn't work) and the iMovie editor (which is not nearly as intuitive as I'd thought). Anyway, all of my great video work (I've got an awesome camera) was neutralized when I compressed the video to upload it, but isn't the sound great? That's the benefit of the plug-in mic! Anyway, here's the video:

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OK, so I realize that my headline sounds crazy.   After all, you just started a law firm four or six or eight months ago.  You're barely covering your expenses, you still have no idea what you're doing, you've chosen - by design or necessity - to work from home so you don't have an office and you're constantly scrambling to networking events or lunchtime meetings to market your practice.   And now I'm suggesting that you hire a summer associate?!   Sheer lunacy, right?  Well hear me out. 

Few things will make you feel more like a real law firm owner or convince you of your abilities than hiring a summer associate, a law clerk or even a college student.  Clueless and bumbling as you may feel, in a student's eyes, you're regarded as a successful professional.  Moreover,  overseeing a student will make you realize how much you really know.   When you edit the student's memo or explain to him how to file a document at the court house, you'll immediately see how far you've come. 

Hiring a student offers practical advantages as well.  Students have full access to LEXIS and Westlaw for educational purposes.  In my interpretation, any assignment that gives students hands on learning constitutes education, so I've always felt comfortable when students used their accounts to research projects for me.  In addition, when you take a student associate or clerk to court or to a networking function, you 'll impress your colleagues by showing that you're already doing well enough to sustain and train a part time hire.  Finally, if you ever decide to leave solo practice to apply for a job, or if you compete for work in an RFP, you can claim managerial experience since you supervised a law student.  Continue Reading...

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There's still time to download a copy of an e-book and win a copy of Solo by Choice.  The contest closes May 15, 2008 (you have until midnight) and I'll be drawing two winners on May 16, 2008.  I may (or may not) do a public drawing online, but I won't announce the winners pubicly for reasons of confidentiality.   To sign up to win, click here.

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Not to draw further attention to the Paul Hastings associate, Shiyung Oh's termination, but I'm fascinated by the new information about life at large firms that's emerging as a result of the story.  For example,  the Wall Street Journal obtained a copy of Oh's review, which showed that Oh excelled at her work, but which also contains some interesting tidbits about law firm life.

For example - Oh graduated law school in 1998, and worked as a litigator. However, on the last page of her review, there's a comment that

Opportunities should be sought for her to become involved in an arbitration and she should get into court if at all possible.

(Oh's bio says that she did assist in "preparing and arguing motions")  Can you imagine working as a litigator for ten years and rarely making it into court?  Most solos are able to find an opportunity at a court room or a hearing within a year of starting a practice.

I also noticed that Oh was graded as "met expectations" for client development.  That's not surprising; apparently, she was so overworked that she didn't have time to go engage in more business development.  And that's a problem for most lawyers, us solos included:  finding the time to always hunt for new business, even as we're churning out work for paying clients.  

However, most of us solos do find ways to do this - either by setting aside time for business development, outsourcing some marketing tasks or administrative tasks - because we realize that our firm depends upon  a constant flow of new business for our  livelihood.  I'm not sure that many large firm associates recognize the importance of business development.  But what's worse is that  their superiors aren't doing a very good job about helping them to build the business that is vital both to their own futures, and the future of their law firm. 

Ironically, the one tangible suggestion to Oh in her review is that she check her record keeping accuracy to make sure that she's not "unwittingly" cutting her time.  Which about says it all:  firms are more concerned about associates as "billing machines" than anything else.

To those associates who want to change biglaw, more power to them.  But maybe it's about time that they consider starting their own.

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In this earlier post, I criticized a Paul Hastings associates for outing the her firm for the circumstances surrounding her firing.  I agreed that the firm acted boorishly, but I didn't believe that was anything new - and felt that the associate may have burned bridges and harmed her chances for future opportunities. And now, I'm happy, albeit embarrassed, to admit that I was wrong on a few counts.

The comments to my post and the here and here provided more information and also lead me to reconsider initial position.  Originally, I'd thought that  the associate expressed her views about the firing out of vengeance or anger.  However, her motive was to help associates laid off for economic reasons avoid the same self-doubt and loss of self-esteem that she herself had faced.  And it's ironic that I missed this intent completely - given that in my book, Solo by Choice, I devoted an entire sidebar to discussing my own firing for the same reason.  I wanted people to know that even when you're fired, it doesn't mean that you lack ability and won't find more success at another job.

However, more importantly, what I've also learned from the post and the blogosphere is that in today's internet world, even in burning bridges, you can create new opportunities.   Happily, the associate has received an outpouring of support who are willing to help her locate new employment - and that probably would not have happened had she not come forward.  And now that she's made herself available for interview, her firm is stuck in the uneviable position of remaining silent and letting its reputation take a hit.  I have to admit that after all this time of working outside of law firms,  I still underestimate how much pent up frustration and resentment exists against large law firms.   And that after all of this time blogging, I still don't always fully appreciate the capacity that the Internet offers us for constant reinvention. 

Still, this recent story shouldn't serve as license to go hog-wild when you're let go from a job.  As I said, initially I was confused about the associate's motive because I didn't have the whole story - so if you're going to send a message to your firm, try to be clear about the intent so the more obtuse of us out here will understand your position.  Several years ago, Denise Howell gracefully discussed her termination by her firm in this post which seemed to strike the right chord.  Finally, good luck to Shiyung Oh in taking advantage of the opportunities that lie ahead.

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On June 3, 2008, I'll be giving a webinar for JD Bliss entitled www.aFrom Biglaw to Yourlaw: The Secrets of Starting and Growing a Successful Solo Law Practice.  Like my book, the webinar contains plenty of general advice that's useful to lawyers starting a practice at any stage of their career.  But it will focus specifically on some of the issues related to starting a firm that are unique to lawyers presently employed at a law firm.  These issues include dealing with the psychological aspects of losing a steady paycheck, figuring out whether you can (or want to) continue your current law firm practice specialty as a solo and how to do so and learning how to negotiate an amicable departure from your firm, without running afoul of ethics rules or harming your chances for future referrals.  In writing my book, I discovered that these topics have not received much attention in most of the other literature on starting a practice.  So please sign up - I'm really looking forward to this event.

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Update (5/10/08) - I have changed my position on this and updated it here.

Update (5/7/08) - a commenter points out that the associate did not send the memo to Above the Law, but instead, that it was circulated by another attorney.  This makes the story more unfortunate, because the associate may not have wanted so much widespread publicity.  On the other hand, in an Internet Age, most of us have to assume that any inflammatory emails that we send are destined for broader publication. 

Make no mistake, mega-law firm Paul Hastings acted insensitively, boorishly - and possibly even unlawfully - in terminating this associate six days after she suffered a miscarriage and then pretending that the firing was merit based.   But by publicly venting about about her termination at the heavily trafficked Above the Law website, the associate made her own situation far worse than the firm that let her go.  Here's why.

According to its website, Paul Hastings has 1200 lawyers, some of whom might have tried to help this associate find a new job.  Some might have sent her referrals had she gone to another law firm or started her own, thus helping her build a porfolio of business which could advance her career.   And while the work might have come because of a belief in her merit or out of guilt for having done her wrong, what's the difference?  In any event, this associate will never find out what could have been, because she burned those contacts with her incendiary post.
Continue Reading...

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I've written previously about the importance of  saying nay to the naysayers - you know, those folks, some jealous, some just well-intentioned - who tell you that you won't succeed in starting a law firm.  Pesky as these external naysayers may be, the truth is, they're only part of what's holding you back.  In many cases, the biggest naysayer is you!

For example, how many times have you rejected a marketing technique out of hand, such as cold-calling (too cheesy) or blogging (too time consuming)  without trying it or coming up with a way to make it work for you?  If you practice at a large firm, do you simply assume that you can't handle the same lucrative, biglaw practice area on your own because no one else is doing it?   And believe me, I'm as guilty of naysaying myself as anyone.  Indeed, just now, I am training myself not to reflexively reject ideas out of hand merely because they're off the beaten track or out of the box or contrary to conventional wisdom.

What's really inspired me to stop naysaying myself, however, is this recent story about Randy Pausch, the former Carnegie Mellon professor dying of pancreatic cancer whose on Last Lecture about living your childhood dream has captivated and inspired millions.  Jeff Zaslow, the Wall Street Journal reporter who helped break the story, asked Pausch to memorialize his lecture and other life lessons in a book.  But Pausch initially declined, explaining that he wanted to spend his remaining time with his family.  So Zaslow and Pausch came up with a plan.  Each day, Pausch rode his bike an hour a day as a way to maintain his health.  It was time spent away from family anyway, and necessary to Pausch's well-being.  Pausch would wear a cell phone headset during his rides, and during that time, he'd talk about his life, his family and his lecture to Zaslow, feeding him information for the book - which was just released.

If a dying professor intent on spending every waking minute with his family during his last months on earth can find a way to write a book, well then, there's hope for all of us.  So long as we focus on figuring out how to do what seems impossible or infeasible, rather than complaining about why we can't.

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Imagine having your bar licenses suspended for two years over a measly $175.  Sadly, that's what happened to this unfortunate Ohio attorney (Respondent) who accepted referrals from United Financial Systems Corporation (UFS), a national wealth management company.  As described in this grievance decision by the Supreme Court of Ohio, UFS representatives used non-lawyers to meet with prospective estate planning clients.  The non-lawyers would obtain personal and financial information, which they would transmit along with the the $2495 payment to UFS.  At that point, UFS would assign client files to attorneys to prepare the estate documents. 

In this case, the Respondent, who was barred in Ohio, handled matters for UFS clients who lived in Ohio and continued to do so after she relocated to Michigan in April 2005.   She received $175 for preparing estate planning documents.  In March 2006, she ended her affiliation with UFS in March 2006, after realizing that her conduct violated disciplinary rules, such as the prohibition on fee-splitting with non-lawyers, failing to safeguard confidential information and aiding in unauthorized practice of law by non-lawyers.

Still, the Respondent's resignation did little to quell the vengeance of the Ohio Bar Association who filed a complaint against her in August 2007, more than a year after she ceased taking UFS clients.  And even though the Respondent had no prior disciplinary record or dishonest or selfish motive and cooperated during the disciplinary proceedings, she was suspended from practice for two years!

Though I fault the bar entirely for the suspension, there's much that the Respondent could have done, and which other lawyers can do, to avoid this fate.   First,  even though legal ethics are complex, you can't check your common sense at the door.  This kind of arrangement - where a lawyer gets a $175 piece of a $2495 fee - should have raised a red flag.  Likewise, delegating collection of personal and financial information to a UFS representative rather than having the task done by the lawyer or one of her employees should have triggered questions about confidentiality.
When it comes to arrangements with non-lawyers, if you can't definitively confirm that the arrangement passes ethical muster, then walk - no run - away.  Losing $175 is a trivial price to pay to keep your license and preserve your career.

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