My Shingle : MyShingle : Solo and Small Law Firm Management and Marketing

I've finished reading Malcolm Gladwell's Outliers which argues that a variety of factors, such as luck, era of birth or family support account as much for success as sheer talent.  After all, what explains the break out success of certain individuals with innate talent in comparison to the mediocre performance of those equally endowed? 

If you haven't read Outliers, Gladwell's premise sounds depressing.  After all, what's the point of working hard if our fate is determined by factors beyond our control?  But I take away the opposite from Gladwell and find his observations enormously helpful.  For once we realize that other factors besides merit account for success, those of us who are less talented can replicate the kind of environment that is conducive to success through the company we keep.

Obviously, we can't recreate our own families, or re-live our childhood.  But what we can do is surround ourselves with good company -- friends and colleagues and peers and mentors who support and motivate and inspire us.  That's especially important in solo practice.  I wonder how many talented young lawyers have been deterred from starting a practice because they encountered only naysayers along the way rather than lawyers who supported and nurtured their vision.  How many lawyers fired from a job have left the law in shame, tail between their legs, feeling as if they'd failed when with the right encouragement, they could have opened their own firm and made a real difference in the lives of clients and to our entire profession. 

I'm often asked what matters most in starting a law firm.  Is it resources or sheer talent or powerful connections?  For me, two characteristics matter most.  First, doggedness (another Gladwell success factor) - that persistence to keep at it just like a dog with a bone.  And second, community -- those solos who have spouses who cheer them on or their proud parents who rave about their son or daughter, "the lawyer with his/her own firm."  Show me a solo who's willing to work crazy-hard with a strong support group in place versus one who's read all the latest marketing books and hired the first rate experts to draw up a business plan and create a fancy logo and brand and I'll place my money on the dogged, every single time. 

As for me, I'm fortunate that I've never lacked the support that I needed to start my own practice, and then this blog.  First, it came from my husband who in the early weeks of my practice, bought me the laptop that I didn't think we could afford that enabled me to work in the library or on the upper levels of our house instead of in the damp, dark and depressing basement.  (My husband also had the original idea for setting up this site, originally conceived as a portal, as a blog).  More recently, I've found positive reinforcement in my various on-line communities -- the blogosphere, Solosez, my own little mastermind clique and more recently Twitter -- all of which have kept me surrounded, nearly 24/7  with people who just dazzle me with their writing skills and wit and accomplishments and who generously share wisdom and knowledge and encouragement.  How can anyone fail in that kind of environment?

For 2009, I wish the gift of good company for all of you current solos as well as those of you who are thinking about making the leap to solo practice.  This is my last post for 2008, so have a wonderful New Year.  I'll see you on the other side!

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UPDATE - ENCORE TELECONFERENCE from Biglaw to Yourlaw - JANUARY 9, 2009 (Thursday) at 3 pm EST. Sign up below.  IF YOU HAVE  ALREADY SIGNED UP YOU WILL AUTOMATICALLY RECEIVE INFORMATION ON THE CALL VIA EMAIL.

Given that 1762 lawyers lost their jobs in 2008 according to the Law Shucks Layoff Tracker, I decided to release a new e-book entitled From Biglaw to Yourlaw. You've always believed starting a firm was a last resort.  Now, it may be your only resort.  My only goal in the book, which gives an overview of the current economic situation and dispells some of the myths associated with starting a firm, is to convince large firm attorneys to view starting a law firm as a viable option.  I also wanted to provide an objective view of starting a practice - neither the naysaying, "it can't be done" perspective of law schools and large firm lawyers nor the "you can work 4 hours a week and earn gazillions" perspective of some disreputable marketers and gurus.  As with everything else, reality lies somewhere in between.

If you'd like to download a copy of the book and get the dial in number for a FREE CONFERENCE CALL on From Biglaw to Yourlaw, just sign up below (if you already signed up previously, you should have received the e-book in a follow up message).

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And so, another biglaw firm -- this time, 150 year-old New York based Thacher, Profitt -- comes tumbling down.  But though the names may change (think Heller, Ehrman, Thelen and Brobeck.com) the circumstances are virtually identical: 

Step 1:  Each firm suffers some kind of economic crisis. 

Step 2:  Rainmaking partners panic and begin to jump ship, taking valuable business with them (See WSJ Law Blog, here and here and Legal Pad, here)

Step 3:  Remaining partners can't figure out how to reorganize so they pursue mergers with other firms which not surprisingly, have no interest in assuming liability for another firm's economic woes;

Step 4:  Merger talks break down, and more partners jump ship; while other firms (including those that those that spurned a formal merger or previously dumped their own unprofitable practice groups) cherry pick the lucrative remains while leaving the rest of the lawyers and staff to fend for themselves.

To a solo like me, this kind of behavior is incomprehensible on so many levels.  For starters, I thought that law firm partners were owners.  If that's the case, why don't they behave that way?  My firm has gone through rough times where I've thought about throwing in the towel.  But I've got too much of myself invested in this venture, and too much I still want to accomplish to ever abandon my firm in a heartbeat.  Plus, figuring out new ways to solve old problems like clients who don't pay or clients who jilt me after their first influx of venture capital is one of the most exciting and challenging aspects of running a firm.  And I'm not unique either; my fellow solo and small firm colleagues share this same drive to constantly improve and innovate. 

Second, no offense, but engaging in merger talks when your firm is floundering seems kind of silly.  I'm assuming that any firm looking to merge will engage in due diligence, which means that the failing firm will be forced to divulge its secrets, such as which practice areas are profitable and which aren't.  Once the acquiring firm learns where the sweet spots are, it has no incentive to acquire the whole firm and will instead, take on only the most lucrative parts.  In contrast to conventional business, where parties negotiating a merger could implement some kind of non-compete to prevent cherry picking, ethics rules don't allow firms to restrict lawyers from moving to other firms and taking clients with them.  

Finally, after going through the demise of one firm, why do lawyers reflexively jump to another firm and take the risk that the same thing will happen again, instead of striking out on their own?  I believe that In spite of all that's happened this past year, many lawyers still foolishly believe that law firms offer security, a hedge in bad times.  But it's false security. As I've written before, law firms' diversity is illusory: sure, they offer different practice areas, but success depends on clients' ability to pay high fees.  So when the economy tanks, the whole firm goes down as well.

True, solo practice offers no security.  But the security that biglaw offers is false, and that's far worse than no security at all.   False security lulls lawyers into inaction, makes them believe that someone will take care of them in tough times instead of gearing up to take care of themselves. 

If you are a large firm attorney - either a partner or an associate - I urge you to consider starting your own firm, now.  In fact, I feel so strongly, that I'd like to offer a special end of the year teleseminar/webinar on DECEMBER 30, noon EST on starting your own firm.  I know that many of you at large firms believe that solo practice means handling estates, family law or consumer cases and that is certainly an exciting option.  But you can also take your existing biglaw style practice to your own firm.  My own practice specialty is energy regulatory work, a traditionally "large firm style" practice area and I've worked at large firms (though it's been a long time ago now), so I am familiar with your the fears and concerns of those considering a move from "biglaw to yourlaw."   At the same time, because of my background, I'm also familiar with the unique advantages that a large firm attorney can bring to your own practice. 

Why do I want to do this? Because I am frustrated at seeing large firm lawyers make the same mistakes again and again.  Moreover, I don't want to see the legal profession lose talent. I would hate to have so many lawyers who sought a career in law give it up because they just don't know what the alternatives are.   Trust me, I'm not going to talk you into starting a firm or try to sell you anything.  I just want to share some information and assure you that it can be done if you decide to do it.  If you don't want to call in, consider reading a copy of my book, Solo by Choice (click on sidebar) - you can either order it from Amazon or find it in a local law libraries.

If you register below, you'll receive the information for a dial-in or log-in number on December 29, 2008. Please feel free to email me at carolyn.elefant@myshingle.com with any questions.

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I've decided to extend our 6th Birthday contests another week, through December 30.  The details are here but basically, you can write a post on one of two topics:  either "Why I (or my law firm) matters" or how I use technology in my practice to serve clients.  By submitting, you will be eligible to win an Asus subnotebook computer AND I'll publish the top posts at my blog.

For those of you who have written asking for sidebar links, believe me, entering this contest will give you much more mileage.  I'll have a separate tagged category for entrants and you will get great SEO.  Most importantly, you'll help inspire others.

So whether you're an experienced blogger or a newbie solo, jump on board!

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I've been reading Malcolm Gladwell's Outliers, which explores those factors that contribute to extraordinary success.  Though I'm not quite finished with the book, I've already found so many nuggets that help explain why some lawyers who start a law firm experience wild success while others flounder.  I'll share some of these reasons after I've finished the book, but for now, I'll focus on just one factor that matters:  fulfillment.

Some experts would have you believe that you can snap your fingers and poof - without breaking a sweat, a successful law firm materializes, one where you work four hours a week and earn hundreds of thousands of dollars.   That's not the way starting a firm works, at least not in my own experience.  And in fact (and this is something that in a world full of Four Hour Work Week wannabees, I'm almost embarrassed to admit), I wouldn't even wish for a magic potion that would produce an insta-lawfirm because putting in the work is what makes starting a firm so rewarding to begin with.

Of course, long hours doesn't have to mean drudgery, and that's what Gladwell emphasizes. Those who find grand success don't shirk work; they embrace and celebrate it because it doesn't feel like a burden to those who love what they do.  Writes Gladwell (p. 159):

[...]being an entrepreneur -- as cutthroat and grim as it was -- allowed people like the Borenichts (a successful garment industry business family) just off the boat, to find something meaningfull o do well.  When Louis Borgenicht came home afer first seeing that child's apron, he danced a jig.  He hadn't sold anything yet.  He was still penniless and esperate and he knew that to make something of his idea was going to require years of backbreaking labor.  But he was ecstatic, because the prospect of those endless eyars of hard labor did not seem like a burden to him.  Bill Gates had that same feeling when he first sat down at the keyboard at Lakeside.  And the Bestles didn't recoil in horror when they were told they had to play eight hours a day, seven days a week.  They jumped at the chance.  Hard work is a prison sentence only if it does not hav meaning.  Once it does, it becomes the kind of think that makes you grab your wife [or husband] around the waist and dance a jig.

You know what it feels like to dance, don't you?  Those nights where you spend eight or ten hours on a brief that fly by in seconds, or those mornings when you wake up and can't wait to get to work, or the moments when your thoughts fly straignt from your brain to your keyboard, manifesting in a blog post that rocks your audience. 

Finding work that makes you want to dance a jig doesn't guarantee extraordinary success.  But it's an integral part of being an outlier.  And more importantly, even if you don't succeed, at least you can take satisfaction that the trip was worthwhile. 

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May you live in interesting times... -- Chinese Proverb

No doubt, today we live in interesting times, where 250 lawyer firms vanish overnight, where the legal trade press goes from an obsession with PPP (partners per profits) to LPL layoffs per law firm, and where top lawyers are pounding the pavement for work.  But what's so interesting about the proverb "may you live in interesting times" is that it's at once a blessing and a curse.  And while disastrous news flies around us, at the same time, there's opportunity if you take the time to look.

The good news is that when it comes to marketing ideas, you don't need to look much further than the newspaper, Twitter or your RSS feed.  In fact, in today's news alone, I stumbled across a couple of interesting practice niches that can work right now:

1) Over at Legal Blogwatch, I posted about a large law firm that started a law practice area on issues arising out of the Bernie Madoff Ponzi scheme;

2) Today's Wall Street Journal carries an article about how more women are donating eggs and serving as surrogates to earn money in an economic downturn.  That means there's potentially an increased demand for lawyers who handle surrogacy and donor issues;

3) New York is planning to tax music downloads, which could raise all kinds of legal issues for site owners who sell music, universities (who may want to advise students on the implications of downloading music) as well as potential constitutional issues. 

4) And, from Bob Kraft's P.I.S.S.D. blog comes news that the government may raise the attorneys fees cap on SSD cases - which could possibly make them more lucrative for lawyers (it's not a huge increase).

And that's just from a day on my RSS and Twitter.  What kinds of riches might today's news bring to you?

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With the law firm of Dreier LLP on the brink of collapse as the result of founder and sole equity partner Marc Dreier's multi-million dollar criminal fraud, the firm's lawyers are learning first hand that if  a work situation sounds too good to be true, then it probably is.  Not only will many Dreier lawyers find themselves out of a job but they also face considerable personal liability exposure if Dreier's victims sue the firm, because Dreier allowed the firm's malpractice insurance to lapse, reports the New York Times.  

So how did some of New York's "best and brightest" wind up in this precarious situation?  Because Dreier sold them a bill of goods, convincing lawyers to let him handle the business end of the firm so that they could focus on the practice of law.  From the Times story:

Dreier was the only equity partner in the firm, and deals were structured so that only he knew all the specifics and had access to all accounts, people with the firm said in court papers. Dreier persuaded lawyers that such an arrangement was best by stressing that it would allow them to concentrate on their first love, the law, while he worried about running the firm. There would be no executive committee. No partners meetings. Dreier would handle all administrative chores.

I'm not sure why this proposed arrangement didn't set off any alarm bells among firm partners.  Surely they must have realized that as partners in a firm, they could face malpractice liability for their partners' mistakes.  But instead of thinking rationally, these lawyers buried their concerns, allowing themselves to buy into the illusion that one can simply practice law without any regard to the messy business of running a firm.

In starting a practice, many new solos may find themselves faced with all kinds of too good to be true propositions from unscrupulous lawyers.  Some may offer to provide office space in exchange for a few hours of work a week, then turn around and expect you to work 25 hours a week to meet your rental obligation.  Or a lawyer might invite you to rent space in his suite saying, "Oh, we could use a family lawyer here for referrals," and then six months later, when your business picks up, the lawyer may open his own family law practice and compete for your clients.  In another situation, a lawyer rented space to an acquaintance of mine, and started asking him to sign the pleadings.  Turned out the lawyer had been suspended from practice, and was using the acquaintance as a temporary front to allow him to continue to practice.

Bottom line:  analyze every proposal that you receive with the same due diligence that you'd extend to a client.  Get references on the lawyers involved and ask for an unbiased opinion from the bar's law practice management advisor, a trusted colleague or even your spouse or a friend.  As the Dreier situation shows, too good to be true can quickly morph into worse than you ever imagined.

Readers - please share your own horror stories below.

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Spurred by this post by blogmaster, Grant Griffiths and my recent sixth birthday, I've been rethinking the role of my blog roll as I begin a significant overhaul this site.  Originally, my blog roll had two components:  resource links, intended to provide information on other sites that would provide useful information or insights to my readers and other shingles links, intended as a way to highlight solo and small firms and share my SEO. 

As originally designed, the shingle link wasn't  a freebie - I'd ask every person who wanted a listing to commit to reviewing at least three of the other listed blogs and to actually contact at least one other person on the list.  It was an honor system, of course, but I did hear from several participants who found the experience worthwhile. 

These days, however, linking isn't about building community or resources.  Instead, it's all about SEO, building links to build exposure and as such, the links are growing meaningless.  At the same time, I still remain committed to giving exposure to solo and small firm lawyers.  So....

As part of my overhaul, my Other Shingles blogroll will come down from the front page.  I may create a stand alone page for it, or adopt the submit yourself option that Grant recently implemented as his site.  For the time being, however, the best way to gain exposure at my site is to earn it!  I am running two contests -- an essay contest (with a choice of Why I (a Solo/Small Firm/Independent) Lawyer Matter or How Technology Has Improved the Way I Serve Clients and/or Practice Law) and Twitter the Day Away.  These are real contests, with real prizes - an Asus computer or bottle of wine (not just a free ebook or even a copy of my book, Solo by Choice).  You'll get a by-line in the post header that is likely to wind up on the first page of Google search ranking (of course, this isn't  a guarantee)  And I'll publish all the essays that I deem worthy, not just the eventual winner.

Not to be cynical, but I'm betting I won't have many takers.  Why?  Because many people don't want to work for SEO.  They'd rather spend money and hire someone to do it for them (often, with embarrassing results) or spam the top bloggers with requests for links or submit a canned, promotional post.  Those practices won't work here.

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Close to midnight six years ago, I pushed a button and with this post, launched MyShingle into cyberspace.  I didn't have a grand plan or scheme -- to be honest, I hardly qualified to write a blog about solo and small firm practice.  Back in 2002, Foonberg dominated solo-land as the only game in town with his one-size fits all eponymous rules on how to start a law practice.  Moreover, I didn't fit the mold of a successful solo by any stretch of the imagination.   I started my practice in 1993 not by choice but out of desperation.  And by the time I started this blog, I'd given up my downtown office following the birth of my younger daughter and worked from a make-shift home office, forever scrambling to cram my energy regulatory law practice into the confines of my six and three year old daughters' schedules. 

Six years is a long time, even longer in Internet years.  Blogging has gone commercial, viewed as much as a marketing tool as a means of self-expression.  The world has also changed, and today, practicing law from home is so cutting edge cool that it's been rebranded as virtual practice.  And my world has changed; my little girls are independent nine and twelve year olds who can walk home from the bus stop on their own, manage their homework and even cook dinner.

But six years later, MyShingle remains.  I've thought about stopping, was sure I would after Solo by Choice, but I how can I?  As I wrote here, "more than any other incentive, imagining my audience inspires me to keep churning out copy, week after week, year after year." I'm drawn to the heroism of solos doing their job and the ever present possibilty for solo and small firm lawyers to truly soar.  I also can't stand to see the talent driven from our profession by those who feel they have no alternatives, and never thought for a second to consider starting a practice.  Despite the often tough realities of life as a solo, I can't help being a cheerleader (or whiny, irrational adolescent!) for hanging a shingle.

There's another element that keeps me in the game as well.  I've got a bird's eye view of how the legal profession is changing at a time when we stand on the cusp of major transformation.  And while some predict the end of lawyers, I believe emphatically that for us solos, this wll be our finest hour.  Empowered by technology and liberated from the profession's bias against the small fry, we solos will bloom. 

In the coming weeks, you'll see some changes at MyShingle including the relaunch of the ever popular the Bars, Reviewed and updates to our Online Guide.   In honor of my birthday, I'm sponsoring a contest, and a challenge.  For the contest, you have a choice of writing a blog post on one of two topics.  The first is, "Why I Matter," explaining why or how you, as a solo or small firm lawyer have made a difference in the legal profession or lives of clients, or what your raison d'etre is for practicing law.  The second is "How Technology Helps Me Serve Clients or Make A Difference," describing how technology has improved the quality of service that you provide to clients or helped you attain better results.  By the way, the contest is only open to practicing solo and small firm lawyers (including those with contract law practices, of course)  There's a fabulous prize -- an Asus subnotebook computer.  (Why a computer?  Because that's all you need to change the world.  However, I'm not going to pick a winner or ask you to vote for the winner.  Instead, I'll cull the top submissions (all of them, if it warrants) and pick the winner randomly from that group.  As added incentive, bear in mind that I'll post all of the qualifying essays along with your name and website or blog - and trust me, after six years, I've got better SEO than you could ever buy!

As for the second contest, it's more light-hearted, I hope.  In an information-saturated age, more and more we're collecting data on the minutia of our experience.  So I'm calling on all of you solo and small firm lawyers to pick a day between now and December 20 to Twitter the day away.  Try to pick a day that's typical for you as a solo or small firm lawyer, that shows how you balance your life, your cases and your clients.  The prize here - a bottle of wine, to be selected from recommendations that I'll solicit on Twitter.  As with the essay submissions, I'll post all "day in the life" Twitters with attribution.  Email all submissions to elefant@myshingle.com.  Submissions due by December 23, 2008, with winners announced by January 2, 2009.  If nothing meets my selection standards, I reserve the right not to choose a winner at all (but I doubt that will happen).

Thank you readers for these past six amazing years and to solo and small firm lawyers who make me proud to be a solo by choice.

By the way, if you're new to this site, feel free to download my free ebooks, Inspiration for Lawyers and Social Networking for Lawyers.

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[Note - post has been updated as of 12/8/08] Via Twitter, I discovered this extensive list of law office practice management and technology tools at Practicing Law in the 21st Century, the joint production of the ubiquitous Niki Black, as well as Greg Bell and Matthew Lerner.  Perusing the list, I wondered: with technology so greatly in flux at this time, does it make sense for a new solo to invest in a complete law practice management solution or to cobble together a bunch of tools and wait a year or two to see which products emerge ahead of the pack.  Alternatively, should solos jump right in and avail themselves of some of the fairly comprehensive software as a service law-specific tools that have already emerged?  Simply put, do we go with a complete, cobbled or cutting edge solution for law practice management technology at a time when new systems are emerging at breakneck speed.

Used to be when lawyers opened a practice, they'd invest in a desktop based tool like Amicus, PC Law, Tabs or Abacus to name a few.  One system could organize files, keep the calendar, check for conflicts, manage contacts and automate most of the administrative tasks necessary to keep the office running smoothly and to avoid malpractice.  Trouble was, these systems though moderately priced for small firm offices weren't exactly what you'd call user friendly.  Often, lawyers might spend long hours getting the programs installed or would need to retain pricey consultants to get the job done.  At the end of the day, a firm would have a complete solution - and one which it would be inclined to keep permanently simply because of all of the start-up costs involved with the set up.

By contrast, many of today's web based, Web 2.0 tools are incredibly easy to use.  Some of the tools, while not specifically geared for lawyers are incredibly cheap and can be pieced together for a more comprehensive solution.  Others tailored for lawyers are comprehensive and powerful, but are just emerging and continuing to add new features.  (They're also usually more expensive than the non-lawyer based tools).  Given the rapid changes, should a new lawyer spend the money and invest in what's best available now?  Wait a few months or even a year and rely on existing free tools to get a sense of where the practice is headed and then make a decision?

Everyone's answer will differ but from my perspective, I don't think it's worthwhile to purchase any type of desk based tool right at this time - and if you do, you must have an exit strategy, i.e., a way to make the transition to a web-based system, in mind.  As for cobble versus cutting edge, I think price and security are two factors to consider, but beyond that, the right choice depends on your practice. The beauty of all of these online tools is that they're relatively easy to test drive through online demos.

What's your law practice management strategy for the next two years?  If you're just starting out, will you complete or cobble or embrace the cutting edge?  And if you already employ traditional, desk top practice management tools, are you making plans to switch over to web based apps?  Post your comments below.

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Peter Olson's Solo in Chicago is another one of those great, unsung blogs that's been running for years, seamlessly marrying tips on starting a practice with Olson's own experiences.  A few days ago, Olson posted a link to an article by legal consutant Ellen Freedman from the ISBA journal (not publicly available) entitled Don't be Afraid to Get Paid.  The post goes through the expected practices such as billing early and consistently, discussing the importance of payments with clients and coordinating with the client's billing cycle.  Though most of us have seen this kind of advice, we often fail to implement it. 

Freedman's last tip however, is one that's new to me:

Despite your best efforts, some clients may never pay their bills. So, “When all else fails - REVENGE IS SWEET!” reads one of Freedman’s presentation slides. Explaining, she suggests, “Wait until the statute of limitations for malpractice claims has passed, and then wait until November 15th.”

Then, she continues, you can send your debtor client a letter saying it’s clear that, despite your pleas to discuss the matter, that the client has no intention of paying your bill and, therefore, has left you with no alternative but to forgive the debt. “We will be sending you a 1099 for the value of the services and the costs that we are removing from our books.” On receiving such a letter, she says, many people will be so scared that they will actually send the lawyer a check.

I'm sure others will disagree but I don't like this tip.  At all.  I have no problem with a lawyer suing to recover fees from a client who hasn't paid.  But if you're going to do it, do it the right way: ask for payment nicely, then ask agai.  If the amount remains unpaid and if the balance is too large to write off, retain a firm that specializes in attorneys fees collections and let them have a crack at recovering the fee and filing suit if all else fails (don't ever file the action yourself).  What you shouldn't do is sit around stewing until the malpractice statute of limitations runs -- which may be as long as two or even three years -- and then turn around with this kind of a gotcha.  (As an aside, it's not clear from the advice whether Freedman endorses actually sending the 1099 or just threatening to do it, but as far as I'm concerned, it's one and the same, and indeed, threatening to take action that you will not carry out may violate other ethics rules).  What's the next step -- calling the IRS to tell them off to audit your client to make sure he or she paid taxes on the forgiven debt?

The other issue is secondary.  In many (by no means all), but many nonpayment cases, lawyers rather than clients are to blame.  How so?  Because sometimes lawyers run up a bill that they'd have realized the client could never pay if they'd have listened to the client at the outset.   I recently encountered this kind of situation where an individual retained a large firm for a relative minor matter.    The firm had been recommended by a friend who was a longstanding client of the firm.  At the first meeting, the friend came along and told the firm that his colleague could only afford a certain amount.  The firm agreed and offered an estimate commensurate with the individuals needs.  But when the case started, the bills escalated out of control because of the strategy that the firm had taken which included substantial double teaming. The individual complained of the bills as did his friend, the longstanding firm client, but despite the pleas, but the firm insisted on pursuing the course it had in mind - and by that time, the client did not feel that he could pull out.  At the end of the case, the client ran out of money, owes a substantial amount of money to the firm, which the firm has thus far, not pursued.  However, if the firm pulled this kind of 1099 stunt in this case and I was in that client's shoes, I'd be utterly furious.

Don't misunderstand me - I am not claiming that lawyers don't deserve to be paid.  Moreover, I would argue that if we want to be paid, we must implement measures to ensure that result, such as moving towards flat fees (which give clients certainty so they can budget for the bill) and transparency in billing (setting budgets, keeping clients apprised of costs and modifying as necessary moving forward).  But getting paid and getting revenge are two entirely different matters.  I'm a lawyer, not a mobster.

UPDATE - After receiving the below comment, I investigated this technique further and saw this post at Ellen Freedman's blog entitled revenge is less sweet (11/13/08).  Apparently, the IRS only permits financial institutions and not law firms to write off debt - yet nevertheless, Freedman has this to say:

Now of course, the average client, even the highly educated client, probably has no clue that the 1099-C is designated for use only by financial institutions. They also have no clue that the 1099-MISC is an inappropriate form to use. So theoretically, the method can still intimidate many clients into paying. The real question, Donna raised, is whether or not a law firm can knowingly file an inappropriate tax form, and what the IRS might do about it.

[To be fair, Freedman notes that because of the problems with the IRS, she can no longer recommend the "sweet revenge" strategy].  This comment encapsulates clearly what I regarded as improper: use of the 1099 to intimidate clients.  I have no problem with lawyers writing down debt (if it's permissible) as a legitimate business tool, just as suing a client for non-collection is entirely appropriate.  But to use a 1099 to coerce a client to pay isn't at all appropriate in my view.

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I've posted before on the value of a niche practice to a successful law practice, but two items in today's news make me realize that it's time for an encore.  First up, this Los Angeles Times story describes a 26 year old biglaw associate who heads a team of lawyers at a large firm -- all because he came up with the idea of a video game practice area.  Today, the group handles a variety of issues, including licensing, IP, legal issues related to virtual worlds, contracts, tax, immigration issues associated with foreign workers and consumer fraud and class actions.  Second, here's a story
 about Texas lawyer Zandra Anderson, who decided to spealize in dog law, after she was pushed out of medical malpractice and personal injury work by tort reform legislation.  Today, she has a statewide practice, Texas Dog Lawyer.com.

Most lawyers resist niches, fearing that they're too limiting - both intellectually and from a marketing perspective. As to the first point, niches, though deep also run broad.  Most niches require knowledge of a variety of cross over practice areas.  For example, a dog lawyer encouters issues related to wills and trusts (i.e., who will take care of a dog after you're gone); custody in divorce cases not to mention regulatory issues governing veternarian practices or animal control and of course, dog bite cases.  In many cases, a niche lawyer may need to team up with other attorneys to handle these diverse issues.

A niche also makes you more marketable, not less because it makes you memorable.  Here in DC, one of my colleagues David Kaufman is an attorney who does Business Brawls - litigating business deals gone bad.  I've been at networking lunches and even though there may be 20 other people who do litigation, the one person everyone remembers is David or "that business brawls guy."  Though I've never asked him about it, I'm sure that he winds up getting other types of litigation matters just because of the memorability factor.

Niches have at least two other benefits.  First, they give you broader range.  As a niche attorney, you can often capture a state wide or even national market instead of just competing on a local level.  Second, niches are great for the ego because they allow you, in the words of Seth Godin to be "the best in the world," even if that world is narrow.  For a lawyer starting out, being the best "event and party planning lawyer in Illinois" or the best entirely virtual, non-profit lawyer in the country can offer a huge boost to the ego. 

Remember, you don't have to do the niche all the time - starting out, your niche may not account for more than 10-20 percent of your revenue.  But even a narrow focus can get you broad exposure for your entire practice.

Do you have an interesting niche, or idea for a niche?  Please share it below.

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Once a cutting edge solo lawyer before moving on to new ventures, Matt Homann hasn't forgotten what it takes to succeed.  And he's boiled them down here with Confuscious-like insight, precision and brevity.  Though I like every point, I think my favorite is the last: 

There is no shame in going solo.  Your clients don’t care that the legal market tanked, that you got laid off from BIGLAW or that you “wanted more time to spend with your family.”  They have their own problems, and are looking to you solve them.  When you do, you’ll both profit.

Take a look at the rules and let me know which you like best.  Or whether you'd add others to the list.

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For the past few decades, biglaw had a good thing going:  a seemingly sustainable pyramid scheme.  Large firms hired top talent and fed their appetites and egos with top salaries and assurances that these new associates constituted the cream of the legal caste system.   Then, the firms turned around and billed the heck out of their young subordinates, racking up huge PPPs with a sense of arrogance and entitlement that blinded them to the possibility that this highly leveraged model could ever fail. Too bad biglaw never took the time to observe or learn from us savvy solos.

See, because we solos don't have an army of associates against which to leverage our hours, we learn very quickly to leverage ourselves.  What that means is rather than rely on costly, highly paid labor to amplify our billable time (not hours, time - which is my second point), we solos use technology and outsourcing to extract more value out out each hour of work we perform.  With a virtual assistant (and I have an excellent one), I can hunker down and focus on client work that demands my unique expertise, while my assistant can keep my trade association (another revenue maker) up and running or ensure that I'm constantly submitting proposals for work from new clients (yes, I know RFPs aren't ideal, but that's how certain aspects of the energy biz work).  As a result, even while I'm working on one project, I'm generating or at least stirring up the potential for revenue from others, so I'm super-charging the value of my time.  Just as partners do with associates, only that comes at a much higher cost.

But we solos don't just implement principles of leverage.  Those who are most successful also diversify (which is also another way to leverage our time, as I discuss below).  While I'm sure that biglaw will insisting that "hey, we diversify also.  Look at all these practice areas we offer - employment law, probate, corporate securities, etc....," that's not what I mean by diversity.  Instead, I'm referring to the concept of diversity as applied in the investment context -- as a means to spread risk around.  An investment portfolio that holds stock in 50 different high tech companies may seem diverse because of the number of different holdings - but most of us realize that it's not, because the portfolio places all bets on one industry.  By contrast, a portfolio with just 5 investments but all in different instruments of varying risk (i.e., stock, mutual funds, bonds, gold or real estate holdings) may seem more limited in terms of holdings, but is actually more diverse because of the different character of each investment.

Like the high tech stock portfolio, biglaw's so-called diversity is illusory.  What's the point of offering 50 different practice areas if they're all premised on the billable hour?  When the economy tanks as it has now, clients reach a point where they can't afford any of the firm's offerings.  In short, multiple practice areas don't provide much of a hedge against a poor economy because when the economy hits rock bottom, all of those services are priced way out of most clients' range.

By contrast, smart solos diversify - for real - both in fees charged and products and services offered.  As to fees, most solos offer a variety, from billable hour to flat fees to phased fees (flat fees for different phases of a protracted process) to value based billing or reduced fees with success bonuses and of course, the good old contingency fee.  Different fee structures mean that clients can always find some service in their price range, which insulates us in a downturn.  Few solos I know (myself included) who offer these varied billing structures have even had to cut rates much, if at all even in the midst of this economic turmoil. 

Fees, however comprise only one component of diversification.  Solos are also diversifying the products they offer, many times through leveraging existing expertise.  For example, many family law or estate lawyers provide full service to clients, but also offer unbundled service to clients who can't afford or don't want more.  Unbundled services diversify a practice and guard it against economic downturn, but it's also a form of leverage:  because lawyers already have deep familiarity with certain practice areas, it doesn't take much effort to squeeze more value out of that knowledge by providing it in an unbundled package.  Tollbridge agreements which provide a small service on an ongoing basis are another way for lawyers to diversify their revenue stream.

Diversification can also take the form of different side businesses.  In my own case, in addition to my law practice, I generate a small amount of revenue from this blog (which I hope to increase over the next few months) as well as from work with a trade association that I formed.  Some lawyers offer for-fee seminars on their practice area, coach other lawyers, help them market law practices or build legal reseach and writing outsourcing services.  Some even go so far as to develop software products or other technology that enable lawyers to run practices efficiently.  Some solos ghostwrite for other companies or even operate businesses totally unrelated to law practice (such as party planning or leasing companies) that bring in money without detracting from the practice of law.

So to my fellow solos, I say, "leverage thyselves!"  I'd say the same to biglaw, but I know that despite my inclusion as an ABA Top 100 Blawg (had to throw that in somewhere, but it's the last you'll hear of it), that there's no one at biglaw listening to a solo like me. 

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