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

I try to respond personally to the many emails that I receive from readers, but every so often, the email raises a question that has broader interest to other readers, so I post it here.  Here's an email that I recently received, with my response - but I welcome you to chime in:

Q:  I am a second year corporate associate at a biglaw shop in a major city. Along with a significant number of colleagues, I have been let go because of the economy.   Though I did not think about it before, I am now seriously considering hanging out my shingle. I don't have a great deal of experience, but I hope to make up for that with ability, hard work and personality.

I have a question that, I hope, might of interest to some of your other readers. In short, if I were to open my own practice, I would like to cater primarily to business clients, doing contracts, M&A, real estate and corporate governance work. I realize, however, that cultivating business clients takes time. Though I have some entrepreneur-friends who, I am assured, would hire me in a heartbeat, my bread and butter in the first year or two would probably be referrals and walk-ins more typical to the solo I would become - wills, divorces, residential real estate, personal injury.

My question is this: is it a feasible business model to sustain a practice in the short run with consumer matters while developing business contacts for later specialization? My concern is that by building expertise in areas that don't pose a long term interest, I would pigeonhole myself and never quite become a business lawyer.

Put another way, should I (a) open my doors and start developing business clients, while "eating what I can" in the meantime, or (b) invest more in client development prior to opening up?

If you are fairly certain that you would like to handle transactional and corporate matters for business clients, those areas should serve as your primary focus from the start of your practice.  As I'll describe below, I believe that there are many ways that you can make this practice area fairly profitable from the inception.  However, I also understand your concern about being able to make money and thus, you may want to choose one or two consumer practice areas to supplement your earnings at the outset. (Note - I am assuming that you are interested in non-business matters primarily for cash flow reasons, not for personal interest.  For solos who are interested in a variety of practice areas, I would encourage you to sample several before settling on a few core practice areas).

Here's the rationale behind my advice.  First of all, even consumer cases like personal injury or family law or probate may not be easy to come by without marketing.  So you'll probably need to spend some time trying to proactively attract consumer cases.  References to "door law" or "threshold law" aside, many of these clients won't simply walk in off the street without any marketing effort on your part.  In addition, based on your background, I'm guessing that you probably don't have much familiarity with these types of matters and as a result, you'll also need time to get up to speed.  All of this effort in other areas will detract from your ability to build up your corporate and business practice. 

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Boo-hoo for biglaw.  Unable to cope with the economic downturn, biglaw may now try to change the rules of the game. Over at Ideoblog, Professor Larry Ribstein faults ethics rules such as the prohibition on non-compete agreements and non-lawyer investment in law firms and conflicts of interest requirements.  For example, Ribstein says that because firms are not permitted to impose non-compete agreements, partners will jump ship in troubled times, taking clients with them.  Economic problems are also exacerbated because sinking firms are often unable to seek shelter through mergers which often fall through due to conflicts of interest.  Finally, without access to private investment, firms rely on bank loans to meet financial obligations - which makes firms more vulnerable to bankruptcy if they can't make repayments.  Ribstein sees no downside to eliminating these "archaic" rules, which he argues are designed to ensure that the law remains a profession not a business and don't serve clients' long term interests.

Ribstein's got his facts right - in fact, I described the biglaw death spiral scenario last month.  But I don't agree that the bar should jump to change our ethics rules just to bail out biglaw.  As I posted earlier today at Legal Blog Watch, law firms aren't the only businesses subject to onerous regulation.  Most companies face legal and regulatory constraints but they devise strategies to deal with them.  Law firms failed to do so and now they're paying the price.

So why should a solo like myself care if biglaw changes the rules?  After all, a few months ago, I wrote about how we solo and small firm lawyer may need to challenge bar regulations that interfere with educational lawyer blogging, virtual and non-traditional law practices and collaborative ventures between lawyers.  The problem is that the rules that biglaw wants to change won't enhance competition, benefit clients or improve the practice of law, as Ribstein seems to suggest.  The ban on non-competes has enabled many biglaw attorneys (such as those described here) to jump ship with a handful of clients and then open their own practices where they charge lower rates and offer better value.  Conflicts rules (which have scant applicability anyway in an era of blanket waivers and consent) ensure that clients are zealously represented - but they also help prevent firms from gaining monopoly power within their given markets.  (As for non-lawyer outside investment in firms, I am looking to the UK to see the results - I'm curious about how it might work and how it might potentially benefit solos).  

I feel badly for the hundreds of lawyers who've lost their jobs at large firms, and I'm saddened that some of this talent may leave our profession.  But having said that, I don't think that changing ethics rules on conflicts or non-compete agreements will will help laid off lawyers.  Indeed, these changes would actually hurt departing lawyers because they'd be prevented from taking a small piece of business with them to start a new firm or from handling conflicts work, which is typically a rich source of referrals. 

But Ribstein's suggestion raises a larger question:  should the profession at large even care about rescuing biglaw?  I said no once before and I say it again now.  Solo and small firms comprise a majority of lawyers in the United States - close to 70 percent.  So why should we change the rules that serve all lawyers to accommodate a small segment of our profession?  That's the real question that Ribstein needs to address.

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For almost two weeks now, I've been dealing with a family situation that has taken me out of town, spending both days and nights at the hospital.  Like many of my colleagues who responded to the MyShingle contest question, I too employ technology that lets me take my office with me on the road.  Unfortunately, great as technology is, it has its limits in that it can't actually do our work for us, particularly when that work involves complicated legal questions that don't lend themselves well to forms or templates.  So now more than ever, I'm coming to realize the importance of back-up -- not back up for files (though of course, that's critical), but human back up as well. 

So where can solos find colleagues who can back them up?   Here are some tips for finding good back up:

1.  Don't wait until the last minute:  Perhaps the most important rule for human back up is to avoid waiting until the last minute to find it.  From the day you open your practice, you should start cultivating relationships with other lawyers, law students and virtual assistants who can step in when you're too busy to handle a project or when life's emergencies interfere.  Most malpractice insurers require lawyers to affirm that they have back up, or sometimes even identify a lawyer who will serve as back up.  But most solos myself included, don't really take this requirement seriously - and they should.

2.  Make sure you can work with your back up:  In most cases, the need for human back up arises during periods of high stress - tight deadlines or emergencies.  So it's imperative that you have an easy, comfortable relationship with your back up attorneys, because you may not be at your best when you work with them.  I serve as back up for one lawyer who can be a real bear when he's under stress and knowing that, I always remain calm and accommodating.  Likewise, one of my back up lawyers is incredibly laid back - he's done a couple of down-to-the-wire midnight filings for me without reproach.  Realize that your back up team will see you at your worst, not your best - so pick people who won't negatively judge you for it.

3.  Reach out to colleagues:   The best starting point for human back up lies right in your own backyard, within the circle of lawyers whom you've worked with in the past or gotten to know through professional activities.  My own back-up attorneys come from a variety of places - some I've worked with at previous jobs, others I've met through mutual colleagues.   

But while your inner circle is the best place to start looking for back up, you needn't limit yourself either.  You may also find back up prospects through listserves or Twitter. In my own case, I identified several promising back up lawyers through  Solosez and followed up with phone calls or in person get togethers to get a sense of how we might work together.  For my energy practice, which is more specialized, I hosted a couple of meet-ups for other solo and small firm energy lawyers, where I became acquainted with several talented energy attorneys whom I've used not just for back up, but also to team up with to respond to RFPs.

4  Scope out the talents of younger or newer solos lawyers:  Sometimes, you need back-up but you're on a limited budget.  In these cases, it's economical to bring in younger or newer solos who either handle contract work as a business or are willing to accept per diem projects for extra revenue.  In a crunch, however, you don't want to pass off work to someone whom you haven't tested.  After making this mistake of using an untested newbie with disastrous results, I now try to pass off small assignments to newer solos when neither the work nor my time frame are critical.   With "test drives," I get to familiarize myself with new solos' capabilities and decide if I'd like to work with them again. (Of course, I pay -- reasonably well, I think -- for the work).  Down the road, when I have immediate work demands, I can outsource to the solos whom I've deemed qualified, fully confident of their ability to handle the work.

5.  Offer your help:  When you have a chance, reach out and offer to help other solos. I've offered to shepherd filings for colleagues or cover hearings when they're in a pinch and most are happy to return the favor. 

6.  Realize that back up will cost you...and get over it.  While I'm less stressed knowing that I've left work in capable hands, I'm not happy about paying others to cover matters where I'd earn more doing the work entirely myself.  But I know that if I'd taken that approach, the quality of my work would suffer and my clients would pay the price.  By using my back-up, I'm still able to produce the kind of first rate product that I expect of myself (even if my clients don't) and tend to my personal issues without having to dump my personal problems on my clients.  So the cost of back-up is worth it.   

So fellow solos - who's got your back, and how did you find them?  Please share your ideas in the comments section.

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(reposted from That Lawyer Dude)

I couldn't wait for my first case. I was a brand new "Lawyer" in Hofstra University's brand new Criminal Defense Clinic (we hadn't taken the bar yet but we worked under a student practice order while supervised by an admitted attorney). I was getting a case load, a client or two that I could "help". I was so excited. When the assignments were announced Doug Colbert (now a Prof at Univ. of Maryland Law but then first director of our clinic at Hofstra Law)had assigned me to a trans-gendered Prostitute!

I was stunned. I thought to myself "how am I gonna do this?" Not only was the guy gay, HE DRESSED LIKE A GIRL!! This was not what I expected. It was also going to be a great personal problem... How was I going to go home and tell my Father and Mother that the son they had spent a life savings on educating, was going to be representing "he-shes?" My Family was going to disown me. Forget my friends. They will all think I flipped! I mean I was Mr. Prosecution at school. I was so conservative, I had actually met and liked President Reagan (still do). "Oh and then what would happen to my political career if I took this case?" NO NO NO I could not represent this...GUY?!

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Early six years ago, and not long after Carolyn launched this blog, I sat before a clunky desktop computer with a newborn baby nestled on my lap in an isolated New England town, wondering how I could possibly leave my baby and return to full-time practice.  I spent hours, days on end, surfing the web over an incredibly slow dial-up connection, hoping to find a resource or online discussion that could reassure me that alternatives to the full-time legal track existed--options that would offer me the flexibility I sought to be a successful lawyer and an available mother, as I defined those terms for myself.  I wanted to know that I wasn't alone in wanting more from the law and life. 

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I have found that the technology I use is indispensible in serving my clients and building my fledgling practice.  Most importantly, these tools have helped keep my overhead extremely low and pass those savings on to my clients.  This has allowed me to help others who might not have otherwise been able to afford a lawyer, while giving me the ability to cover my expenses and reinvest in my firm.  Aside from a reliable laptop and printer, an inexpensive and robust call-forwarding program helped me do just that.  

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Without technology, my practice simply wouldn’t be possible.  Four years ago, I built a cabin in remote Alaska, hours from the nearest gas station or corner store.  I didn’t know when, but I knew I would make it back.  Eight months ago, I left my clerkship in the Virgin Islands, boyfriend in tow, and migrated north to the cabin, ready to solo remote living style.

      My infrastructure is completely dependent on technology.  Solar panels, generator, military-built battery bank, satellite internet, satellite phone.  The internet alone was quite the project to set up, as we had to drive 400 miles to pick up a dish that would put most coffee tables to shame.

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It’s nice — especially for the lawyer — when the client has a six-figure litigation budget for a case.  But not every client can afford that, and even if you can, not every dispute is worth it.  Fortunately, advances in technology have leveled the playing field so that small firms with low overhead can provide many of the same services that were once the exclusive domain of the large law firms.

Newdorf Legal uses the latest legal software and technology to provide cutting-edge service together with excellent value for the client.  Here’s an example of what’s available to our clients.

 

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3 Key Ways Technology Helps Me Serve Clients

I wish I could tell you a story that perfectly illustrates how technology helps me serve my clients.  It’d be dramatic and poignant, perhaps involving Perry Mason.  Carmina Burana would be playing in the background and it’d undoubtedly involve a victory at trial.  I’d be carried off on the shoulders of an adoring crowd and the mayor would give me the key to the city.  Then Google would elevate my blog’s page rank to an “8,” and I’d have 25,000 page views in a single day.  It would be epic, and the reason for all this success would be my clever use of technology to advance the interests of a client.

I wish.  Instead you’ll have to settle for a workmanlike post.
 

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The Other Woman . . .

I admit it, there is another woman.  She is alluring, demanding, and very intrusive.  And yet my wife puts up with my law practice.

I am writing this while on vacation in the Caribbean.  We had a vacation like this a year ago and my new wife was so thrilled that she saw me relax.   So, we decided to try to make this an annual venture.  Unfortunately, this trip is not going quite as planned.

Upon my arrival with laptop in tow, I discovered that there were some fires back in the office.  Of course, while putting out these fires, one cannot help but check the other e-mail, automatically pop on the Instant Message, and respond to friends and colleagues all of who ask Aren't you on vacation?  Why are you working?, and Isn't your wife going to kill you?  A solo's law practice is an unforgiving mistress especially when you are the one in charge and the only one in the office.  Thankfully my wife is a very understanding woman  she has to be, she is the one who first suggested I start my own practice.  But she also knows what I am doing, what I am trying to build, and who I am  trying to help.

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From the first day my virtual shingle went up, the web-based virtual law office technology has allowed me to work with clients of moderate income levels in a more efficient and convenient way for both the clients and myself.  I won’t pretend the motivation for opening my virtual law office (VLO) was for the greater good of the public.  Wanting to provide affordable services more cost-effectively to individuals of moderate income levels was certainly one aspect for developing a software as a service technology that would allow me to communicate securely with clients over the Internet.  However, the main motivation for using web 2.0 technology in my law practice was to create a better balance for my own young family.  My first child was born in January 2006 and my VLO opened that same winter. 

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Why What I Do Matters to the Profession

By: Ben Glass, Fairfax, VA www.greatlegalmarketing.com

In May 2005 I sat in the back of a room at a Renegade Millionaire conference hosted by Dan Kennedy, hearing story after story of how people in different professions and businesses were making a difference in the lives of others in their profession or business by teaching them how to built profitable, successful businesses. I knew that many lawyers struggled mightily with the business side of their practices—Good lawyers who had gone to law school in order to be able to do good for others, in some cases to change the world, but for whom the struggle was mighty because no one ever taught them how to run a law practice as a business. In some cases, good lawyers who wanted to do good for others had been defeated and run out of the profession by the lack of basic business skills.

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I went to law school to make a difference and really help people.   I graduated from law school in 1999, when the economy was having a party and law firms were fighting for the top law school graduates.  By the time I graduated, starting salaries had crept up to $135,000 per year and I graduated first in my class from Georgetown University Law Center, giving me my pick of law firms, any one of which would give me a fat signing bonus and pay for me to move to their city.

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[Some edits as of 1/16/09]

Over at her blog, Legal Research and Writing Pro, my friend Lisa Solomon summarizes the recent spurt of posts round the blogosphere on the grim life of contract attorneys, who endure low wages, intolerable working conditions and frequently, degrading treatment from other lawyers.  Lisa suggests that these lawyers consider starting their own independent contract lawyering businesses, where they can engage in more substantive work than document review and earn more money by eliminating the middle man - the staffing agency - from their dealings with the hiring firm.  Likewise, I've always contended that contract lawyers should think about starting their own law firms instead of settling for low paid and often mindless document review work.

But increasingly, I'm realizing that my advice creates a conundrum for many contract lawyers:  with student loan obligations bearing down, many feel that they can't afford to wean themselves from contract lawyer work.  Thus, even when a position ends and the contract lawyer uses the downtime to try to start a firm, when another contract gig opens up, it's often hard for the lawyer to resist the steady cash, and so the firm gets put on hold until the next dry spell.

In addition, I'm also aware that contract lawyering has changed substantially since I started my own firm 15 years ago.  Back then, there weren't as many contract positions available as there are today, but those contract positions that were available were far more flexible.  As a result, lawyers could handle the contract work but take time off to attend to matters for their own practice. However, many of today's contract attorneys don't have that option.  In a buyer's market, staffing agencies are cracking down and requiring contract lawyers to work long days, every day with few breaks.  Many contract lawyers spend 10 hours on the job and are too exhausted afterwards to do work for outside clients, even if they were able to find it.  In fact, many agencies expressly prohibit solo practitioners from applying for contract lawyering jobs, because of concerns that solos may devote time to their own practices on the contract client's dime. 

Whereas once, lawyers could use contract positions to get a firm off the ground, increasingly,  contract lawyering is becoming incompatible with starting a practice.  Lawyers are forced to choose between contract lawyering and hanging a shingle - and those who are strangled by debt often opt for the guaranteed income that comes from contract work.  

So what is the solution to the conundrum or catch-22 of the contract lawyer? 

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I wanted to apologize for my delay in posting the results of the contest - there are so many great posts and I'd like to get them all set up to post in seriatim - but a couple of matters, including an unexpected family emergency have put me off track.  I will either turn my attention to this over the weekend or delegate the work if I have to, but I will get the posts up and announce the winners!

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 Many large firms assume, wrongly, that solo and small firm lawyers don't handle complex issues.  Truth is, many of us do.  But unlike biglaw which has the luxury of researching and strategizing about these issues in a vacuum, we solo and small firm clients do all that, plus tend to our clients' needs.

Consider the emerging litigation arising out of Madoff's Ponzi scheme.  As I posted over at Legal Blog Watch, at least a half dozen large firms have created practice areas to assist clients impacted by Madoff's fraud.  However, while large firms are targeting and will likely represent the big fish --  the large, institutional investors or banks who put money in Madoff funds and now face liability for failing to exercise due diligence -- solos are representing Madoff's individual victims.  In representing either large banks or individual investors, lawyers will tackle incredibly complicated issues such as unraveling complex transactions or developing viable defenses to liability or theories of recovery. 

But whereas biglaw's job ends with the legal issues, as the Florida Business Journal reports, solos are also helping clients with the personal carnage of Madoff's misdeeds.  Among other things, solos are playing the role of social workers and job counselors.  From the Business Journal:

Guy Fronstin, a solo practitioner quoted in the article who is helping 50 groups of investors explained: “One client has to go back to work ... This guy’s money is going to run out in 30 days. I think we’ve found him some work.” Fronstin is also helping his clients deal with the psychological impacts of the Madoff fiasco. One Fronstin client, 85-year-old Adele Fox, invested $50,000 with Madoff because a relative of hers was Madoff's accountant. Fox received distributions from Madoff every three months, and now she's terrified that she may have to disgorge that money if Madoff is brought to justice. Another client has been forced to make a substantial life change, selling an expensive condo and moving into publicly-subsidized housing. 

In many ways, biglaw is like Fred Astaire - both great at what they do.  But don't forget, in many cases, just like Ginger Rogers, we solos do everything that biglaw does, only backwards (in that we're often on the other side of the issues), in high heels (in that, we often teeter precariously as we strive to get the most out of our clients' more limited budgets) and with real live human beings to whom we're accountable.  Can't get much more complex than that.

"Every day, we leave our imprint on the human heart, in a way that counts so much more than we could ever realize." MyShingle, 9/08/08.

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[Post has been edited]

I'll be teaching a course on how to use web 2.0, social media and other collaborative technologies to Build Your Own Bar Association through Solo Practice University.   From what I can tell, I'll be a bit of a heretic on the faculty:  not only did I love law school but I also sincerely believe that it provided a real education, and that what I learned has helped me in my own practice and throughout my career.  Then again, the world is a classroom to me, and I've learned from sitting in court watching other lawyers (my favorite past time, next to poring over turn of the century law review articles in the law school stacks) and from reading documents that I've reviewed in discovery and from looking through court files (I remember the days when I had to go down to the actual courthouse to do that!) and I've learned from lawyers whom I've gotten to know online and those whom I worked for (even those who fired me), with and against and I've learned about marketing from real life.  Even after practicing for twenty years, I'm still learning new things, every day.

SPU celebrates the spirit of learning and provides another resource for lawyers who want to learn to start a practice, as I've done, albeit in a very different way at MyShingle.com and through my book, Solo by Choice.  Will SPU be valuable?   It's a great and original concept, to be sure and has Susan's reputation and passion behind it.  But ultimately, what you get out of SPU or any other learning experience, including law school for that matter, depends upon you.  

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Last week's Biglaw to Yourlaw Teleseminar was a great success, but folks still continue to download the free e-book.  I had hoped to make a tape of the call available, but somehow managed to botch the recording.  Since I need to re-tape anyway, I'm going to do a second round of the call - this time on THURSDAY, JANUARY 8 at 3 pm EST.

If you have ALREADY downloaded the e-book or previously registered for the call, you will automatically receive the dial-in information via email to be sent tomorrow.  If you have not downloaded the e-book or registered, please do so here.

In another sign of the times, my book, Solo by Choice is sold out on both Amazon and Barnes and Noble.  The books are currently being restocked, but in the interim, you can get a copy directly from my publisher at Lawyer Avenue.com.

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Tomorrow and throughout the week, I'll be posting the essays that I received in response to MyShingle's Sixth Birthday contest.  But for my first post of the New Year, like many of my blogging colleagues (e.g., Ross Kodner, Neil Squillante,Niki Black and Stephanie Kimbro) I wanted to share some of my predictions for 2009.  I won't comment on micro-trends, such as this year's hot practice areas, because I just completed a terrific piece on that topic for a bar magazine and I don't want to spill the beans.  Instead, below are some broader thoughts on where I see the legal profession, in particular solo and small firm practice, headed in the year to come.

I view 2009 as a transition year, not a breakthrough year, with the operative theme being trust.  Crises like the mortgage meltdown, where borrowers allowed lenders to convince them that they could afford a mortgage triple the size of their income or the Madoff Ponzi scheme, where investors simply took Madoff's word that his returns were as he said, have substantially eroded the public's trust in professionals.  Clients are going to scrutinize lawyers more closely than ever and look to third party information such as online testimonials or even the much maligned (not by me) Avvo ratings and those sites will gain traction.  (Incidentally, I'm not alone with this prediction -- Richard Susskind, author of The End of Lawyers, p.112  discusses how eventually clients will have access to repositories of feedback from clients just as users have available on eBay or Amazon).

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