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

I've never been a fan of NALP, the National Association of Legal Professionals.  So far as I've been able to tell, the organization focuses almost exclusively on supporting law school career offices in helping students get jobs at biglaw and promoting diversity within biglaw's ranks.  Even NALP's public interest initiatives are aimed not at helping law students find public interest positions, but rather -- you guessed it -- helping biglaw firms identify public interest programs where they can place downsized associates.

Even though NALP never helped the majority of students find jobs, it's never received much criticism. Until now.  NALP's policies on law school recruitment are coming under fire, not because they're useless or even detrimental to many students, but rather, because they threaten biglaw's hiring practices.  

NALP wants large firm employers to put off hiring decisions until January and then, give students 14 days to make a decision.  The NALP proposal represents a change from the current practice, whereby firms interview students before the start of second year of law school and allow 45 days for students to make decisions.  In a recent opinion piece in the National Law Journal, Peter Kalis of K&L Gates criticizes both of NALP's recommended practices, arguing that they unreasonably constrain biglaw's flexibility over hiring decisions.  As such, Kalis issues the battle cry to Abolish NALP Now, a charge that Bruce Macewen echoes with a lengthy post at Adam Smith.

As I said at the outset, I'm no fan of NALP.  Because it serves only a small segment of the population, it fails to provide law school career offices with resources that would enable them to make other options - like government or public interest jobs or solo practice accessible to law students and alumni.  So NALP has always been a huge waste of time and further, has done little to serve student interests.  But naturally, no one ever thought to eliminate or criticize NALP until its actions started hurting biglaw.   

Moreover, does biglaw really need protection from NALP?  What about the law students who are issued offers, which are then deferred which are then revoked when they show up for work?  Or law students holding their biglaw careers in abeyance while marching off to work at public interest jobs while waiting for the firm to bring them on board?  Let's face it.  The present NALP system doesn't do much to help students.  It puts students in a situation where they're forced to make job decisions months in advance of starting which is risky business in a volatile job market.  And rather than help students identify biglaw alternatives when those jobs fall through, NALP encourages them to sit around a dead-end public interest job while waiting for a call to start work that might never come. 

In looking at whether to eliminate NALP, we should be talking about students and young lawyers, not biglaw.  Biglaw's already hung young associates out to dry once, with mass layoffs that probably could have been avoided with firm-wide salary caps, termination of unproductive partners and of course, basic planning (did firms REALLY think they could keep charging $950/hr in a recession?)  Now biglaw wants the freedom to issue and rescind offers at will without any repercussion. 

Ultimately, in the smack down between NALP and biglaw, it's law students and young lawyers who wind up on the sidelines.  They say you don't learn anything in law school, but this recent incident teaches one important lesson: if law students and young lawyers don't look out for their own best interests, no one else will.

 

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The twenty-first century version of loss leaders, big-law style, is nothing more than old fashioned price cutting wars, observes Toby Brown at Three Geeks and a Law Blog.  A loss leader refers to a pricing strategy whereby a product is advertised below cost to lure customers in the hopes of selling them more profitable, big ticket items.  As Brown points out, biglaw's so called loss leaders - deeply discounted M&A deals and large dollar, complex litigation cases -- are in fact, nothing more than big-ticket items being passed off at bargain basement prices.  Rather than stimulate clients to spend more money as is the case with a true loss leader, discounting big ticket items only gives client a continued expectation of lower prices.  As Brown puts it:

This is akin to the car dealer selling Escalades at a loss, hoping you’ll buy … maybe some nicer wheels? Law firms using this technique are expecting the customer to be so happy they come back next year and buy another Escalade - at full price. The likelihood of this: Zero.

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Peter Chaffetz and David Lindsey, founders and partners at newly formed boutique Chaffetz Lindsey could have simply hopped into another big firm life boat after their former firm, Clifford Chance hit stormy weather last year.  Instead, they took another course: they launched a boutique that is thriving even as the economy struggles to recover.  This article in the New York Law Journal reports on the firm's beginnings and subsequent growth.

The New York Law Journal article offers a good description of sources of work that are typical for big firm lawyers turned solo.  These include:

1. Conflicts work.  Chaffetz and Lindsey explain that most of their cases arrive through referrals generated by conflicts.  These days, other large firms that the pair viewed as competitors while at biglaw are now regarded as rich referral sources.

2.  Lower billing rates.  No matter how much the experts try to tell you that price doesn't matter, a smaller firm's ability to charge less than biglaw is an enormous selling point.  As one Chaffetz Lindsey client told the New York Law Journal: "Given that I was getting the same lawyer [from the large firm] for a lower billing rate, it was attractive to me."   In fact, many biglaw turned solos find that clients accustomed to their biglaw billing rates generally send more work to them as solos because it simply doesn't cost as much.

3.  Lower labor costs and no leverage.  In this market, Chaffetz and Lindsey are able to pay their three associates less than the prevailing starting strategies.  For larger matters, rather than gear up with new hires, the firm has made arrangements for added support from a  Buffalo, New York based firm, where rates are lower.

4.   Less overhead.  Chaffetz & Lindsey aren't a virtual practice.  Still, they've managed to locate below market rents because of the glut of office space. 

Recipe for Success:  Perhaps, Chaffetz & Lindsey are experiencing uncommonly positive growth because of longstanding industry connections.  But their recipe for success is common: low labor costs, reduced overhead, mining conflicts and lower billing rates.   Biglaw lawyers considering going solo would do well to take a page out of Chaffetz & Lindsey's cook book.

Bonus:  More resources on biglaw to solo.

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Even though I reside in Bethesda, Maryland and practice appellate law in Washington D.C. just like appellate lawyer Mark Levy,  the former Kilpatrick Stockton attorney who took his life after his firm downsized, our paths never crossed.   As a biglaw attorney and a small fry in a highly stratified town like Washington D.C., lawyers like Mark Levy and I travel in different circles, attend different conferences and represent different types of clients.  Yet in an odd turn of circumstances, our worlds nearly collide this month on the pages November's ABA Journal, which reports on Mr. Levy's tragic suicide in this article, A Death in the Office and interviews me (as well as some of my solo colleagues) in this piece  So You Want to Go Solo?  Are You Sure? just a few pages later.

In reading about Mr. Levy, oh, how I envied his career.  After all, what appellate lawyer walking this planet wouldn't covet a CV that included a prominent position in the Clinton administration, high powered and likely lucrative jobs at AmLaw 100 firms and most of all, multiple arguments before the Supreme Court?  If I'd ever met Mr. Levy at a function here in D.C., I'm certain that I would have peppered him with dozens of questions about his cases, his appellate strategy and at what rate your heart pumps or your stomach flips over when you stand before a podium where few lawyers have gone before, with the prospect of vindicating a client or making history.

 

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Even if for the sake of argument, you accept the proposition that biglaw is better than small law, the question is: how much better.  Is an $850/hr partner at a mega firm really $500/hr better than his or her solo or small firm counterpart?  Naturally, we solo and small firm lawyers would say no, but you might argue that we're just being subjective.

For that reason, I was gratified to see that a law professor - who doesn't have a "dog in the fight" so to speak - also agrees that big firms (at least in their current structure) don't bring that much more to the table.  University of Illinois professor and blogger Ideoblog has this to say in the Philadelphia Inquirer:

My theory is that big law firms don't have a coherent business model," says Ribstein, who studies the economics of the legal profession. "From a client standpoint, why would you pay so much per hour for a lawyer who works for a big firm vs. [a lower rate] for a lawyer who works for a smaller firm? What value does the big firm add?"  Big firms answer that they can assemble teams of lawyers from all over the globe, along with high-end technical expertise to focus on huge cases where the very fate of a company might hang in the balance.  But Ribstein says clients, many with huge in-house legal staffs, are having their own lawyers do the work or are parceling it out to lower-cost firms.  So cost-cutting will get you only so far and might eventually devolve into a race to the bottom.

What value indeed?

Ribstein suggests that the solution is to allow law firms to "go public," i.e., to change bar rules to permit non-lawyer investors hold financial interests in firms so that they can raise capital more easily.  I'm not quite sure how that will improve firms' financial situation if they continue to depend on a leveraged associate model, but I look forward to his forthcoming paper on the topic of new business models for biglaw.

 

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From Biglaw to Yourlaw -

Yesterday, one of my solo colleagues Mitchell Matorin was profiled in the Wall Street Journal as asomewhat timely example of a large firm lawyer who has found success in solo practice.  The story mentioned MyShingle and has been driving some traffic to this site, so I wanted to highlight some of the useful resources here. (The site is relaunching soon, I promise, and everything will be easier to find) All lawyers, no matter their background, will find the below links interesting.  But the reason that much is aimed at large firm lawyers is because that segment, most of all, has been inundated with myths about solo practice, or lacked access to meaningful information on the solo option.  And while starting a law firm may not be the right fit for some large firm attorneys, they should rely on accurate information when making the decision:

1.  My e-book, From Biglaw to Yourlaw can now be downloaded by clicking on the above link or going to JD Supra.  I published the book in late December 2008 when the first wave of layoffs hit, but much of the advice remains timely;

2. Updated Soloformania, with forms, checklists and sample pleadings you can use in your practice and Bars Reviewed, quick links to resources and services that the 50 bars offer to solo and small firm lawyers;

3.  Free recording of Going Solo in a New Economy, 100 minute teleseminar recording by me and Susan Cartier Liebel of Solo Practice University;

4.  Fifty web resources for suddenly solo by Jim Calloway and Allison Shields;

5.  Issues to consider in comparing the cost of software as a service and traditional practice management tools and deciding on an approach;

6. Handling biglaw practice areas on a budget;

7.  Pros and cons of leaving biglaw to start a firm;

8.  Link round up on biglaw to solo;

9.  If you play the part of a solo long enough, you can be one (a response to those who say that they're not cut out for solo practice).

And of course, check out the archive categories here as well as my Legal Marketing Blawg for Nolo with lots of inexpensive marketing tips.

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Not all lawyers who start their own firm experience wild success.  This month's American Lawyer focuses on three who did not.  I don't take issue with the story's spin because I believe that it's important to impress the challenges of starting a practice.  Too many of the new crop of opportunist start-a-firm gurus blithely gloss over the drawbacks and often don't offer strategies suitable for lawyers seeking to continue in a biglaw practice area.  What I do find objectionable, however, is that many of the major legal trade publications that cater to biglaw readers rarely if ever feature large firm attorneys who are making a go of solo practice and discovering modest success. 

The American Lawyer article describes the path of three large firm lawyers, Scott Jaffe, Paul Roberts and Ross Schiller who this past winter, opened a boutique law firm in Manhattan specializing in finance, commercial law and bankruptcy.  But as of last month, Schiller had left the firm in search of a new job, while Jaffe and Roberts were in the process of merging their practice with another start-up.  Based on the article's description, there's much that the trio did right in starting a firm such as keeping start up costs low.  But it's also apparent that Jaffe's, Roberts' and Schiller's biglaw background handicapped them when it came to marketing their practice and operating it efficiently:

The lawyers contributed $2,000 apiece for the initial capital. Because the expenses were so low--the rent was only $1,500 a month--they also thought they could charge less. Jaffe, Roberts & Schiller advertised lower hourly rates, and said they were open to fixed-fee arrangements.

It wasn't a smooth launch, though. They held off marketing themselves for about a month, to see if a friend who'd been cut from Morgan Stanley would join. He didn't. It also took a month longer than planned to get brochures. In the meantime, Jaffe trolled Craigs­list for contract attorney gigs, but he passed on them when he discovered they typically pay just $35 an hour. Roberts's wife pitched his services to someone sitting next to her on a bus.

There were also adjustments. "[Jaffe] clearly has the hardest time dealing with all the things we have to do to start a firm," Roberts said in April. "He's always had secretaries doing his markups, and he's never used a computer before." Jaffe, 44, admitted that he was still getting used to typing his own letters. "Especially for a dinosaur like me who didn't type e-mail until now, that is the hardest part," he says.

Work was slow to arrive. Roberts, 40, says he was close to signing a client who could have covered their monthly expenses. It never happened. The group kept busy with pro bono work, including Chapter 7 filings that Jaffe and Roberts handled to pick up bankruptcy experience, and a loan modification for one of Schiller's relatives.

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With many biglaw attorneys now considering solo practice, I wanted to list a couple of ideas and resources to procure biglaw practice tools on a budget.  For most consumer practice areas, such as family law, bankruptcy, trusts and estates, new solos can find a cornucopia of low cost practice tools, such as pro bono training programs, reasonably priced bar courses and forms (many which include valuable CLE credits as part of the package) or even many of the books by Nolo, one of the sponsors of this site (in fact, my love of Nolo books is one reason why I've been thrilled by their support of my site). 

But when it comes to many biglaw practice areas, low cost information isn't as freely available.  My practice area, energy regulation is a traditionally biglaw field and it's dominated by commercial providers offering pricey seminars, webinars, subscription services and conferences, often $1000 a pop or more.  These costs can pose a real hurdle to biglaw attorneys who want to continue practicing their biglaw specialty as a solo.  However, there are a couple of solutions.

First, check out My Corporate Resource, an aggregation of biglaw newsletters (H/T Three Geeks and A Law Blog).  These newsletters cover all kinds of recent developments, often with cites to relevant cases or new legislation.  You can pick up a feed for your practice area to keep abreast of changes at no cost. 

Second, you can try to barter your knowledge or time for some of the information products that large firms access.  Just a few days ago, I helped a colleague with some tips on research tools and social media and in exchange, he'll be providing me access to a range of fairly expensive seminars.  Similarly, I often send news clippings to a large firm that I work with from time to time, and they'll often forward me  articles from costly subscription services.  When I started my firm, I'd often attend expensive conferences for colleagues in exchange for bringing back materials and preparing a summary of the event.

Don't feel that you need to give up a potentially lucrative biglaw practice area because you can't afford to get it up and running.  Instead, recognize that your biglaw specialization can potentially be a cash cow for your practice (after all, most larger companies won't blink about paying $20,000 for a complex matter, while those rates can price many consumer clients right out of your office) and be resourceful in finding inexpensive ways to procure the resources you need.

Does anyone else have any other tips for doing biglaw work on a budget?  Please post them in the comment section below.

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Two roads diverged in a wood, and I--I took the one less traveled by, and that has made all the difference.  Robert Frost

Why is it that biglaw is always engaged in a constant game of follow the leader?  A few years back, sites like Above the Law gleefully documented the steady upward march of first year salaries from $125,000 to $140,000 to $165,000, taunting those that didn't keep pace.  Two short years later, as the economy tanked, a trickle of firms with practice areas hit hard by the economy laid off a handful of associates here and there.  But the early round of layoffs took away the stigma and these days, virtually every AmLaw top 100 firm is dumping associates or deferring their start dates.  Of course, either feeling guilty or irrationally optimistic that the economy will turn around, firms are trying to soften the blow of layoffs by extending substantial severance packages and competing to  place laid off lawyers in public interest jobs, overtaxing many non-profits and worse, displacing lawyers who wanted public interest jobs from the outset. 

Time after time, whether it's work-life balance or flex-time or employing contract attorneys to the panicked reaction to the economy, large law firms fall prey to the lock-step monster, taking an action not because it makes sense strategically or serves long term goals but because everyone else is doing it.  From where I and many of my solo and small firm colleagues sit, all we see is biglaw buckling, running scared with no clue of where they're headed. 

That's not to say that we solos aren't scared either.  But having created a firm once, we know deep down that we could do it again if it all falls apart.  Though in an earlier post today, I wrote of the dangers of growing stale in solo practice, truth is, I've also seen solo and small firms heroically reinvent their practices, either downscaling from a volume practice or going virtual or changing practice areas entirely, or exploring prospects for collaborative ventures.  Granted, some of these solutions may not work for biglaw attorneys, but at least, they offer new ideas and a way to stand down that lock-step monster, once and for all.

 

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Imagine having $100,000 to start a law firm.  That's the consolation prize for the 190 associates laid off today by Latham and Watkins:  six months of severance pay, capped at $100,000, reports AmLaw Daily.  I realize that when you're saddled with student loans and the accoutrements of a biglaw lifestyle, $100,000 doesn't seem all that rich.  But for those of us, myself included, who lauched our firms with student loans and car and mortgage payments hanging over our heads, even $10,000 would have made a huge difference.

Still, I also know that getting laid off is no fun and no matter how much money a firm shells out to soften the blow.  After all, it's the ego, not the budget, that takes the real bruising in a layoff and no amount of reassurances by colleagues or bravado on your own part can eliminate those niggling doubts that maybe you just weren't good enough.  So go ahead and sulk for a few days - you're entitled. 

But once that's out of your system, consider this.  You have a chance to reinvent yourself, to create something new that's never existed and be the lawyer you always wanted to be.  And what's more, some of you actually have the resources to see it through.  After all, who ever heard of an independent contract drafting commentator and consultant, before Ken Adams designed that position for himself?  Or a high-powered litigator-turned successful mediator like Victoria Pynchon?  Or a solo who practiced Supreme Court litigation exclusively like Tom Goldstein at (now) Howe & Russell? Or an energy regulatory attorney who runs a trade association and handles occasional 1983 civil rights actions and writes books and blogs (that would be me!) 

What do you want to do - argue Supreme Court cases?  Rescue victims of the housing crisis from foreclosure?  Handle class actions?  Try cases?  Negotiate big deals.  Make precedent?  Run a small, neighborhood law practice? All of these options are possibilities, they truly are.  But you have to break from those who lack the vision or imagination to see that these possibilities.

So when the head hunters tell you there's a tight job market, shut your ears.  Because there's no competition for a job which hasn't yet been announced at a firm that doesn't yet exist.  That position is yours for the taking, provided of course, that you create it.

If you are thinking about starting a firm, you can download my free ebooks on this topic here (inspiration for lawyers and social networking for lawyers) or here (From Biglaw to Yourlaw).

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Update - please see the comments, as they are very informative.  I think perhaps my position may be too extreme - funding a couple of non-profit positions or funding indigent criminal defense prgrams may not, on further reflection, be a bad idea (although in many instances, solo and small firm lawyers handle these kinds of matters as well and could actually afford to take those cases with a $60k investment). But in the long run, if firms are to thrive, they should also explore ways to diversify their investment, they should explore other options such as funding smaller firms, thereby planting seeds for growth down the line.

Believe me, this is a post that I hate to write as I'm loathe to criticize a big law firm like Simpson, Thacher that is desperately trying to do the right thing to mitigate the hardship of associate layoffs by paying associates $60,000 to work at a nonprofit for a year.  Still, I can't contain myself, because while it's a magnanimous act, business wise, it's also a stupid idea.  Instead of paying associates to work for non-profits and develop skills that they may not ever be able to use if they return to the firm, why not, as I've previously suggested, use that money to help displaced associates set up their own practice and then outsource innovation to them.

In case law firms have been sleeping, the President just signed the American Recovery and Reinvestment Act of 2009 into law, which is chock full of $787 billion worth of goodies designed to stimulate a industries like energy, education and health care.  And on its heels, it's likely that we'll see a $75 billion mortgage rescue package that will inject new life into the real estate industry.  If it works as intended, the stimulus package will create new industries, which will need legal representation to guide them through unchartered practice areas.

Sixty thousand dollars is chump to change to law firm associates accustomed to earning $160,000.  But to a lawyer seeking to start a practice, a $60k nest egg is an utter godsend.  Instead of working for a non-profit, a lawyer could (as I have  here) start a trade association to represent the myriad of new interest an industry groups bound to crop up as a result of the stimulus legislation.  After a year or two, the associate would be positioned as an expert in a hot new area, and could bring a lucrative practice to his or her former firm.  And even while delving into new areas, lawyers could still fulfill a civic duty by taking on court appointed work, consumer credit or bankruptcy cases as part of their practice - so the law firm could feel as if it contributed to the public good.  Best of all, during their year or two as free agents, associates would learn how to market themselves and run a business, thus getting the training that they need to help their firm move forward upon their return.

Of course, who can blame biglaw?  After all, law schools raise graduates to believe that the legal profession offers three options:  biglaw, government and non-profit/legal aid work.  Even with all of the consciousness raising by the solo/start a practice genre of blogs like this one, or this or this or this, that option of hanging a shingle completely eludes our profession's collective radar.  And if this major crisis doesn't change these attitudes quickly, then honestly, I'm not sure what will.   

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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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 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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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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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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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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Law may be governed by precedent, but oh how soon we forget.  Once upon, the behemoth law firm Skadden, Arps, Meagher & Flom was just a trio of fellows named Marshall, John and Les who had the crazy idea to hang out their own shingle.  Yet now, forty years later, as the economy tanks and jobs in the legal industry decline and young associates yearn for better work-life balance,  large firm attorneys rarely consider solo practice as an option.  Why is that so?  Below, I'll discuss some of those reasons.

First, many large firm attorneys never cross paths with a solo en route to their firm.  How do I know?  Because before I embarked on my own journey as a solo, I didn't know a single lawyer who opened their own practice.  Moreover, many of the so-called top tier schools, from which the majority of large firm lawyers hail, don't just lack resources or information on starting a law firm, but indeed, regard solos as a strange species from another planet.   One reason why starting a firm eventually became a reality for me was sheer happenstance:  I'd met a solo energy lawyer who worked opposite to me when I was at a federal agency, and saw that it could be done.  It wasn't until I actually opened my firm and got it up and running that I discovered the hidden network of underground solos that I'd never noticed before.

Though the blogosphere has done much to bridge the gap between large firms and solos in the profession, its reach still hasn't yet spread that far because we follow different sites. Most large firm attorneys favor blogs like Above the Law or WSJ Law Blog, while most solos read the multiple blogs on starting a firm as well as lots of the so-called thought leaders in the marketing, social networking, entrepreneurial and high tech circles (I can furnish my faves if youre interested).  Even though I've been blogging at MyShingle for almost six years and it's my flagship site, I'm surprised that among my biglaw buddies, I'm better known for my postings at Law.com's Legal Blogwatch.  Parallel universes, a colleague recently observed.

Second, myths abound about independent practice - from both the biglaw and solo side of the sphere.  Many at large firms assume that solo lawyers are scraping by or representing clients who can't afford to pay.  And while that's true in some cases, many solo lawyers make out quite well, especially if you factor in the number of hours that they work compared to their large firm colleagues.  As for some of the resources available on starting a firm, many do not address the issues unique to former biglaw attorneys who seek to open a practice.  I know that when I started my firm, Foonberg's classic, How to Start and Build A Law Practice, while incredibly useful for nuts and bolts (plus, reading it made me feel part of the solo tribe), the bok didn't resonate with me since I realized that joining a local rotary club or chatting with my accountant wasnt going to help me build my practice.  In fact, that's part of the reason that I wrote Solo by Choice:  to discuss ways to move from a large firm to independent practice.

Continue Reading...

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As much as I love blogging about the nitty gritty aspects of solo practice -- the how-tos, the marketing, overcoming your fears and all that good stuff, I'm just as interested in the role that solos play in the broader context of our profession and what other lawyers can learn from us and vice versa.  So that's why my article in this month's issue of The Complete Lawyer is one of my favorite pieces that I've written in a while.  Below are the opening paragraphs, with the link to the full article at the end:

If you’ve just read this [blog post's] title, you’re probably racking your brain trying to figure out what the heck a lowly solo practitioner like me can teach you about succeeding as a law firm associate.

You probably think that solos simply churn out form documents for simpleton clients who need help with run-of-the-mill problems like estate planning, divorce or landlord tenant matters, while law firm associates grapple with earth-shattering matters, sophisticated business clients and demanding law firm partners. And for goodness sakes, you’re billed out at an hourly rate that matches or exceeds what most solos charge. So what secrets of success can you possibly learn from us?

Plenty. But before we get started, you’ll have to dispel your negative impression of solo practitioners. First, though you may not realize it,  many solos handle complicated, traditionally “biglaw matters” such as tax, corporate transactional work, regulatory and complex litigation. Even solos with consumer-oriented specialties like criminal law, consumer credit, bankruptcy or family law regularly encounter constitutional issues or dissect tricky federal and state statutes. And while solos may charge less than a biglaw associate, because of lean staffing and low overhead, they also pocket a larger percentage (as much as 80%) of that $300/hr billable than you do.

Solos also oversee office administration, manage employees or virtual staff, and constantly market their practices. Once you begin to view solos not as loser-lawyers who couldn’t cut it in biglaw practice but as a blend of independent lawyer, team manager and entrepreneur, you’ll appreciate how solos’ secrets of success can help you succeed as well.

Continue reading here - and let me know in the comments below if there's anything else that lawyers can learn from us solos.

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I'm not much of a political junkie, but I made a point of watching Michelle Obama's speech to the Democrat National Convention.   Michelle (it's tough for me to refer to someone a few months older than me as "Mrs.")  intrigues me, largely because she's a contemporary with many superficialities in common:   we both graduated law school in 1988 (in fact, a high school friend of mine was in some of Obama's classes at Harvard); we both married in 1992 and we both have two daughters with lyrical names (Elana and Mira vs. Malia and Sasha) three years apart, though my girls are nearly 9 and 12 while the Obamas are 7 and 10.   And more recently, Michelle Obama put her career on hold for family, specifically, to help with her husband's campaign while trying to retain a presence in her daughters' lives.  That's the same reason that  I and most of my solo-mom (or solo dad) colleagues have eschewed more lucrative or prestigious opportunities in favor of running our own practices -- so that we have the flexibility to spend more time with our children. 

After Michelle's speech, her daughters trotted out on stage.  Perhaps I read too much into their appearance, but the daughters' confidence was palpable as was their easy familiarity their mom and hers with them.  It was a familiarity that reminded me of my relationship with my own girls (when we're not bickering, which of course, we do) - we share a certain comfortableness born of time spent together,  not really doing anything special but just hanging around.    I couldn't help thinking that even if Michelle Obama had worked at one of the fifty supposedly most family friendly law firms that she would have missed out on this type of experience.  Michelle would have spent her time with her girls in carefully metered segment, from 7 pm when she arrived home until 8:30 pm when they went to sleep.  And if Michelle Obama had brought her daughters to large firm meeting or conference (even on days when she was supposed to be working reduced hours), I'm sure she'd have been met with glowering stares or snide comments rather than the sheer delight that spilled forth from the convention audience. 

Working on my own, I set my own rules for my firm and my family.    No, of course, I don't bring my daughters to every meeting with me, but there have been days where I had no alternatives so they accompanied me to a conference or sat quietly reading while I gave a presentation or attended a meeting.  Over time, my girls have learned how to shake hands firmly, make eye contact and keep themselves busy and (reasonably) well behaved at professional events. 

I know that my experience doesn't differ much from that of other moms who run their own firms.  Yet oddly, you won't find solo practice ever mentioned on the list of "family friendly firms" or even discussed as a family friendly option.  And yet, it's the one place where parents can practice law without constantly concealing our job as parents as well.   

Michelle Obama isn't a solo and probably never will be, so career path is where our commonality ends.  But we've both had the chance to experience the joy of taking our children to work and introducing our work to our children because we didn't hew to the biglaw path but instead, found a way to have it all, all at once.

 

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 This post is for the 96 Cadwalader attorneys who were pink slipped today.   Let me be blunt:  consider starting a law firm.  No, don't do it now while you're still nursing your wounds; getting axed is never pleasant even when it's not your fault (and hey, we all know that it's economics pure and simple).  But after you've had time to grieve about the past and you're ready to start planning the future, at least give the option of starting a law firm some thought.  Starting a firm is not only possible, and there's probably never been a better time to give it a try. Take a look at my book  Solo by Choice which makes the case for why you should consider starting a firm in today's legal economy and shows how to leverage 21st century trends like technology, outsourcing, social networking, and alternative billing to succeed.  And if you don't believe me, then take a look at this pile of posts from the past five years about biglaw attorneys finding big satisfaction and big success by starting a practice. 

Here are some past posts tand resources to consider:

The Lawyer You Always Wanted To Be:  Inspiration for New Grads and Practicing Lawyers (ebook)

Why You Can Succeed In Your Own Practice Even if You Floundered At Your Job

Why McKee Nelson Associates Should Consider Starting A Firm

Don't Just Leave Partnership Track; Bypass It By Starting A Firm

Biglaw Lawyer Goes Solo

Why 2008 Will Be A Banner Year For Starting A Firm

Biglaw Attorneys Find Happiness in Solo Practice

Biglaw Attorneys Downsize to Solo Practice

Biglaw Attorneys With Big Clients Start A Firm

Biglaw Litigators Form Boutiques

Large Firm Lawyers Starting Firms

They Could Have Stayed At Biglaw But Didn't

From Biglaw to Reproduction Rights Niche Practice

No Regrets for These Biglaw Attorneys Turned Solo

Free ebook on Social Networking For Lawyers (social networking will help you whether you look for a new job or decide to open your own)

If you have any questions about starting a firm or need assistance or encouragement, shoot me an email at elefant@myshingle.com.

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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 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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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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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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When I started this blog, to read the mainstream legal media, you'd have thought that solos were the only lawyers to ever miss deadlines, violate ethics rules or commit malpractice. But I've always believed that all lawyers, from those at ginormous firms to those who practice alone, are all equally prone to making mistakes and committing malpractice. And my hunch is borne out by this article that I blogged about over at Legal Blogwatch that discusses the types of malpractice acts committed by large and small firm attorneys. The good news? Missed deadlines, once a common basis for malpractice claims against solos, are no longer as much of a problem with the advent of cheap computerized calendar systems. Now, most solos face claims for lack of competence in areas beyond their expertise. But as I wrote in my other post, I expect that with blogging and social networking, competence claims will be reduced as well, either because lawyers will educate themselves on other practice areas through blogs, or build relationships with lawyers in different practice areas with whom they can affiliate on a case without losing the client.

For biglaw, I'm not as hopeful. Increased rates means that clients are more demanding about results; they don't want Chevy service at Ferrari rates. And multiple mergers can give rise to conflicts, and rather than letting a client leave, firms will either ignore conflicts or try to find ways to keep clients with diverse interests - which can lead to malpractice actions if a case goes south.

Of course, big firm malpractice isn't something about which we solos should gloat. Increased malpractice actions means higher premiums for all of us, regardless of size.

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Thanks to a lemon of a credit market, associates at McKee Nelsonhave the opportunity to make a huge vat of life-changing lemonade. Above the Law's David Lat is reporting here that NY/DC based McKee Nelson, in an effort to avoid economically-induced, forced associate layoffs, is offering associates two options: (1) a full bonus, plus four months pay to anyone willing to leave the firm voluntarily or (2) a full bonus plus a year's sabbatical at 40 percent of the $160,000 salary. Option 2 carries two caveats; first, the firm cannot guarantee employment at the end of the year and second, the firm wants associates to use the sabbatical to "make the world a better place."

Lat suggests that associates use the time to fulfill their dreams of finishing a novel, or studying painting. But I've got a better idea: what about starting your own law firm and becoming the lawyer you always wanted to be?

Continue Reading...

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I'm not sure whether any of you remember the TV show LA Law . Sometime in the second or third season, the firm's young associate, Abby, was told that she wasn't partnership material so she left to start her own criminal defense practice. A year or so later, Abby had established her reputation as a trial lawyer, and the firm that had once spurned her lured her back (though I don't remember if she became a partner or merely collected a higher salary). Though I watched those episodes before I ever started my own practice, the concept of leaving a firm to build your skills and credentials and then return later, on your own terms struck me as eminently smart.

Back here, I posted on how Supreme Court solo specialist Tom Goldstein brought his practice to biglaw firm Akin Gump - after he'd been on his own for five years and argued more than a dozen cases at the Court. And today, I saw this Press Release about Ely Goldin, a former solo specializing in issues related to the business needs of the Russian immigrant community, who was named partner at Fox Rothschild.

When you start a firm, you may dream of staying small...or building your own empire. But solo practice isn't just an end in itself, it can also be viewed as a phase of your career during which you build skills and increase your value. Making partner after toiling as an associate at a large firm is always a risk. Is it really any more risky to try to make partner after building your own practice?

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I was looking through some of these relatively new books on getting ahead in business and entrepreneurship that Marci Alboher reviewed in her Careers Column for the NY Times. (If you recall, I reviewed Marci's book, One Person, Multiple Careers back here in February). What struck me about these three books - Anti 9 to 5 Guide: Practical Advice for Women Who Think Outside the Cube; The Parentpreneur Edge: What Parenting Teaches About Building A Successful Business ; and Grindhopping: Building A Rewarding Career Without Paying Your Dues - is that not only do they each have their own website (probably di rigeur for most new titles but they are all authored by women who are pushing the concept of entrepreneurship and jumping off the traditional career ladder as a way for women to get ahead. Contrast that "go get 'em," risk-taking mentality with the initiatives within the legal profession for advancement by women at a law firm - like begging for flex time or waiting for "the firm" to come up with ways to help women network.

All of this made me wonder whether women seeking equality at law firms are behind the times instead of on the cutting edge. Because if these books are any reflection of what's happening in the business context, it seems that in order for women to succeed, they need to break the rules, not follow them and make their own rules instead of forcing others to change theirs.

For a previous, related post on a similar topic, see And where were the women solos?

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It's difficult to fully respond to an article like this one,
The Snark: Flying solothat discusses the drawbacks of solo practice because I can't decide whether the author is trying to be funny or is truly pathetic, and pathetically uninformed.

Basically, the article is intended to discourage unhappy associates from making the mistake of starting their own firms. Fair enough. Leaping from biglaw to yourlaw is a major step, one that shouldn't be taken lightly. In fact, if an associate left a large firm to open his own shop and didn't feel apprehensive, I'd be worried that he hand'nt given much thought to the move.

But this article goes beyond highlighting some of the drawbacks of solo practice: it screams about them, loud and clear. Unfortunately, the article is rife with the sorts of stereotypes that I'd assumed that my blog and at least a dozen other solo practice related blogs had put to rest. Consider a few:

Tech Support From the article: But when you go to log in to your new laptop, and it can?t detect your wireless Internet because your router is improperly configured, you can?t just dial the IT Hotline folks, who will solve your problem in five minutes or rush up to your office with a new computer.
The truth: Hello?! Ever hear of outsourcing? Many solos outsource tech support functions. And computers are so inexpensive, that they often have two machines, so that if one goes down, they can keep working.

Client Developemnt From the article: "But without partners to delegate document reviews, memos and revisions to contracts, you?re on your own to find clients and convince them that your skills are worth your freshly discounted $175 rate: Big Firm Lawyer, Small Firm Price!? But convincing people you?re worth that rate is harder when all knowledge and networking and rainmaking must come from you alone. No more team for you."
The truth: When did the firm team ever try to sell anyone's experience but that of the senior partner?

Getting Information From the article: "If a client called with some random question, one little firmwide email later you had the answer." Apparently, this author has never heard of Solosezwhere a network of 2000 solos can find a response just as quickly as a colleague at biglaw - and they won't bill you for it!

Practice AreasFrom the article: So when your old Big Firm clients don?t follow you and hire you to draft their employee handbooks anymore?your particular sub-specialty in the Big Firm days?you better quickly learn how to draft a will, apply for a trademark, and cross-examine a cop on the calibration of the Breathalyzer 2000. The truth: More and more clients are leaving biglaw to for smaller firms because of poor client service and bloated fees. And guess what? Lots of lawyers actually want time in a court room and before a jury - it's experience many so-called litigators at large firms don't have.

Getting PaidThis is the most hilarious of all. From the article: The same is true when you try to collect your own fees from your new clients. Sadly, your letterhead doesn?t scream, ?I Am Part of a Firm of 1,000 Lawyers Who Will Hunt You Down Until You Pay.?" The truth: Hello? Ever heard of money up front? Evergreen retainers? Withdrawing if clients don't pay? Is this Cog-Author really a lawyer?

There are plenty of legitimate reasons to stay at a large firm. Maybe you're at a point in your life where you'd really be struggling without the money and fear that you'll risk your large salary if you leave. Maybe you've finally found a comfort spot after a bumpy ride through law school and other jobs. Maybe you truly enjoy working on complex pieces of a case with other people and don't mind the long hours. I don't denigrate the choices that biglaw attorneys make. But you've got to be honest with yourself - and that's something this article isn't. It's one big, sad and uninformed rationalization of why lawyers at large firms should suck up the downside of large firm life, to toil in obscurity and loan your talent for the rest of your life when you should be owning it instead.

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A while back, I posed the question whether women at large firms have some kind of duty to rescue biglaw and save it from becoming the exclusive domain of white men. Well, here's an article, Women Leaven which suggests that many women aren't doing that. Instead, they're leaving law firms in droves for greener pastures, including starting their own firms. Consider Mae O'Malley, who started her own contract law practice, and lined up so much work that now she's placing other attorneys - to the tune of hundreds of thousands of dollars in revenue a year. From the article:

People were always asking San Francisco attorney Mae O'Malley how she lined up so much contract legal work as she juggled continuing her law career and raising three children. Her secret: As a former in-house counsel, she had built up a clientele, including Google Inc., and was ready for solo work after her third child was born. Last year, O'Malley, 34, created a company built on her strategy, giving her the opportunity to share the trick with the many other women who have asked about it. She opened Paragon Legal Group in September, and already has 20 lawyers working for her on either a full-time or part-time basis, 90% of whom are women. The attorneys make as much as $175 per hour and she expects the San Francisco-based company will have $1 million in revenue this year.
"We have several women who are leaving firms and coming to us," O'Malley said. "We allow them to continue to practice with challenging assignments on a much more flexible basis."

So...should women stay at firms that don't accomodate their families - or leave? I think the answer is pretty clear.

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At the Ms. JD conference that I attended last week, one woman responded to various remarks on the benefits of starting a firm (by some of us troublemakers in the picture) by saying something to the effect that "Starting a firm is all well and good, but if everyone flees biglaw life, firms will be left stranded as the last bastions of male dominated hierarchy." That comment has been bearing heavily in my mind since, making me wonder whether lawyers have an obligation to fix biglaw.

In fact, from what I gleaned from Ms. JD, part of its mission is to ensure that female lawyers are represented in the upper echelon, power branches of the legal profession, such as the judiciary and biglaw. In other words, at least part of Ms. JD's goals is to help women with fight, not flight. And as I posted here at Legal Blogwatch, another group, Students Building a Better Legal Profession just formed, with a mission of changing the modern law firm business model to make it more sustainable and profitable and also allow for a more balanced lifestyle. I support these students and wish them the best. I'm impressed that they're taking charge of their future and that they're optimistic enough to believe they can change it. That passion will serve them well whether they succeed or not. And in fact, back when I was a student, I would have done the same - and indeed, in some cases, I did. But now, I'd rather just practice law than fight or rescue a system that's comprised of lawyers who ought to be smart enough and savvy enough to save themselves if indeed the system is failing (and I'm not convinced we're at that point).

What's your view? Are these students on the right track in trying to change biglaw from within? Or if you don't like how biglaw works, should you choose another option?

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One of the unintended consquences of the expansion of large law firms is that this trend may drive more lawyers to start their own firms. Think about it - though large firms hope that increased size will foster economies of scale and result in savings, there's still a whole lot of overhead involved in running a big firm. So to increase profits, firms will cut non-producing partners from the ranks and raise hourly rates.

So what's a lawyer to do when his clients can no longer afford him? Most of the conventional wisdom that I see here on the web would counsel lawyers in this position to cut clients who can't pay and raise rates even more as proof of value. Fortunately, most lawyers, myself included, don't buy that logic; we realize that there's a market out there for rates that are lower than market but nonetheless substantial enough to make big profits. And that seems to have been the motivation for Simon Bloom, a former attorney at Biglaw firm Powell Goldstein, who just put up a shingle, according to this article, Powell Goldstein Lawyer Steps Out to Open His Own Firm (3/15/07).

Listen to what Goldstein had to say:

"It's always been a dream of mine to go out on my own and offer my services to a wider market," said Bloom, 35, of his decision to open his own firm. He had practiced at Powell Goldstein since 1997. He explained that big-firm rates were pricing him out of what he sees as a "huge middle market."
He said that at Powell Goldstein he billed clients $385 an hour, adding that his rate there was about to increase to $405 an hour. "Only the Fortune 1000 could afford my rates -- and there are only so many of those clients to go around that have real estate issues," he said. His new rate is $295. "If you want a Powell Goldstein-quality trial lawyer, you're not going to get a better deal," he said.

My thoughts exactly.

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Imagine that your law firm issues the following Request for Proposals:

Busy solo practitioner seeking large firm to partner on pro bono matters for small, walk in clients with no funds to retain an attorney at full rates.  Firm must turn these clients down in the absence of pro bono support.  Matters include messy family law and custody battles, eviction proceedings, Fair Debt Collection Act matters, bankruptcy and lawsuits against small business without insurance coverage.  Benefits include court time before sometimes unqualified, nasty judges, (as opposed to civilized federal practice) and learning to prioritize issues, cut corners due to cost constraints and practice law at less than your full ability due to lack of resources.   

Now honestly, do you think you'd receive even a single response?  Yet when large corporation Intel posted an RFP for lawyers to partner on pro bono firms, biglaw came running, according to this article, Intel Recruits Firms for Pro Bono Partnering.  But don't think for even a second that the firms had thoughts of winning a plum client through working side by side with Intel lawyers on pro bono matters:

Similarly, Nixon Peabody pro bono partner Stacey Slater said her firm was motivated by the opportunity to do a good deed, not the chance of winning a new client. "That's not at all why we're doing this," she said. "This partnership will help increase pro bono on both ends."

Do these people even believe what they are saying?

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According to this article, Law school to simulate big-firm environment, University of Detroit Mercy School of Law (2/5/07) will require all third year students to participate in a new Law Firm Program, described in the article as "a series of courses that simulates big-firm lawyering."  The course has been developed with input from large firm lawyers and is intended to respond to the lack of skills training in law school. 

Now, you might think that I object to the program because it teaches about large firm practice, rather than solo practice.  And while I do believe that a school that offers a course on large firm practice, should also have a comparable course work on solo, government and public interest practice, that's no my main criticism.  First, I don't agree with making a course on law firm practice - either for big firms or small firms - mandatory.  While students should have some skills training, they should have the flexibility to choose what skills they want to develop.  Some students may want to focus on trial advocacy or appellate clinics, others may want to learn to draft family law documents.  They shouldn't be required to take a class on what it's like to work at a firm that doesn't interest them or that may have limited value (since every place you work is different). 

Continue Reading...

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