MyShingle : Solo and Small Law Firm Management and Marketing

Go east, young lawyer if you want to start a law firm.  As this article reports, a recent study released by the Pope Center for Higher Education shows that North Carolina needs more lawyer in light of recent population growth and a strong economy.  The catch - only graduates of accredited ABA law schools qualify to take the North Carolina bar.  And while the bar accepts comity, waive ins don't come cheap - expect to pay $1500 for comity admission.

Have you moved to a new state to take advantage of the economy? In what circumstances would you consider it? And North Carolina readers - is the article true? When it comes to law practice, is North Carolina a better place to be?.

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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?

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Q:  I'm only applying to law school now, but I am hoping to open up my own general practice as soon as I graduate.  Here is my situation:  I am fairly sure that I will be admitted to a law school in the city where I am intent on living and opening my firm (School A), as well as another law school in the middle of nowhere and hours away from my preferred location(School B).  School A costs 27k per year and School B costs 11k.  Both schools are similarly ranked 3rd/4th tier.  Should I go to the school with less tuition (and thus, less crushing debt) or go to the school where I can establish a network (potentially allow me to make valuable connections for business)? I want to take on less debt  so I can take bigger financial risks opening the practice, but I also want that network and feel that I should know the area before I begin to set up a firm there.  More specifically, I would like to know whether having prior local work experience in law school, through an externship or clinic helpful to starting a practice, or can I just pack up and move to any city and start drumming up business?

A:  Nothwithstanding the difference in cost of roughly $50,000 (figuring 81,000 in tuition at School A versus $33,000 for School B), I believe that you should attend School A.  Here's why.   

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

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A reader writes:

Do you have any recommendations on how to pick up contract work from local attorneys or solos?  I want to approach local firms to see what their needs are for subcontracting out work.  Do you have any ideas on how one should go about doing this?  I'm not looking to do contract work full time, but only for supplementary income until I get my firm off the ground.

Like my colleague Jon Stein, I've learned about contract work from both the giving and receiving end.  This experience has given me some strong views about what works and what doesn't.  Here's my advice below:

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Solo Wannabee wonders whether you can start a law practice part time.  Surprisingly, the conventional wisdom on this question is no, that solo practice demands full time commitment to make it and that client demands are full time.  But that's not my view.  As I've said before, there are as many right ways to hang a shingle as there are shinglers - and a part time practice can work just fine provided you manage expectations properly.

One of the misconceptions of part time practice, and one that I made myself when I was working part time, is that part time means a twenty  or twenty five hour billable work week.  But that's not the case.  I mean, you could just work 20 billable hours a week - but what happens when that work dries up and you've not been diligently marketing? 

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Below, a reader writes in with advice on some frequently asked questions related to solo practice.  The reader's questions and our answers are interspersed below.  Readers, since I've only started one practice, after all, I'm the first to admit that I'm not an authority on all ways to go solo.  What I've learned from blogging here and meeting other solos is that there are as many routes to success as there are shinglers.  So please write in and send comments that reflect your own unique experience. 

(1) My spouse and I have set one year as our goal to start the firm - we want to save at least six months of expenses before we take the leap.  Is that realistic or do you think it will take more time to get up and running?  How much capital do you think one needs to get started?

Though I've seen other numbers, saving to cover six months of expenses seems reasonable.  Sure, you could wait until you've got a year's worth of expenses covered, but as I advised this reader, there's always a tradeoff between waiting and getting started.  You don't want to start out on the wrong foot with insufficient savings but at the same time, you don't want to put a firm on hold permanently as you save and build up clients. 

In terms of capital, it's relatively easy to start a small firm on a shoestring these days.  I'm guessing that you and your wife have at least one home computer that's powerful enough to be transformed into a work machine.  And with computer prices falling, you can even purchase a decent laptop as a second office machine for $1000 or less.  You'll also need to pay malpractice, the cost of which will depend upon your jurisidiction, state and practice area, but can probably be located for $200/month or less starting out.   Other expenses would include business cards, stationary, phone service (here, you can use a cell phone if you already have one),  and  potentially office payments (see response to  Q. 4)  And then there's health insurance if you and your spouse will both be self-employed.

One suggestion I'd make given that both you and your spouse are considering a firm is that you stagger your start up.  For example, if you are both employed, you could leave your position and hang the shingle, while your spouse would continue to work for another six months to a year.  You'd have the benefit of insurance coverage, plus your spouse's earnings could go into the firm.  Perhaps, thereafter your spouse could leave or cut down to part time.  This would give you both the ability to get your practice started with some set revenues still coming in the door.  Then, you could work to wean yourselves off your spouse's salary to full dependence on law firm income.      

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Editor's Note:  Recently, I've been receiving a number of inquiries seeking advice on starting a practice.  I'm going to try to address as many as I can, as quickly as I can, in what will hopefully be a regular "Questions & Advice" column.  If you send me an email with a question, try to eliminate any identifying information so that I can use it in a column.  I'll get in touch with you prior to posting, but it will make my job easier if I don't have to reformulate questions.  With that, my first question topic is how to handle the naysayers, particularly when you're a relatively new attorney.

Reader Question:  I am not happy with my current position and for three months have been working on this idea of starting my own firm.   I feel confident in my abilities to competently represent clients in my practice area, even though I've only been practicing for just over one year (it's a field where I have personal experience and which I worked in during two summer law clerkships). 

My plan is to begin in a home office, use web-based case management software, and digital phone - all of which will make it easier to move when I (hopefully) can afford a "real" office.  I am single so I do have think about things like paying for my own health insurance, meeting my rent, paying my student loans, and putting food on the table.

I was quite confident in my ability to do all this by the end of this calendar year.  But a colleague who started her own practice as the same age as I am advised me against it,  saying that it's harder than anyone can imagine to get clients and to manage your own practice.

Now, I'm scared.  Even though I do not doubt my legal abilities and even though I know I can and am willing to work for hours each week and I get so excited just thinking about my own practice, I'm back tracking from the idea.  I know that success can't be guaranteed, but now I wonder whether I should wait until I have more money saved up or I have my own client base I can take with me to a new practice before I go solo.

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Ann Israel, a biglaw recruitment attorney who writes a column for New York Lawyer typically responds to questions about how to make partner or what's the best law school to choose.  It's rare that she gets a question like  this one from an attorney wondering whether he should go solo after his first year out of school.   Ms. Israel is biased against solo practice, so predictably, she advised against the move - but I was surprised to find that I don't disagree with all of her advice.

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Gee, what should  this advice seeker and recent grad (at NY Lawyer) do here?  Work for $19 an hour doing document review at a large firm in hopes of getting some experience?  Or continue to look for a more challenging permanent position?  Uh, what about the most obvious option:  working for yourself.   Even if you have doubts about finding clients, court appointed cases pay $60 or more in New York.  And you could also find lawyers to pay a bar admitted attorney at least $30/hr to perform legal research or writing or make a court appearance.  Plus, what better way to find a permanent position than to involve yourself with all of the networking needed to start a law practice?

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David Swanner,  a South Carolina  solo weighs in with some good advice about starting a practice out of law school over here at his web log, South Carolina Trial Law.  David knows about going solo after law school first hand - because he's done it successfully.

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One of our readers writes:

I graduated law school last year and am finishing
up another graduate degree...and am
taking the bar this summer.  For law students with
little "real world" legal training (some law
clerking), any advice on going solo out of law school?
I read on your site about attorneys getting $40/hr
court appointed cases, but I much prefer non-trial
work.

For starters (and even though my reader didn't ask this question), I harbor mixed feelings about attorneys going solo immediately after law school.   On the one hand, I absolutely believe that with enough determination and desire, going solo after law school can be done successfully (and when my archives return, I'll post to links to stories about where that has happened).  Moreover, for new graduates who've had careers prior ot law school and potential contacts through that experience, going solo right after law school may be the best way to capitalize on prior work experience. 

At the same time, however, I don't think going solo is an optimal situation for new graduates.  It's not so much because new grads lack legal experience but rather, they haven't yet developed contacts in the legal and business community.   Going solo is exhilerating, yes, but it can also be demanding and nervewracking.  It's tough enough to try to master new skills and run a business and market while at the same time havingthe added burden of introducing yourself to  other lawyers in the community and establishing some credibility with them. 

A post-law school job - even one that only lasts a year or two - can help a new grad establish presence and credibility and get paid for doing it.  For example, if you work for a judge after law school, you have an opportunity to meet the dozens of lawyers who appear before the court.  You also have a chance to join the local bar and perhaps organize CLEs or other events which is a great way to get to know colleagues.  All while you're collecting a paycheck.  Same is true for a post law school job at any firm big or small.  The second advantage of working for a spell before starting a firm is that your former employers can serve as references for the quality of your work if someone is thinking abour referring a matter.

Having said that - and getting to the point of the question - there's much that  new graduates with no interest in litigation can do to get a practice off the ground.  For starters, they can seek out contract work - either a large document review project or work for other attorneys.  If they're interested in probate matters, they might want to try to set up a relationship with a PI or immigration attorney and see if those attorneys will refer their clients for wills and estate matters.  New grads can also give talks on business start ups or T&E matters to community groups as a way to drum up business.  And to gain skills, many jurisdictions offer inexpensive or free pro bono training on a variety of areas, including bankruptcy, wills and guardianships which teach the basics.  Usually, the only cost is a commitment to take on a case or two pro bono.

This is just a quick answer - and not entirely comprehensive due to time constraints.  Therefore, I'd like some feedback from readers on tips you have on getting started after law school - and of course, any success stories you might be willing to share.  And of course, keep reading MyShingle.com (and our online guide) for new tips on starting a firm, as they emerge.

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