Solo Practice Is A Big Mistake For You
Lots of lawyers are leaving big firms to start solo practices. Usually, theyre not leaving the big firm by choice. Theyve departed because theyve been laid off as a result of the declining economy.
Many of these newly unemployed lawyers are making a decision to began a solo practice. One commentator coined the term BigSolo for these former large firm lawyers opening their own offices.
Im getting calls from these lawyers seeking advice about opening their new offices. Sometimes they want to practice family law, sometimes not.
I dont tell them what Im about to tell you, but I think it. Their calls make me remember a phenomenon Ive witnessed many times in my practice.
I have been involved in many cases where the following happens husband loses job, husband looks around for job and finds nothing, husband opens consulting* practice, husband buys lots of office equipment/computers and sets up spare bedroom or executive suite for consulting practice, husband hires a coach to help build practice, etc. I usually get involved when husband doesnt earn any money, wife gets tired of him watching ESPN and she wants out of the marriage.
* Sometimes its a variation on consulting maybe real estate sales or advertising specialty sales.
At some point the consultant finds another job and winds down his office. By then its usually too late for the marriage.
The critical skill they need for success is the ability to generate business.
inon
Paul Campos Using Bartons Data To Paint A Worse Picture
In another article on the subject, Paul Campos of the Lawyers, Guns, and Money blog posted in 2015 that the median solo practitioner was making just $35,000! Note, this is median, not average, meaning that the middle point between the highest-earning and lowest-earning solos is $35,000.
Im skeptical, to say the least. Particularly because its based on the same data as Barton and that already has some holes in it, as pointed out by Diamond above.
Better move on before we get depressed again:
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Fictitious Business Name Statement
If you choose the sole proprietorship route and the business name doesnt have your name in it , you should file a fictitious business name statement in every county you operate. The form is available from your county recorders office. The filing fee varies by county but is usually around $50. Next, advertise the statement in a newspaper in general circulation within the county, which should cost between $40 and $150 dont worry, the recorders offices usually maintain a list of papers to choose from. Go for the cheapest option. The statement needs to be renewed every 5 years. So, the startup costs are about $100 per county.
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Lets Go Solo: Tips And Ideas For Running And Succeeding With Your Own Law Practice
In this episode, Steve Fretzin discuss:
- Top 5 tips and ideas for starting your solo practice.
- Knowing your sweet spot in the marketplace and how to find it.
- Leveraging your network and going after the low hanging fruit first.
- Evolving and changing with the socioeconomic climate.
Key Takeaways:
- Evaluate your strengths and your weaknesses there is always something to leverage or improve.
- Consider rewriting your business plan to take into consideration the state of the world at this moment, it may have changed since last year or even since January.
- Its not about creating a list, its about taking action on that list.
- If you dont have a coach, have an accountability partner to help you to achieve your goals and help them to achieve their goals.
Your level of activity will determine your level of success. Steve Fretzin
Connect with Steve Fretzin:
Myth : Solo Attorneys Are Slackers Who Dont Work Hard
If the comparison is between the life of a solo and a first-year associate that works eighty hours a week, thats not a fair comparison. I dont work eighty hours a week. I usually work about 50-55 hours a week and its rarely much less.
Im usually in my office for about 8-9 hours a day, with no lunch break. I also usually work another 1-2 hours at night after the kids go to sleep. I also teach two classes at a local law school and write for Lawyeristwhich usually happens at night or on the weekends . And dont forget about , networking, and presenting CLEs.
Im not saying young associates at firms are not required to do marketing, networking, and all those extra things, but I think its much more critical to creating and sustaining a solo practice. At a firm, it might be a plus if you do those things. If you run your own practice its a necessity.
Frankly, it would be near-impossible for a true solo attorney to work on active cases eighty hours a week on a consistent basis. There would be no time for client intake, marketing, networking, blogging, managing your finances, etc. Id say I spend about 30-40% of my time on all of those things.
So yes, most solo attorneys do not work 80 hours a week on active cases. But they probably spend 50-60 hours a week on lawyering and running a business.
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Taking Your Solo Law Practice To The Next Level
Running your own law firm is hard enough work, but with the recent shift in just about everything, you might be wondering how to take your solo law practice to the next level.
Keep in mind that:
to maintain your solo practices good reputation, youll have to be choosy about the attorneys with whom you work. Their work and conduct will demonstrate to others how you like to run your business
Whether youre looking to boost your online presence or streamline administrative processes, we have a few tips for you to keep your law practice humming.
Read the article in Solo in Colo:
LawBank is Colorados premier community for independent law firms in Denver and Las Vegas. Learn more about our locations, membership and other law firm real estate solutions here.
Invest In Your Education
Law school may be over, but the business of law and the world of legal technology are always changing. To hear about new ideas and tools for improving your practice, spend an hour attending a webinar or a podcast, spend a day at a local bar association event, or take a trip and spend more than one day at an event like theClio Cloud Conference.
What you learn may be more rewarding than you think: Just look at how Chris Trebatoski has doubled his law firms revenue, largely due to learnings he picked up at the Clio Cloud Conference.
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How To Manage A Law Firm: Business Operations
Once your firm is established, the work of running and growing your firm continues. Too many lawyers delegate the management and financial operations of their firm to a third-party. This is a mistake. While bringing help is important, you want to make sure you understand your business from the inside out.
Step #7: Finances
As a business owner, youll need to understand the numbers.
Weve heard too many attorneys suggest that they choose law school to avoid numbers. As a business owner, you should be excited about your numbers. Your business exists to make a profit. You want to know that your firm is profitable and financially healthy, and if not, what levers youll need to pull to change things.
To do this, put sound financial practices for your business in place. This means:
- You have a documented long-term financial strategy and profitability model that aligns your short-term budgets and reports with your firms long-term goals.
- You have access to sufficient capital and cash flow to fund your firm for the foreseeable future .
- You follow written budgets and regularly monitor consistent financial reports and financial KPIs.
- Your invoicing, payment, and collection systems focus on your clients payment preferences so they will pay their bills on time.
- You pay yourself a consistent market-rate salary, separate from bonuses or distributions, and youre investing an appropriate amount of your pay towards savings and retirement. Paying yourself isnt optional.
Reassess Your Hourly Rate
Whether youre just starting out, or whether youre a seasoned attorney, knowing what to charge can be difficult. As a solo, you can ask what others in your area are charging at bar association events, but youll also need to consider your business goals, your expenses, and the number of billable hours you expect to book. You need to charge what youre worth to build a successful and profitable business.
Weve outlined a few thoughts on how to decide how much to charge here, but its also worth looking at hourly rate data from the 2019 Legal Trends Report, which used aggregated and anonymized data from tens of thousands of legal professionals to give lawyers a clear look at market rates.
As a starting point, compare your rates with data from the report using ourLegal Rates Benchmark Tool.
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Tweak The Way You Get Things Done
Reassessing and optimizing your business processes may not seem like a quick undertaking, but by keeping your long-term goals in mind and taking a consistent, iterative approach to optimization, you can make big changes before you know it.
Take Palace Law, for example. The firm is constantly iterating on its client intake process: What started as a paper-based process became one based in Google Sheets and Clio, which became one that incorporates document automation to automate the client intake process from start to finish. In 2017, they saw a 76% increase in year-over-year revenue in just 3 quarters, which Palace Law attributes to changes in its client intake.
Want to see how they did it? Read their story here.
Start Using Legal Technology
The technology tools available to law firms are advancing faster than ever before. With the right tools and processes, your solo practice can be more efficient and profitable than you ever thought possible.
It all starts with practice management software, and its essential to choose a solution thats constantly improving in order to ensure youre investing in the future success of your law firm..
As Jordan Couch of Palace Law puts it, ou need practice management software, and if your practice management software wont link directly to , then youre starting off on the wrong foot and nothings going to work.
Combine practice management with a solid client intake solution like Clio Grow and youll be set up to provide a solid experience for your clients throughout the whole client journey, from intake to invoice.
We published this blog post in January 2018. Last updated: November 10, 2021
Categorized in:Business
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Dont Turn Down Opportunities For Contract Or Part
Im sure, at this point, youve heard the term side hustle. For my generation, having a side hustle is a must if you want to get ahead of student loans, start a business, or save for rainy days.
Starting any new business is going to mean ebbs and flows of the cash flow. You might have one week where you bring in $13,000 in new business, followed by three or four weeks where you bring in zero dollars.
Hence, the side hustle. Its a great way to cushion the blow of irregular cash flow.
There are countless start-ups catering to part-time legal work now: Companies that provide appearance counsel, law clerks, or just temp gigs for lawyers. Or ask around to other lawyers in your community and see if they need help with research on big cases, or sorting through crates of discovery. Also consider doing some freelance attorney on work the side.
Take on some of this work, if you can, so that you dont end up in dire straits when your law firm revenue slows down for a month or two. But, dont overcommit eithermany of us overconfident lawyers tend to think we can handle every single job that comes in the door, leaving us with seventeen side hustles and no clear path to building a successful, sustainable law firm business.
Should You Start A Law Firm
Your first question: Are you ready to own and run a business? Really and truly?
Law practice is a business and a profession. To start your own law firm successfully, you must agree to see it as both.
The skills that it takes to run a business arent the same skills it takes to practice law. While many of the skills you need to practice law will help you in your business, running your business will require you to tackle different problems than practicing law. And these challenges dont go away as your business matures and grows. They just change and challenge you in new ways.
Think about his: One December 23rd, an exasperated attorney called Stephanie, frustrated that the associate had spent so much time training had just given notice. Listen. I just want to practice law and maybe do some business development work. I dont want to deal with all this other stuff!
And this attitude is just fine if youre working within a firm that you dont own. But owning a business will require you to deal with all the other stuff. Are you ready to take on those challenges? Of course, its absolutely OK to decide that you dont want to or like doing the work of running a business and decide to not start a firm.
So, before you jump in, ask yourself:
- Do I actually want to be involved in the entire running of the business?
- Am I committed to being a business owner and leader not just an attorney?
- Do I consider the time I spend working on the business as important as my billable work?
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Starting A Solo Law Practice Is Not A Solo Endeavor
One of the most important lessons that I was fortunate to learn early on is that, although the phrase solo practice implies going it alone, for successful solos, success is always built from community. My hope is that, through sharing my story and what I have learned, I will be able to contribute to the community of solo practitioners. I owe my success to lawyers who came before me, who mentored me, who gave me contract and appearance work, who gave me office space in exchange for labor before I could afford an office, who gave me forms, who gave me best practices, whose examples I followed, who talked me down from ledges and through messes of my own making, and from whom, at times, I took ideas and drew inspiration.
The word success is a flexible word when it comes to starting and building a solo law practice. For some attorneys it means being their own boss and having control over the matters they accept. For others it means making a decent living, say $300k per year. For others, starting a successful solo law practice is a stepping stone to building a much larger firm, filled with many associates, that generates tens of millions in yearly revenue. And each lawyers definition of success may evolve through their years as a solo practitioner . Some lawyers look at success as a constantly moving goalpost, while others are quite content to reach theirs and maintain it over the course of decades while enjoying the fruits of their labor outside of the law.
Look For Referrals And Gain New Expertise
Do not rely on your existing list of clients, if you want to grow your law firms business. You should always be looking for opportunities to acquire new clients. To do so, tap into your network of colleagues. Cultivate referrals from your legal peers.
Besides exploring other lawyers, do not hesitate in asking your friends from other fields such as business and realtors. You can even have an occasional chat with your parking lot attendant, who may one day suggest you a client.
Sometimes a hearty face-to-face conversation with your friends and people around can give you some clue about the potential clients.
This way, you will start getting client referrals. Do not forget the importance of word-of-mouth publicity, which works well in the legal profession for starting a law practice. Also, think of expanding your legal expertise on fields other than your core legal field.
Do not be satisfied with your existing law firms business and list of clients. In legal profession, you must always be looking for ways to expand your legal expertise in other fields.
Since, you are running a solo law practice its earnings will depend a lot on the number of clients you get. If your expertise includes dealing with other legal areas such as crime, divorce, business related cases, etc, it will help you make more money on your own.
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Determine The Tools You Need To Start Off On The Right Foot
Are you already a practicing attorney? You may have ingrained preferences for certain legal software tools that you want to carry over to your solo practice. Check the cost and see if it is something that a solo can bear. This is also a good opportunity to migrate from an old school platform, like Time Matters, that your prior firm forced you to use because the partners were familiar with it.
Most solos will be better off starting with a cloud-based legal practice management platform, like Clio. For tracking time, hourly billing, trust accounting, and sorting out client files, a do it all platform like that will save you immense amounts of time over trying to handle things with an Excel spreadsheet.
Keep in mind though that what works for one attorney might not work for another. I now run a volume-based practice that relies desperately upon automation, especially since hiring any support staff is difficult, if not impossible, during a pandemic. I cannot live without my CRM/marketing automation platform, Lawmatics, though many other attorneys I know, who are less focused on automation, prefer Clio Grow.
People frequently ask me for recommendations. Depending on the type of practice they want to run, one platform might be better than the other. But typically, it all boils down to setting up demos with all of your options and taking a couple of hours with each to see which one fits your ideal vision of a practice and workflow.
