People are always telling laid off or unemployed lawyer to “hang out a shingle” and start their own firm. They say this like it is comparatively easy for young lawyers to just go out there and drum up enough business to support themselves. It’s not, but some people are at least trying.
When clients call Washington attorney Sue Wang, the clock doesn’t start ticking.
Phone calls aren’t billed in six-minute intervals and each hour of work won’t cost several hundred dollars.
Wang and the four other lawyers in Clarity Law Group aim to reconfigure the billable-hour business model at law firms that she said tends to shut out small and start-up companies with shallow pockets.
Yeah, yeah, nobody likes the billable hour — Clarity Law Group purportedly has a “timeshare” business model. Does this mean that potential clients will get a free meal while the lawyers lock them in a room and try to sell themselves?
Admit it, when you hear “timeshare” don’t you think “something for the stupids … or the poors”?
“People have been speaking about the death of the billable hour, but people had been saying that for years and they weren’t really acting on it,” said Wang, formerly of Latham & Watkins.
Clarity Law Group is designed like a timeshare, where clients pay a set fee for access to the entire firm, Wang said. The firm also reduces costs by forgoing the standard luxuries at big-name firms like secretaries, wall art and swanky office space.
Was that a subtle slam at Latham? Is she suggesting that Latham wasted money on luxuries? And when did secretaries become a luxury item? Isn’t it more efficient to have some clerical help doing clerical things while you focus on “lawyer things,” you know, with your law degree?
In any event, without pesky, Latham-like overhead, the group claims to be able to offer legal services at a significant discount:
The model can reduce a client’s legal costs from about $200,000, which Wang and Goodman calculated as the typical price for an in-house attorney, to between $30,000 and $60,000.
Wow, with fees like that, umm… how are they paying rent exactly?
Until the firm grows, Wang and Goodman are funding it with their savings. Based on the demand they’ve seen for low-cost legal services at the small business level, however, they’re confident there will be enough demand to make the firm profitable.
Oh yeah, that’s the other thing people seem to forget about when they extol the virtues of starting their own firms; you’ve got to have money, honey. Whether it’s from personal (or familial) savings, or another loan on top of your law school debt, you need to be able to invest in your new business for a long time before you can hope to turn a profit.
Are there a lot of unemployed lawyers out there sitting around with start-up money burning a hole in their pockets?
New Law Firm Is Designed Like a Timeshare [ABA Journal]
Law firm a low-cost alternative for small companies [Washington Post]