Tom Wallerstein

Lawyers love to give advice. They seem to have an opinion about everything. Lawyers even love giving advice to other lawyers, if for no other reason than they like to gratify their egos. Thus, there is no shortage of advice for junior lawyers about how to most effectively practice law, nor is there any shortage of advice on how to establish and run a small firm or boutique legal practice.

Often, however, the advice is easier said than done.

For example, many scoff at those who fall victim to some version or another of a “Nigerian scam.” We especially shake our heads when the victims are lawyers. But ignoring seemingly obvious scam emails often is easier said than done.

Some scams are hard to ignore because they are so convincingly executed. An attorney friend of mine received a very realistic-looking email from someone who purported to be a potential client in Asia. Google searches confirmed that (1) the client name and his company were real; and (2) the adversary was a real company that did business with the potential client. To make a long story short, my friend ended up with an actual check in hand from the alleged adversary in excess of $300,000. His call to the bank confirmed that the funds were available. The scammer client instructed him to deposit the check, keep his contingent fee (I’m not sure the exact amount, but presumably in the range of $100,000) and forward the balance to the client.

Had he deposited the check, it would have been listed as having “cleared.” It would only be a week or two later, after he sent the balance to the scammer client, that his bank would report that the check was fraudulently drawn, albeit on a real account, and that my friend was liable for the full amount.

Even though my friend ultimately did not fall for the scam, I understand why he might have. He was holding a real check from a real company drawn on a real bank account with sufficient funds. At some point, wishful thinking overwhelms your better judgment.

It’s so easy to slip. It’s so easy to fall into the trap of wishful thinking. This is one reason why ignoring scam emails is easier said than done. Heaven help the fool who hopes against hope that he just hit the lottery and will get an easy win.

I am sometimes tempted to respond to emails that likely are scams because I recall good results that flowed from responding to similar emails in the past. I recently responded, just for kicks, to an email that I assumed was a scam. I was pleasantly surprised that my intuition was wrong and the email has resulted in an exciting and lucrative opportunity for my firm.

This wasn’t the first time I experienced that same dynamic; i.e., ignoring red flags and being rewarded for doing so. I had one client who had what looked to be a relatively small matter. We asked for a very modest retainer, and the client balked. (This was back in the early days of my firm, and I didn’t realize then what a large red flag that was.) After we agreed to a smaller retainer, the client said the check was in the mail, but it didn’t come. He later said it had been lost in the mail, and promised to re-send it, but he didn’t. This client continually promised us that he was sending the small retainer, but never did. This went on for months. We weren’t really working on the case, so I was happy to humor him, mentally writing him off as someone who never intended to pay us.

Fast forward three years. That client finally did pay the small retainer and we did good work for him. Shortly thereafter, his small matter ballooned into a dispute of much larger magnitude. He has since given us a much bigger retainer, and his engagement has become one of the more lucrative for our firm as our attorneys have devoted many hundreds of hours to his litigation. Amazingly, this client now always promptly pays his bill in full upon receipt.

That success story is terrible in a way because it tempts me to make what are likely to be bad decisions. A poker player who makes a foolish bet, and wins, will generally think that he made the right play. He then is tempted to repeat his poor play in the future and obtain predictably bad results. My lucrative engagement resulted only from my ignoring not only multiple red flags, but also my better judgment. Because of that experience, cutting off clients who show that they are likely to be collection risks is, for me, easier said than done even though it is advice I, too, strongly endorse.

The advice to collect a retainer and never work for free is especially difficult to heed when a firm is young, or when work is scarce. In those situations, you can be so excited to have a client that you are tempted to overlook or rationalize the fact that you are not being paid, or paid sufficiently, for your work.

I have written dozens of articles emphasizing the importance of business development generally and networking specifically. But those thousands of words only go so far because doing what I suggest is so much easier said than done. I have suggested that lawyers need to ask for work directly, and I have suggested that lawyers should never be satisfied, should ask new contacts for other contacts, and should follow up on rejections. Those are all simple concepts in theory but having the gumption to act on them is quite another thing altogether.

In fact, the very concept of opening your own solo, small firm or boutique practice does not itself raise challenges which are overly difficult to predict, or pose questions to which the answers are elusive. There is a wealth of information available online that lays out exactly what you need to do to start a successful practice. In that regard, the steps to opening and running a law practice are really quite simple. The problem is that following those steps is far easier said than done.


Tom Wallerstein lives in San Francisco and is a partner with Colt Wallerstein LLP, a Silicon Valley litigation boutique. The firm’s practice focuses on high tech trade secret, employment, and general complex-commercial litigation. He can be reached at tomwallerstein@coltwallerstein.com.


comments sponsored by

8 comments (hidden for your protection) Show all comments