Regular readers of Above the Law know about the class action lawsuits brought against some law schools accused of fraudulently inducing students to enroll. For example, ATL covered the great legal work evident in the dismissal of a lawsuit brought against New York Law School, and the affirmation of that dismissal on appeal.
What you might not know, however, is that cooking schools, including the California Culinary Academy in San Francisco, were defendants in similar litigation long before law schools were. I knew Ray Gallo, the attorney prosecuting some of those landmark cases, so I followed them closely. Those lawsuits established a kind of model for proceeding against law schools. Unfortunately for the cooking schools, their litigation results were significantly worse than those obtained to date by the law schools.
Anyone who has considered opening a solo or small firm practice can’t help but worry whether their venture will be successful. Provided the worry does not overwhelm, this can help keep you motivated and focused.
But focused on what? When considering whether they can run a successful practice, law firm owners should look beyond the math and consider the more philosophical question of how exactly they define “success.”
Of course, a law practice is a business and to that extent its goal is to make a profit. A business that is not profitable is not successful even if it provides exceptional service. An unprofitable venture inevitably will fail, definitely answering any philosophical question as to its success….
I have in my office a framed print of the classic New Yorker cartoon: “You have a pretty good case, Mr. Pitkin. How much justice can you afford?” I often find myself referring to the cartoon when talking to prospective clients.
Last week, I was having a business lunch at Michael Chiarello’s Coqueta overlooking the San Francisco Bay. (Those who know me won’t be surprised that I managed to combine a business meeting with some good eats. I’ll save my restaurant review for another time, or you can read it on OpenTable.)
Anyway, my lunch was with a partner at Leason Ellis, a thriving IP boutique in New York. The firm is a boutique in that the lawyers are specialists in intellectual property; as far as I know, that is their only practice area. But within that subject matter, they have both a litigation and transactional practice. Conversely, with limited exceptions, my own firm has remained a litigation-only boutique since it was founded four years ago. We handle a wide range of subject matters, but only do litigation within those subjects.
What are the pros and cons of running a litigation-only shop? Why haven’t we added a robust transactional practice as well?
Next week my firm will celebrate its fourth anniversary. I can’t believe it has been that long. It seems like yesterday that I was sitting at my desk at Quinn Emanuel, thinking about cases worth millions of dollars but still too small to be economically handled by traditional Biglaw firms. I wondered if I might try to serve a growing market hungry for less expensive but still high-quality litigation. Not long thereafter I was conspiring with my partner over the details, drafting business plans, and conducting informal marketing surveys.
As my firm approaches its fourth anniversary, it’s interesting for me to think back to my early plans and consider what worked, and what did not. What happened as I predicted or hoped, and what was unexpected…
Starting a new firm is daunting. Many lawyers focus on their expenses, and are pleasantly surprised that the overhead and other necessary expenses are less than they expected. But the real difficulty arises on the other side of the ledger because accurately projecting income can be so elusive.
If you’re starting with guaranteed clients, then making projections is easier. But otherwise, you really can’t project your income unless you know the extent to which your business plan in general (and your business development plan in particular) will succeed.
Even if you can accurately project how much potential business you will have, it’s still easy to slip by overestimating your expected income…
By the time I graduated from law school in 1999, I had become rather risk-averse. For example, several of my friends were excited to enter the dot.com world with hopes of becoming uber-wealthy. I eschewed those prospects for the security of a more regular, albeit more modest, Biglaw paycheck. Eighty thousand per year struck me then (and now) as a generous starting salary.
Of course, forming and managing a new law firm is a risky business proposition. But to the extent that I now am fully responsible for generating my own work, I feel like I actually have greater job security than I did when I was beholden to working for other rainmakers on their cases. So even though starting a firm was risky, it didn’t really portend a fundamental shift in my natural inclination to prefer security over risks even if that means foregoing potentially bigger gains.
A law school friend told me about a deposition he defended in Waco, Texas, where the temperature reached 105 degrees. At the time, my friend Geoff was an associate at a stuffy BigLaw firm, and there was never any doubt that he was required to wear a suit. And especially because the deposition was videotaped, the witness did, too.
Plaintiffs’ counsel was the owner of a smallish firm in Florida and he showed up wearing shorts, sandals and a short-sleeved polo shirt.
When they arrived at the deposition location, Geoff and his witness were dismayed to learn that the air conditioning wasn’t working. As the day progressed, the conference room grew increasingly warm. By late morning, the witness was restless and hot and kept firing glances across the room to the dormant air conditioner. The video was priceless; every answer was punctuated by the witness sweating and mopping his forehead. Geoff told me later that he thought his witness looked like he was lying even when he wasn’t.
I’m pleased to announce that the reports of my death have been greatly exaggerated. To the contrary, I survived my surprise three-week trial. It wasn’t a total surprise, of course. I had been expecting a trial, just not one that lasted more than a week.
Not that I’m complaining. Frankly, trying cases is a whole lot of fun. I’ve written before about my passion for trials and the competitive aspect of litigation generally.
That internal motivation is crucial for me. Trials usually require demanding hours, and that is the least of it. Beyond the mere number of hours spent working, I often find trying a case to be exhausting. Not just physically, but mentally and emotionally as well. Whenever you’re not on center stage, say, conducting a witness examination, you are paying rapt attention, thinking and calculating and strategizing. Sustaining that over time, day after day, can be difficult. You have to give your all, and then some. And when even more is asked of you, fate will decide the rest…
I’m not kidding myself that anyone will notice, but I still feel bad about missing my second consecutive post. My trial that was expected to last five days is entering its third week.
Some trials are more demanding than others, and at this point I’m thoroughly stuck in the trenches. Trial days can be awfully long days, and stressful. When you’re going from day to day, just letting it ride, it’s hard to justify taking the time to write a full-fledged blog post.
I’m hopeful that when the dust settles I will be able to extract some helpful takeaways that will provide fodder for future columns. Until then…
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 email@example.com.
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past seven years. You can reach them by email: firstname.lastname@example.org.
Things have changed recently in Korea – a few of our US and UK client firms are looking, very selectively, for a lateral US associate hire. Until just recently, there was not much hiring like this going on in Korea, since US and UK firms started opening offices there. We have already placed two US associates in Korea in the past month at top firms. Most of the hiring partners we work with in Korea do not actively work with other recruiters.
If you are a Korean fluent US associate in London, New York or another major US market, 2nd to 6th year, at a top 20 firm, with cap markets or M&A focus (or mix), or project finance background, and you are interested in lateraling to Korea to a top US or UK firm, please feel free to reach out to us at email@example.com or firstname.lastname@example.org. Our head of Asia, Evan Jowers, was just in Korea recently, and Evan and Robert Kinney will be in Korea in a few weeks. We are in the process of helping several firms open new offices in Korea (a number of which are interviewing our partner level candidates) and also helping existing offices there fill openings.
Professor Joel P. Trachtman has developed a unique, practical guide to help lawyers analyze, argue, and write effectively.
The Tools of Argument: How the Best Lawyers Think, Argue, and Win is a highly readable 200-page book, available for about $10 in paperback or e-book. Chapters focus on foundational principles in legal argument: procedure, interpretation of contracts and statutes, use of evidence, and more. The material covered is taught only implicitly in law school. Yet, when up-and-coming attorneys master these straightforward tools, they will think and argue like the best lawyers.
For most attorneys, time spent managing the books is a necessary evil at best. Yet it is undeniably a crucial aspect of running a successful practice. With that in mind, we invite you to view or download a free webinar by Above the Law and our friends at Clio to learn how to better manage your finances.
Take this opportunity to learn what it takes to streamline your accounting and get the most out of your time. The webinar agenda:
● The basics of accounting for lawyers.
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● Steps to prepare your tax return for your firm’s income.
Do not miss this crucial chance to optimize your accounting practices. Save time and get back to billing!