Carolyn Elefant

There are plenty of good reasons why a solo lawyer should, and indeed must, refer a case to another firm. For example, if a particular case isn’t compatible with your business – either because it falls outside of your firm’s practice area or it’s not economical for your firm to handle – there’s no reason to hang on to it.  And notwithstanding the advance conflict waivers that large firms foist on clients, in my view, conflicts of interest are a non-negotiable grounds for referral, because they “spawn an alarming number of ethics complaints.”

But there are other situations where a solo shouldn’t be so quick to send a case packing, notwithstanding conventional wisdom to the contrary. Here’s a list of examples where you might want to think twice before referring a case:

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Q: You can’t just have a bunch of clients with preexisting intentions to kill someone?

A: Yeah, that would certainly make things more risky for the firm.

– An exchange between Above the Law columnist Carolyn Elefant and Daily Show correspondent Jordan Klepper, in a segment about the trend of small law firms offering “self-defense retainer plans” for gun owners.

(Read more and watch the full, funny clip, after the jump.)

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If you ask a bunch of solos and smalls of their opinion about automated legal-form fillers like LegalZoom, you’re likely to hear one of the following reactions:

Reaction #1: Legal Zoom doesn’t worry me at all. Let’s face it, consumers have always had the option of buying forms – if not from Legal Zoom, then from an office supply store or Nolo. But the clients who come to me want more than a form – they want someone to advise them on options or strategize about their business or to work through a stressful family situation or personal matter. In fact, some of my best clients simply want an ongoing relationship with a lawyer whom they can call with questions in advance of a decision to stay out of trouble to begin with. LegalZoom can’t provide those services.

Reaction #2: LegalZoom? What’s the big deal? I use it all the time. What I mean is that if I get a call from a small entrepreneur – like a mom planning to start a web design business out of her house, or a group of students running a lawn mowing service – who can’t pay for much and really only want an LLC or a basic contract, I’ll direct them to resources online where they can find free forms or contracts – and I might mention automated services like LegalZoom if clients don’t want to take the time to fill out the documents themselves. Sometimes, if clients are on the fence about using forms or hiring me, I’ll walk them through the LegalZoom site and explain that for many services, LegalZoom pricing isn’t that much less expensive when they consider the amount of time that LegalZoom requires to complete the documents, as well as the fact that the fees don’t include attorney advice, an assurance of confidentiality through attorney-client privilege or malpractice protection….

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These days, fixed fees (also known as flat fees) are all the rage in the legal profession. Long employed by solos and smalls for practice areas as diverse as estate planning, business incorporation, trademarks, bankruptcy, and criminal defense, today, flat fees are gaining traction  even with the big boys at Biglaw.

While the benefits of flat-fee billing, including cost certainty, increased efficiency, and administrative simplicity are well documented, there’s not much guidance on how lawyers can implement fixed fees in practice. As a result, many lawyers shy away from fixed-fee billing, fearing that if they charge too little, they’ll be stuck working for free if the case winds up taking more time to resolve than originally anticipated.  Meanwhile, many lawyers who experiment with fixed-fee billing claim that it doesn’t work — largely because they haven’t implemented it in a way that benefits the lawyer as well as the client.

So below are a half-dozen tips to help solo and small-firm lawyers implement fixed-fee billing without paying the price. Though not exhaustive, these suggestions may help lawyers currently contemplating fixed-fee billing get started, or convince those who’ve tried flat fees unsuccessfully to reconsider…

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Most days, I’m proud of owning my own small law firm. And while technically, I’m not a solo — I’ve had an assistant for over eight years now as well as a revolving crew of of counsel, part-time associates and independent contractors — many of my colleagues lump me and most very small law firms into that category nonetheless. So when other solos act foolishly or unprofessionally, it reflects poorly on the rest of us.

Understand, I’m not picking on solos.  Let’s face it — large law firms are hardly paragons of upstanding conduct; one needn’t look further than the recent Dewey & LeBoeuf scandal as proof. But for whatever reason, when Biglaw behaves badly, that conduct doesn’t diminish the reputation of Biglaw in the eyes of judges and other lawyers as it does for solos.  

So that’s why it bugs me when solos do stupid — and often avoidable — things. Here are my top three peeves:

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Let’s say that you started your law firm a year ago, and your business is finally humming along. Meaning that while you’re not taking home a six-figure income, you’re no longer terrified of not making rent.  But lately, you’ve noticed that you’re working more late nights and weekends than you’d like, just to keep pace with the steady influx of cases, law firm administration, and ongoing marketing efforts needed to feed the beast.  Or, perhaps you’ve let your marketing efforts (like networking events, lunches, and blogging) slide because you can’t fit them into your schedule — but you fear that you’ll pay the price later when business slows. Or maybe you wind up working after hours simply because you’re too distracted by client calls and emails during the workday.

Back in the day when I started out, most solos who found themselves in this situation would either (1) suck it up and work more or (2) hire a newbie lawyer, paralegal, or receptionist, even though they might not have the revenues to cover a full-time employee. And in an extreme situation, some overworked solos simply stop returning client phone calls or timely filing motions due to lack of time and got hit with bar grievances. Today, however, solos experiencing growing pains have far more options to manage workflow and help transition to the next level. I’ll explore some of those options, along with the respective pros and cons, in this post…

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It’s one thing to say that you bill at $200 or $500 or $1,000 an hour; it’s another to actually collect those fees. Every time a client fails to pay a bill, you’re effectively discounting your overall rate. And while writing off $500 here or there may not seem like much, over the course of the year it can amount to several thousand dollars – which doesn’t take into account the added cost of chasing down clients to collect from them.

Of course, the best way to avoid getting stiffed is to obey Foonberg’s Rule: Get the money up front. Unfortunately, sometimes, you can’t predict the full cost upfront – and if the expected bill is mid-five figures or more, a client simply may not have that kind of money all in one place. Moreover, taking payment up front won’t guard against a client asking for a refund down the line if you haven’t vetted the client properly. So beyond upfront payment, here’s a list of tips to avoid getting stiffed:

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I like to say that I went solo because I had no other options — but I chose to stay solo when I started a family.

I started my law firm at the end of 1993 because I’d been downsized for economic reasons and couldn’t find another job. Three years later, the economy picked up and job offers came my way — but I was newly pregnant, and the prospect of the 50-hour work week that one of my prospective employers described didn’t interest me at all. So I figured that at least for the time, I’d remain solo because I was certain that working for myself was the best option for raising children.

Fast forward seventeen years, and my conviction that solo practice is a family-friendly work option is no longer as black and white as it was back then before my daughter was born. That’s not to say that I regret my decision – because I don’t. But here, on the other side of child-rearing — with one daughter in high school and the other on the cusp of college — I’ve realized that there’s really no easy or perfect solution to balancing work and family — whether you’re a solo or a big-firm attorney. All you can do is evaluate the facts and make the best decision for yourself and your family based on the facts in front of you.

Of course, when it comes to research about work-life balance, that’s where things get tricky….

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Keith Lee

Earlier this week, Carolyn Elefant questioned the value of joining bar associations. Particularly their value in generating business for solo and small firm practitioners. Elefant found bar associations lacking in regards to business development, and generally seemed sour on participation in bar associations for smaller firms. Though she did note a few exceptions:

“I’m not suggesting that solos and smalls steer clear of bar membership entirely; after all, bar associations provide a myriad of practice benefits including substantive information on practice trends, affordable continuing legal education (CLE), and advice on starting and running a law practice.”

While I’m inclined to agree with Elefant regarding the operation of small firms most of the time, in this instance, I have to disagree….

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Conventional wisdom says that solos and smalls should join a bar association — either the American Bar Association, a state or local bar, or a practice-specific bar (such as an association of telecommunications or criminal defense or real estate lawyers) — as a way to generate clients. Here’s but one recent article that recommends pounding the pavement at bar events to find clients.

I disagree.

I’m not suggesting that solos and smalls steer clear of bar membership entirely; after all, bar associations provide a myriad of practice benefits, including substantive information on practice trends, affordable continuing legal education (CLE), and advice on starting and running a law practice. But if lawyers think that they’ll find business through bar membership, most are sure to be disappointed….

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