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….
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…
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:
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…
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:
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….
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….
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’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….
For those unfamiliar with Virginia politics, Cuccinelli’s controversialpolitical views have given his critics plenty of ammunition. But politics aside, does Cuccinelli’s retainer plan hit the mark as a sustainable or ethical business model? Let’s scope it out….
Recently, a group of Harvard Law professors released the results of their survey of 124 attorneys from 11 large firms, asking what courses Harvard students ought to take to prepare for Biglaw practice. Overall, financial courses such as accounting, financial reporting, and corporate finance, topped the list, as noted by Will Baude over at the Volokh Conspiracy. But the study got me thinking: what courses should lawyers interested in starting a practice — either directly after law school or a few years down the road — study in law school?
If you ask this question of solos or consultants, most will argue that law schools need to teach business-type classes like how to write a business plan or how to market a law practice. And while law schools should certainly make those classes available to interested students, I don’t view them as imperative. Let’s face it, most of this material isn’t rocket-science (high school dropouts open successful businesses, after all), and the web offers a bottomless treasure trove of this type of information. (As an aside, one of my personal faves is Canvarise, a one-page template that pulls together all of the elements of a traditional business plan).
Nor do I believe that substantive courses — bankruptcy, family law, immigration, copyright — are all that important. Substantive law is state-specific, so it’s tough to teach and it’s always changing. What you learn as a second-year law student may no longer be valid a few years down the road. Plus, it’s not difficult to pick up the basics of a new practice area on the fly. Think about it: most students studying for the bar gain a quick understanding of as many as 25 different substantive practice areas in a summer. No reason the same isn’t true in practice.
In my view, law students should focus on studying and acquiring the kinds of skills that aren’t easily found or readily mastered in practice. With that as a guide, here’s my top five list of classes that will help prepare students for solo practice…
If you are considering a virtual law practice, you know that many of today’s solo firms started that way. But why are established, multi-attorney law firms going virtual?
Many small firms are successfully moving part—or even all—of their practice to a virtual setting. This even includes multi-jurisdictional practice spanning several states and practice areas, although solo and small partnerships are still the largest adopters of virtual law.
Can you do the same? The new article Mobile in Practice, Virtual by Design from author Jared Correia, Esq., explores how mobile technology bring real-life benefits to a small law firm. Read this new article—the next in Thomson Reuters’ Independent Thinking series for small firms—to explore how a mobile practice:
Reduces malpractice risk
Enables you to gather the best attorneys to fit the firm, regardless of each person’s geographic location
Leverages mobile devices and cloud technology to enable on-the-spot client and prospect communication
Transitioning in-house is something many (if not most) firm lawyers find themselves considering at some point. For many, it’s the first step in their career that isn’t simply a function of picking the best option available based on a ranking system.
Unknown territory feels high-risk, and can have the effect of steering many of us towards the well-greased channels into large, established companies.
For those who may be open to something more entrepreneurial, there is far less information available. No recruiter is calling every week with offers and details.
In sponsorship with Betterment, ATL and David Lat will moderate a panel about life in-house and we’ll hear from GCs at Birchbox, Gawker Media, Squarespace, Bonobos, and Betterment. Drinks, snacks, networking, and a great time guaranteed. Invite your colleagues, but RSVP fast, as space is limited.
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: email@example.com.
It’s that time of year again when JDs are starting to apply for 2L summer jobs and 2L summers are deciding which practice area to focus on.
For those JDs with an interest in potentially lateraling to or transferring to Asia in the future, please feel free to reach out to Kinney for advice on firm choices, interviewing and practice choices, relating to future marketability in Asia, or for a general discussion on your particular Asia markets of interest. This is of course a free of cost service for those who some years in the future may be our future industry contacts or perhaps even clients.
For some years now Kinney’s Asia head, Evan Jowers, has been formally advising Harvard Law students with such questions, as the Asia expert in Harvard Law’s “Ask The Experts Market Program” each summer and fall, with podcasts and scheduled phone calls. This has been an enjoyable and productive experience for all involved.