Monday, January 25, 2010

Going Solo: 4 Things To Keep In Mind

In this earlier post, we discussed Solo Practice University (SPU) and whether taking some of their classes might be helpful for a newly-minted JD looking to go solo.  Since the article was posted, we have had a number of solos commenting and I have reached out to a few attorneys that I know who are in solo practice.  I have attempted to distill their wisdom into four broad categories that I describe after the jump.  I hope that this will be of interest to those considering solo practice!

Here are the factors that were repeatedly raised by the solos that were viewed as critical to success - with the more important factors first:

1) Clients are absolutely critical
Virtually universally, the number one issues identified by the solo practitioners and commenters revolved around getting and keeping clients.  It was viewed as much less risky to start a solo practice when you already have established a client base at your firm that is portable to your new practice.  Further, even if you do not directly take clients with you, having several years of experience at a well-known firm was viewed as helpful on a networking basis and to establish credibility and to get some name recognition in the field

With regard to client marketing, it seems to be a very widely-held view that most traditional advertising is not worth it, especially if you are not in a niche practice.  The larger firms have the ability to pool their money and dominate most advertising mediums - including the newspaper, radio, TV and increasingly the internet.  The exception to this appeared to be when someone has a niche practice - like equine law, for example.  This is understandable if you think about the Yellow Pages, for example.  There might be adds for 100 personal injury firms, but maybe only one or two firms practicing equine law.  In the former example, there are too many other competing ads for you to really stand out and for your add to be effective.

Networking seemed to be extremely important as a source of new business referrals.  Some of the more effective networking strategies included: approaching pastors or other religious officials and getting them to direct work to you, especially trust and estate (TE) work, but also personal injury (PI) and social security (SS) benefit work. 

Some solos also experienced success approaching employers and offering lunch programs for the employees.  The lunch programs were pitched as educational/know your rights with regard to real estate, PI, TE, SS.  The employees often did not know their legal opportunities and often passed the attorney's materials out to their friends.  This also helped at least one solo build a primarily immigration law practice - which then branched into other work as the clients became nationalized.  They also got a lot of referrals due to the trust that recent immigrants placed on word of mouth. 

Additionally, some solos choose to co-market with other solos or small offices in related fields.  For example, co-marketing with several independent accountants/tax preparers.

With regard to getting referrals, several solos emphasized that the new solo would need to go where there is less competition.  For example, a corporate/securities attorney went out to the suburbs and was able to get referrals from several attorneys in his area that practiced in different fields.  Conversely, a new real estate attorney that is fighting already established real estate practices is going to have a tough time.

Additionally, several solos found themselves in a part-time in-house-counsel arrangement where the solo would work as a small or mid-sized company's HR head (for example) for a few days of the week - or even as the general counsel of a small company.  These arrangements were often pretty highly regarded because most of the time the company provided the solo with space and resources that could be used for other clients as well.

Also, an ability to be flexible and quickly learn new areas of the law was important.  What a solo starts out doing may not be what they make their money at - they have to adapt, to change, and  to sell their clients the services that they want to buy.  For an example, look to the firm that I mentioned above that started out as primarily immigration law, but evolved to primarily personal injury.

2) Legal Practice Systems Experience
By this I mean an understanding of the potential solo's bottom line - not just the top line - and how it can be improved by business knowledge and decisions.  These would include, but not be limited to the following:
  1. What billing system, word processing system, IT system, etc. is most cost effective? - Both installation AND maintenance.
  2. Getting the bills out on time.
  3. Managing client, firm, and retainer accounts.
  4. Offering client incentives to get them to pay on time.  
  5. Accepting credit cards.  
  6. Managing the law firm's cash flow
  7. Steering clients toward an earned-on-receipt retainer 
  8. How to get maximum value out of part-time hires like a secretary or paralegal
  9. Having intake and other notification/agreement letters to minimize liability and maximize client understanding
  10. Shifting the grunt work onto the client where possible to save time/money

3) Personal cash-flow management 
The ability to survive on a varying income and/or with very little revenue in any one month was also seen as an important skill.  In general, the successful solos wanted to have the lowest monthly personal costs so that their personal cash needs did not overpower what the practice would deliver during a cash-drought.  Also, the solos were pretty universal in suggesting that a cash-drought was likely to appear during the first few years of practice - or even later as client demands, demographics, or referrals fluctuated. 

The solos compensated for the variable cash flow in a variety of ways.  For example, the lower the house payment and the greater the nest-egg that might throw off some interest for living expenses, the better.  Additionally, some solos were able to rely on a spouse with a reliable job, or a first pension, such as a military pension to provide a monthly cash-flow floor.  (You can apparently get a military pension plus health benefits after 20 years of service.  If you went in at 22, you would only be 42 at that time.)  There were also solos that relied on cash infusions from relatives.  One nomadic solo also does house sitting on the side in order to minimize her living expenses.

4) Success probabilities
The odds of success were suggested to be less a pure measurement of time in a firm, and more a question of whether or not the attorney had learned the business skills and was able to attract clients.  In a firm with great training, it was suggested that it could happen in as little as four years.  Conversely, in the typical BIGLAW firm that churns and burns its associates without providing much training and does not expose them much to the business side of the law, the associate may not be prepared to start their own practice even after eight years.

The solos that I spoke to were pretty universal that starting a solo practice right out of law school was not going to work.  They suggested that a smart person could eventually learn the right business systems for their practice through trial and error and learn how to attract clients, but that the effort would take money and time - neither of which a new law school grad has.  Several of the solos suggested working for free or at a reduced cost on a part-time basis for a solo or small firm with a similar practice (while having another non-legal job to pay the bills).  This was viewed as part of the necessary learning experience - one solo described it as "At least you aren't burning your own capital on a law firm without knowing what you are doing and you aren't paying tuition anymore."  Once the prospective solo had learned the ropes, then they might be prepared to go out on their own.  Specifically recommended as mentors were older members of the bar who might be interested in leaving the practice in a few years - and may want to direct their clients to you at that time.

Well, that about sums it up.  I would be interested in any comments that solos might have in addition to those above.

Also, here are some links that might be helpful to those considering solo practice - good luck!
  1. ABA Solo and Small Firm Division 
  2. Blog - How To Start A Law Firm - and no, I didn't pick the blog just for its layout!
  3. My Shingle


  1. Wow. This is a really helpful post. I will keep these in mind as I trrrrrrrrrrry to do my own thing. I'm not willing to call myself a solo yet, but hopefully I will get some clients in the near future (through networking).

  2. The market is so saturated. As I type this, I am looking at the local Yellow Pages. Attorneys are listed on pages 75-141. The front and back cover are also Attorney advertisements (from different law firms). How the hell is a recent law school graduate supposed to compete with that?

    With no client base? With no startup funds? Who can sustain 2-4 years of negative income? Your person of average means CERTAINLY CANNOT afford to lose money for a few years - especially while paying back his student loans!

    Furthermore, law schools do not adequately teach students the basics of running a business, meeting payroll, marketing, sales, etc. And law schools do not teach people how to practice. So clients are left to suffer because law schools prefer to "teach" 75 students in a class by having them read appellate opinions and having them regurgitate the facts and history in class.

    That is what is happening right now. Just look at how prosecutors and judges treat new lawyers - they get no respect because everyone knows that they don't have the skills or competence to outgun them in court. "We don't need to make a deal with this guy. If he decides to take this to court, we'll shred him."

    If you keep losing cases, or charging your clients money to do something they could easily do themselves, i.e. plead out and ask the court to be lenient, then you will not be in high demand. So much for a prosperous career as a sole practitioner.

  3. Nando - You make some great points! The market for many legal services is completely oversaturated. With 66 pages of lawyer adds, there really isn't any way that noe alw grads can make themselves heard in a traditional advertising medium like the yellow pages.

    Also, you are right on that without a client base and startup funds - and with student loan payments - the odds are very long against any startup formed by a recent grad suceeding.

    You also highlight one of what I believe to be the worst failings of most law school - they don't actually teach you how to be a lawyer. They teach you a little of the law, but typically nothing at all about how to pratice it. All of the aspects that you mention certainly should be part of a law school's curriculum. It feels very disingenuous because the law schools send the message of "we will teach you to be an attorney", but they certainly do not. In fact, they don't even seem to acknowledge their terrible failure in this regard. Some people imply a cynical motive to the law schools, but I think that those people might actually be being too kind - they are implying that the professors HAVE the knowledge, but just are not teaching it. However, in my experience, the professors don't actually have the knowledge of how to run a law firm. Many of them were hired right into academia out of law school or out of a clerkship. Others got bonged from law fims as associates - typically before they had any meaningful business experience. Also, I think that they fail to appreciate the importance of business skills because 1) they didn't need them in academia, 2) they think that they know everything that a lawyer needs to know, 3) they have kind of an "it's beneath me" attitude, 4) there is no space for it on the US News rating, and 5) other law schools aren't doing it - and law schools are pretty much lemmings.

    However, Nando, I don't think that you would disagree that a lawyer with about 8 years of firm experience that has knowledge of the business side of law and has some of his own clients has a decent shot at making a successful solo practice. It's just not very viable for a lawyer right after graduation.

  4. When I was in law school and doing my interviews, I was told with some regularity not to try to go solo without at least five years of experience (Based on my practice area. I did hear on occasion that if I had interest doing solo litigation instead of transactional work, three years working under someone might be sufficient). The professors and associates who gave me that advice all operated under the assumption that I would work in a law firm and have that opportunity. The majority of my classmates never heard that same message, and before graduation I heard one of my deans telling students they were ready to practice. At one point, I remember someone (and I can’t say for sure whether it was student or faculty) that maximizing student loans before graduating might be a good way to get the start-up capital needed to go solo.

    I hate to divide it in terms of generations, but it seems like older attorneys (i.e. the dean) believe that law is viable as a substantially learn-as-you-go proposition, whereas the professors and associates under the age of forty recognized that, at least in specialized practice areas, law school teaches very little that can be practiced immediately. I'm particularly considering licensing and patent law (two of my favorite classes), wherein the potential mistakes in ones work aren't apparent for a few years, at the least, and it may be decades before a patent ends up in court, or a license is sued over. Without time spent seeing how those documents can go awry, new graduates are essentially dangerous, and the clients best able to pay (typically the most sophisticated clients) are unwilling to take the risk. The dean (who, to the best of my knowledge, never practiced anywhere before going back into school) assumed any graduate who took the intro course in his or her preferred field knew immediately what to do upon passing the bar – the same fallacy that state bars themselves encourage.

    One attitude I’ve seen a lot during recent months has been the attitude of successful attorneys ten to fifteen years in practice. Because they’ve had great success (the vocal ones, at least), they claim that continued success is inevitable (logical flaw 1) and that any similarly industrious person can achieve identical success (logical flaw 2). I’ve heard several argue that they wish they had skipped the [X] years of working at a firm for start-up capital and launched a solo career immediately. It seems to me that these (again, very vocal) attorneys are convinced that new grads are seeking to work for others only so they can gain access to start-up capital, not for practical experience. They tend to expound the glories of solo practice that can be achieved immediately upon graduation as inevitable, and are convinced that working for someone else delays those riches, rather than makes them actually viable.

    I also want to touch on your point regarding professor attitudes about teaching practical skills: You’re probably right. But there’s also an (additional?) argument to be made that the communication between professors/administrators, career services, and alumni regarding what practical skills are necessary and what skills should be electable is severely lacking or absent. First year courses focused heavily on research and memo writing (for me, anyway), which is essentially the only job training necessary for students who will get picked up through OCI. I don’t get the impression that there is much in the way of success reporting from students outside of the OCI ranks regarding the skills absent or useful from coursework that ultimately got them a job or prevented them from securing an additional interview. Without stronger reporting to career services and administration, the professors have no incentive to adjust taught material because they have no reason to believe it will add any practical value for students.


  5. Hi Ford,
    "At one point, I remember someone (and I can’t say for sure whether it was student or faculty) that maximizing student loans before graduating might be a good way to get the start-up capital needed to go solo."

    Wow. My first reaction was "what planet does that person come from?" At least if they used the student loan funds to go to Vegas they might have some fun while losing their shirt.

    With regard to the different reactions of lawyers of different ages, I have had the same experience. The older lawyers present information that may have been accurate at one time, but no longer reflects reality.

    With regard to the successful startup attorneys, great job recognizing that their firm experience was providing them with more than just capital. Also, (and we haven't mentioned this one much) my belief is that clients (especially older oner) don't necessarily care for young-looking (mid-20s) attorneys. They want attorneys that appear experienced and often judge the attorney by how they look. In this regard, just waiting some time until the lawyer looks older could be of benefit.

    Finally, with regard to law schools teaching practical skills, I think that you accurately portray what most law schools do - they only worry about the students getting their job through OCI - and after that the have no more concern. This is a distressingly short-term view. Instead, the law school should realize that whether the law student goes solo or makes partner, they are eventually going to need the business skills - and that having those business skills will make the lawyers more successful. If you want to give the law schools an incentive, we can mention that more successful lawyers are more likely to give money back to the school. Lawyers who get a good first year job but then get laid off after 3 years are unlikely to do so.

  6. Three things:
    1. My errors are bothering me a lot. one's, not ones. Patents are not likely to be litigated decades later. I meant to say "a decade."
    2. The successful attorneys I refer to are those who started their own firms, which persist to present day.
    3. My final paragraph relies on the assumption that there is some level of dialogue between career services and those in charge of curricula. It also assumes that there are professors who would be comfortable teaching a practical section of business enterprises, evidence, or the like, and that those professors simply can’t because they can’t identify what students would find viable.
    4. I would like to point out that before the NALP imposed application restriction on first years, career services at my law school refused to do more than critique my resume. I started pestering my professors about courses for my final two years, and was able to craft a more practical course path for myself than many other students. After OCI in my third year, I’ve actually had no interaction with my career services office beyond having them ask me what firm I worked for. I don’t know how much specific interaction with professors most of my classmates had, nor how helpful career services was in helping them find jobs after OCI concluded, so some of my post is purely speculative.


  7. Thank you for this!!!
    I just became licensed and am trying to figure out what to do. Thanks to a perfect storm in my second and third year, I have no litigation experience in a private firm. As far as I can tell, convincing anyone to hire me based upon my legal research and writing experience is like trying to sell hairspray to a bunch of bald men. I didn't go to a top school. I didn't get a clerkship. I didn't land a job at a big firm that would chain me to a desk and let me churn out memos and briefs one after another. All the jobs I have seen posted that I even have a glimmer of hope in landing require everything I don't have experience in. Further, they place absolutely no value on my skills because their workload can be handled by ProDoc and a law student who they can exploit for their free Westlaw access.
    So anyway, thanks for making me feel better in not rushing out to open my own practice. I even got it from a fellow classmate who seems to think that I am a crazy person who expects to be "handed" a job. But what's wrong with wanting to be trained? To do a good job? And, why, in God's name, is it a "smart" thing to run off to the courthouse the second you get licensed and start taking appointments? How are you supposed to survive in a saturated market that is only a few feet away from a law school and who is churning out a great number of "well, at least I can hang my own shingle if nobody will hire me" because they are young and haven't yet figured out the economics of running a business.

  8. If anybody is thinking of going to law school, here is what I say:
    The older lawyers are generally a terrible source of information about your chances of making it. I don't care if they are down in the trenches and are slugging it out. Think of them as being like your law school professors who either didn't practice period or who shut down their practices 15 years ago to teach. Their world view is completely frozen in time. The older attorney set is typically NOT subject to the same issues that new attorneys are dealing with. They don't have the student loan debt. They graduated at a time where law schools were graduating much fewer attorneys. They didn't have LegalZoom to compete with. More importantly, if they decide to apply for a job somewhere else, the new crop of attorneys is no threat to them. People also go to them because they have 30 years of experience and are known in the community. If that old geezer is still kicking around, there is no need for them to cultivate new contacts with you.
    On the whole, they already have theirs.
    If you talk to any attorney under the age of 40, you're going to get a much more accurate picture of the market....and I'm not talking about those people who managed to land the biglaw job. Don't bother with the Young Lawyer Association types who spend the 3 hours of the day they have remaining after working 90 hour weeks padding their resumes with "President for the Society for Putting Things on Top of Other Things." Go to the courthouse and find everybody else slugging it out for the handful of court appointments and simply ask them how much of their business consists of paying clients. You might find one or two excited stories about how they got retained to handle somebody's divorce. However, don't get swept up in the moment: This is their lifesaver that they are clinging to in the belief that their business is truly going to take off at any second now. Come back in about 6 months and see how things are going.

  9. I started solos and saw alot of other solos. I had a really good run and than the economy collapsed. Don't let anyone tell you the economy doesn't matter for starting a solo practice.

    The middle tier are the people you are competing with and when the economy turns down they get hit and feed lower.

    I haven't seen much evidence experience mattered. I saw two people lose money at it who had practiced 2-5 years with firms. It all seems to be connections and backing. Working 15 years seems to be the key to alot of successsfull solos.

    I wrote up how I was doing it when I was doing well so I wouldn't forget it into a book and then decided to give it away on a website

  10. 10:08 - Thanks for the comment. Unfortunately, an increasing number of graduates are in your position - and with 60K people taking the LSAT, but only 30K legal jobs, more people are likely to be in your position in the future. I agree that starting a firm at your level is risky at best. It may really chafe, but you might want to work with a local attorney or small firm in a no-pay or low-pay situation until you feel you have gained enough experience to go out on your own. My best wishes go out to you in this difficult economic time.

    The Snooty Writer - Your experience with older attorneys seems to match with mine. Law students need to understand that when older attorneys tell them about the older attorney's job, that job is nothing like what yours is going to be. They have a different reality.

    AttorneyDavid - I'm sorry to hear that the economy took you under. However, I would recommend that people thinking about starting their own firm read the advice on your site!