The Dreams of a Solo

Needs vs. Wants in a Small Law Firm Setting

During the process of planning for the start of any law practice there will be a time when you are making difficult decisions regarding things like equipment, technology and software, research resources/subscriptions, furniture, marketing material, advertising expenses, office space and staff.  I consider this the Needs vs. Wants dilemma.   It is not unlike what we face in our everyday personal lives when we are deciding between things like the new iPhone or our existing Razr, a new big screen HD television or our existing picture tube style TV, or a new luxury sedan or a Camry.  The same kinds of decisions will befall a soon-to-be solo practitioner.  Do you start your practicing out of a home office or do you sign a lease for your own commercial office space?  Do you use your existing laptop or do you purchase a new MacBook Pro or an iMac?  How about that old desk and chair in your extra room or collecting dust in your basement? 

The decisions your make will go along way towards determining the size of the hole you find yourself standing in when you finally open the doors of your new law practice.  If you can arm yourself with only one attribute when you start your business I suggest that this attribute be savvy financial decision making.  Trust me you will be happy you waited until you could cash flow the upgrade purchases as opposed to strapping yourself in debt.

I hope to construct a more thorough list of the needs versus wants for a solo or small law firm start-up in another post in the near future.  What I can say now is that the needs list is similar to what I have mentioned a number of times before including a law license, a computer, a printer, a desk or work areas, and a clue.  The wants are some combination of everything else that you have seen or heard about in an office setting.  The bottom line is that you will have to pick and choose your spots to spend more and to also spend less.  My opinion is that the technology area is not the place to be cheap, but it also an area that can get away from you quickly if you are not careful.  I also came to find out that a solid, workhorse multifunction machine can be lifesaver.  More importantly an efficient multifunction machine is a cost saver when you calculate ink or toner costs with the initial cost over the long-term.  Office space is a whole other animal and quite frankly there are hundreds of post discussing that decision in much more detail.  All I would add is to once again reinforce the importance of being financially smart and realistic when deciding between a home office, an office share, or your own commercial office space.  I can make arguments for all three approaches.  It really depends on your practice and your target clientele. 

Again this is just a start to the discussion of Needs vs. Wants.  I will make it a point to revisit this topic over the next few months with more attention paid to each particular area.  You never know it might help move you off the fence on a couple of those decisions holding up the completion of your business plan.   

Goals for The Dreams of Solo in 2008

Here it is the ides of January and I am just getting around to posting my goals for the Dreams of a Solo for 2008.  That can't be a good thing to give away 15 days before making strides towards goals for the new year.  Well unless you have a way-back machine or have otherwise mastered the time-space continuum, I guess I am just going to have to start from here.  So without further ado I'm happy to present my 12 goals for 2008.  I picked 12 because my favorite Chicago Cub of all time, Shawon Dunston, once donned the number.

1. Post meaningful content 5 days a week or 5 new posts a week;
2. Retrace my steps from the beginning of 2007 until now to provide a more in-depth observation of my process to solo practice;
3. Research and write two free E-Books outlining the enlightened path to solo practice;
4. Add one additional author to the blog;
5. Have three or four of my fellow solo law bloggers author guest posts;
6. Reach 200 feed subscribers;
7. Be invited to guest post on two other blogs;
8. Get quoted in a print or web-based publication or periodical other than a blog;
9. Figure out how the Dreams of a Solo title can be applied to a practice that may soon be a partnership (I say that in jest and I hope you get that sense);
10. Deserve mention in the same paragraph as Carolyn Elefant's, My Shingle, Susan Cartier Liebel's, Build a Solo Practice, LLC, Grant Griffiths', Home Office Lawyer, Chuck Newton's, Third Wave,  The Greatest American Laywer, and Sheryl Sisk Schelin's, The Inspired Solo.
11. Fend off the blog crash and stay the course;
12. Help one attorney realize that solo practice is not only feasible, but practical once the years of law school and big law programming is rewired.

I chose one attorney for the latter because I need to believe that I can accomplish this goal.  It is one of the main reasons that I have continued this blog after I fulfilled my dream to be a solo practitioner.  If I can reach one solo dreamer than I can reach 10.  If I can reach 10 then I can reach 100.  You get the idea.  I have to start at the base at grow from there.  I hope you join us on the ride.  Your participation and feedback is a valuable part of this process.  As always, thanks for reading.  If you haven't subscribed already please help me accomplish my 6th goal by subscribing to this blog's feed on the upper right hand side of your screen.

Home Office or Office Home

I either have a crazy idea or it is something that just might have some teeth to it.  As I have mentioned in the last couple of days, I have a good friend who will be joining my law practice in the next two months.  That creates a number of new concerns that I need to plan for and address before he makes the move to Appleton.  The foremost concern is ramping up business development even more to provide immediate work for two attorneys.  That will prove to be a decent challenge that I will not take lightly.  The second concern is that I do not have enough space to accommodate another attorney.  Then out of the blue I found a solution that will allow my creative mind to flourish or at least to dwell for the foreseeable future.  I hear and often read about the benefits of the Third Wave of home office approach.  I have been sold for about a year and still I am too timid to take the plunge. 

So what is the solution that I discovered tonight?  It is rather simple actually.  What if you change the home office into the office home?  I'm not saying that I will live in my office, at least not if I seriously want to put an abrupt end to my marriage at the same time.  I'm saying what if I found a great commercial property that had apartments above it?  I'm not a big fan of snow removal, lawn/gardening/landscaping duties, or the need for a yard in general.  We don't have kids right now, although they may be joining our little family in the next couple of years.  Even then people raise children in condos or apartments every day so that isn't a barrier.  I know that people have done this and I have to assume that it is feasible.  I also can identify a few reasons, both tax related and personal, that a person would not want to do this.

It is an infant thought right now, but it is one that I fully intend on developing.  You can be assured that you will be the second to know how the plans are coming.  I only say second because I should probably talk it over with my banker before I do anything.  Wait, I feel like I might be leaving someone out of the loop.  I guess my wife should probably know about it as well.  That is probably not nearly as funny in print as it is in my head, but I'm going with it anyway.  If you know anything about me or if you have read any number of posts on this blog you know that my wife drives the car and I'm sitting in the booster seat in the back just enjoying the ride. 

Link: Blawg Review #142

Link:  Susan Cartier Liebel has posted Blawg Review #142 on her Build a Solo Practice, LLC blog.   Susan has written this installment of the Blawg Review as a letter to a new lawyer.  The text of the letter is insightful and useful, but that is not the thing that impresses me the most.  As you will see, Susan has linked to many popular and some recently discovered blog's by incorporating the titles of the blogs into the text of her post.  For example, Susan linked to The Dreams of a Solo blog in the following manner:

You may have the Dreams of a Solo and hope to one day say to your child, 'that's My Shingle.' You  realize you will need a Startup Toolbox and have learned you will have to be your own Chief Happiness Officer. Quite often that is when you will face the most resistance from others, and the secret envy of many.

That is just masterful.  Readers have to click through to find out what the blog post and blog is about.  If you haven't already done so, please stop by Build a Solo Practice, LLC and take some time to look at the posts that Susan has mentioned.

NFL Playoffs: A View From Packer Country

From a football fans perspective this is the best time of year.  The NFL Playoffs are in full gear with the Divisional round almost in the books.  This blog is not a sports or football blog, but I am a sports and football fan.  So when I develop things to write about I tend to resort to things towards the front of my mind.  On top of all of that I live in Appleton, Wisconsin, which is only 30 miles from Green Bay for those of you wondering about Wisconsin geography.  Needless to say this is Packer Country.  In fact, the entire state of Wisconsin is Packer Country, but we are up to our eyes in Packer mania 24/7 for 365 days a year.  If I sound negative at all please forgive me.  The truth is I am not a Wisconsin native, nor am I a natural Packer fan.  However, I have come to appreciate and even cheer for the local teams.  That last statement is kind of funny actually since I consider the local teams to be the Green Bay Packers, the Milwaukee Brewers, the Marquette Golden Eagles (basketball) and the Wisconsin Badgers (football).  None of those teams are technically "local" since the closest is the Packers and, as mentioned above, they are 30 miles away.  Yet we cheer and we act like we personally know the players such as Brett Favre.  That is the main thing that separates the Packers with my previous experience as a Minnesota Vikings fan growing up in North Dakota.  There is a personal investment by Packer fans in the outcome of the game.  If it would be proper to call the Packer nation the best fans in football, then it would be equally proper to call the Vikings nation the worst fans in football.  Talk about your quintessential fair weather fan base.   (note: this is the second time in a day that I have used the term quintessential, which coincidentally exhausts my supply of said term for the first 6 months of 2008).

The point is that the Packer's playoff push is great entertainment all across the country since the Packers have a somewhat national fan base, but it is infinitively more important here in Wisconsin.  Packer's news is the lead story on the local 10 o'clock news.  Bret Favre is the Governor even though Jim Doyle allegedly occupies that position.  The radio voice of the Packer's, Wayne Larrivee, is also the voice of reason in many households across the state.  After yesteday's dominating performance against the Seattle Seahawks it is near impossible to not feel the electricity in the air.  Are the Packer's going to make it to or win the Superbowl?  We'll see.  All I know is that the Wisconsin economy will inevitably see an up-tick in numbers the longer the Packers survive in the playoffs.  Happy people work harder and spend more money.  They also like to congregate at the local watering hole to watch "their" team make a championship run.  Go Pack Go.

Legal Education in the U.S.

Chuck Newton previously shared this link in his post "Law School Musical" and with most things Chuck shares I agree it is well worth you time.  The You Tube video is probably a fair representation of how all of us felt once upon a time during our legal educational pursuits.  I have had reason to reflect on my experiences in law school over the past few years and this video gave me yet another reason to think about law school in general.  First things first, I enjoyed an overwhelming majority of law school.  I found it to be an enjoyable experience in my life where I learned a great deal and I made a number of great friends.  We filled our free time with fun and forgettable experiences.  Yet, one doesn’t readily think about how the law school education system changes them unless they gain some distance from the profession or have other good reason to withdraw from the lawyer mind games.  If you think that you are the same person as when you went in as a 1L I would have to disagree with you.  I neither think, write, nor talk like a non-lawyer anymore.  In fact, it frustrates countless people that I have known my entire life because analytics and logic must prevail for me to be satisfied.  I have not observed such a shift in other professions, even those involving advanced degrees such as science or medicine.  Medical doctors work a bunch of hours and they are in a very high stress position virtually every minute of every day.  However, I would say that their whole basis for logic and reasoning is not capsized during their educational or professional pursuits.  A doctor’s mission is to save lives.  To do that they have to know, understand and implement a number of theories, proofs, treatments, diagnosis, etc.  Are there occasions when the facts do not fit the protocol?  Absolutely.  But what if the methodology and protocol was based on years upon years of both statutory, administrative, and case law.  On top of that the law was based on logic, reasoning, analytics, customs, and socially accepted norms and mores.  We pride ourselves in our ability to take situations and boil them down to if A is true and B is true then C must me true.  We are wrapped into a tightly woven fabric of society and government that will never be obsolete.  Laws are not often black and white.  There will always be room for interpretation and debate.  Out very existence is promulgated on that idea.  Without uncertainty and disagreement in the rule of law, then lawyers would have no business being in business. 

This rant does not obscure the reality that is the law school experience in the U.S. legal education system.  I restrict my comments to that endeavor because I admittedly have no experience with the legal education system outside of the U.S.  What I do know is that I am a different person both emotionally and psychologically than I was before I enrolled in law school.   I wish I could pinpoint when exactly it was that the change occurred but unfortunately I cannot.  I had to be sometime in my first year of law school when I realized that academics where no laughing matter anymore.  To some degree I wish I had acknowledged this fact earlier in my academic career, but I would not change the hand that I was dealt so it is irrelevant.  I remember calling my dad, who is a lawyer and who graduated law school in the early 70’s, during my first year of law school.  One conversation that will always stick in my mind was in regards to my 1L legal writing and research class.  I was having a difficult time acclimating myself to the IRAC or CRAC legal writing style.  I felt it drained my creativity and forced me into a uniform writing style that limited my ability to effectively communicate my position.  At the time my dad’s response didn’t shock me as much as it does now, but he said simply, “That is just how attorneys write and that is what the judges expect.” 

I am not sure if everyone will agree with that, but I have to believe that the argument has some merit.  Otherwise, my legal education loses some value if the things they taught me are useless.  My point is that we all eventually accepted logic similar to that of my dad.  The problem is the logic is circular to some degree and it accepts as fact something that is not supported without asking why.  I am a Generation Xer.  I don’t like doing things a certain way just because that is how they have always been done.  If the "old school" process makes sense from an efficiency standpoint then I am more than happy to use it.  But what if it doesn't make sense?  Here I am in a profession that rarely pushes the envelope and is built on the concept of stare decisis and precedent, which by it very meaning purports that we will stand by previous decisions.  We live in the past and we reason through the present using the logic and reasoning outlined in precedent.  Is it any wonder why we are a relatively slow moving and non-innovational profession?  Change will happen.  I'd like to think that we can speed up the curve though to take the practice of law into the 21st century as quickly as possible.

What does it take to be Rich?

Author's Note:  I have revised this post after realizing that I misinterpreted the data.  The statistics are mainly what I incorrectly summarized in the initial post.  It turns out the 45% of the people surveyed thought that $5 million or more meant rich, not the 78% that I initially stated.  My apologies.  That doesn't change my rant at the end though so I have left that intact.

This sort of topic always gives me rise.  It came up as I checked my feeds in Google Reader this evening and I noticed Robert Frank's post on The Wealth Report at the Wall Street Journal site titled "A Rich Person's Definition of Rich."  Forty-five percent (45%) of the "rich folk" (affluent households with greater thatn $500k in assets) said it takes $5 million to be rich.  Of those folks, twenty-five percent (25%) said that it takes $25 million to be rich.  Still yet, eight percent (8%) said it takes $100 million.  Seriously, did the Spectrem Group interview The Real Housewives of Orange County.  Forty-five percent (45%) of those interviewed said it takes more than $5 million to be rich.  I am not that old, but I still remember when a gallon of gas was under a dollar.  I must have missed the shifting paradigm of the rich.  Maybe I just view things differently than those interviewed or than the world in general.  I may never know unless I graduate to that level of the "rich" at some point in my life.  The truth is I believe it is the latter in that I just view riches differently.  That is the beauty of a subjective term such as rich.  From a monetary or asset perspective in does take a good bit of money to reach the stature of rich.  I have met rich people.  For goodness sake I represent a fair amount of rich people, some with far more and some with far less than $5 million, and I have never compared asset levels set subjective standards to determine if they are rich or not. 

Our world has evolved into the quintessential hedonistic society.  So much so that we would not think twice about using currency for toilet paper if we thought it would impress our dinner guests.  Wait, my apologies we would have to let Pottery Barn first assemble the currency on neat little rolls, stamp their logo on it, and charge us two dollars for every one before we would accept it.  That is capitalism after all.  It is time like this when I think back to a book I read in a seminar course in law school called the Monk and the Riddle by Randy Komisar.  Mr. Komisar talked about, among many other things, his concept of the American work and retirement philosophy.  I am not sure if he coined the phrase, "The Deferred Life Plan", but he used it in his book.  We work and work and work with the promise of wealth accumulation and a glorified retirement as our dangling carrot.  Many never reach the point when you can cash in the deferred life plan.  That saddens me a great deal.

I imagine that some people will interpret this post as being political in nature given the division between Democrats and Republicans on issues of taxes, especially wealth transfer taxes.  I'd like to think that I can rise above the politics to get to my intended point regarding the idea of wealth and the definition of rich.  More than anything else I am publicly venting about the mentality that so many of us here in the U.S. take when it comes to developing our work-life-retirement paradigm.  Personally, I cannot stomach deferring the more enjoyable aspects of life to a fictitious and non-guaranteed future time period commonly referred to as "retirement."  I've railed on this mindset a number of time before.  Would you take actually monetary riches ($5 million or more) for the time lost with your family, watching your kids grow up, and the memories of a life lived not worked to death?  My financial planning friends are not going to like this idea as much as I do, but the reality is I'd rather spend less time working and more of my money on trips or other educational and memory creating activities than on planning for some time in my 60s.  This isn't to say that I advise being cavalier regarding one's retirement planning.  I just think that saving an amount equal to the GDP of a small developing country is a bit much.      

Sometimes too Much Information is Just too Much

The process of planning the start of a business or the implementation of that business plan is full of information, research, and analysis.  There comes a point when the endless supply of information may make your head feel like it is going to explode.  Okay, so I can only speak to my reaction to the overabundance of information, but I have to assume that I am not alone.  It is very good business to research, analyze and develop a flexible business plan.  The secret is to take the best laid plans from paper to reality.  Sometimes the best way to do that is to stick you fingers in our ears like my Smurf friend above.  That might be the jump start we all need to put a stop to information overload and get back to why we started planning in the first place.  In case the excessive information caused you to forget why you started planning, I will give you a little hint:  You wanted to start and build your own business.  So stop revising your plan and start implementing it.

Decision 2008: Add Staff, Associate or Partner

I am guessing that some people may be reading this post thinking that I am talking about the Elections coming up in November.  For those of you looking for a political post I am terribly sorry to disappoint you.  This point will instead focus on the most important decision that I have made for my law practice, whether to add staff, an associate or a partner.  To date I have operated as a true solo, but I have been helped by my office sharing mate's assistants from time to time.  I remember reading a blog post about this within the last couple of months, but for the life of me I cannot locate that article at this time.  If I find it again I will edit this post and provide the link.

The timing of this post may be a tad bit premature since the entirety of the new relationship has not been determined.  I have been in talks with a law school classmate who is 95% sure he wants to move back to Wisconsin.  We have talked for the last four years about the possibility of starting a law firm together, but until this time those talks were never really serious, at least from a practical perspective.  Now it is looking like it could be a done deal if things continue to stay strong around here.  It is too early to pinpoint an exact date, but my guess is that he will join the firm in the next six months.  I have blogged over the past three or four months about a growing desire to bring on a part-time assistant to help around the office.  To date I have not hired anyone and with this development I will likely wait another six months before I move on that issue.  The benefit to the arrangement with my friend is that he will technically be an associate from the outset, but I am not committing any guaranteed income to him.  He will operate as a quasi-partner as far as the compensation structure goes.  Eventually we will graduate to a point where he is established in practice and we will look at "partnering" up. 

In the end this is the best case scenario from my perspective since I will get the benefit of another revenue generating attorney who will double as a highly trained assistant while he becomes acclimated to the Appleton, Wisconsin community.  It will not increase my overhead, fixed or variable expenses much at all.  He eats what he kills.  I will provide the office, the initial work, training, experience and malpractice insurance.  I still bear the risk as the owner and managing attorney.  Risk does not scare me, especially when it is associated with an educated and well-reasoned decision. 

So there you have it.  Ten days into 2008 and the pinnacle decision has already been made.  He will be a great addition to the firm and it will be great to have him and his wife back in the area.  I would not be surprised to see him lend his thoughts and insight right here on this blog in the weeks and months to come.  I will discuss my thoughts, observations and plans as we move forward as well.   

Office Space Revisited

This topic has been on my mind since the time I first decided to open my own law practice, which by my calculation was roughly 10 months ago.  I eventually decided to share office space with another solo attorney and that has turned out to be a great decision.  Even with that being said, I have hummed and hawed as to whether I could make the leap from the traditional law firm or Second Wave approach to the home office lawyer or Third Wave approach to running a law practice.  To date I have not manifested the fortitude required to fight the internal and perceived resistance to the "radical" home office concept.  I put radical in quotes to emphasis my lingering surprise that such a feasible business strategy can be met with such resistance.  But I must digress or this post will spiral into another self-motivating and self-deprecating rant on why I should move the office home and why I still cannot make the leap.

For those of us still moving along the evolutionary path we may find ourselves in brick and mortar office complexes surrounded by all of the things that the partners in the firm we left "had" to have to fully equip a law office.  While I will not go so far as to say that an actual office location is a bad business decision, because quite honestly it makes a lot of sense for many attorney, but I will say rubbish to the idea and strategy that all law firms need the same sorts of things.  As I have mentioned on a couple of occasions before a law school graduate needs only a handful of things to start and build a law practice.  That list includes a law license in the proper jurisdiction, a computer, a printer, a phone number, an internet connection, and a clue.  Why then does our profession insist on spending money on things that do not have a positive return on investment from an economic perspective?  [(Author's note: I was going to include the following two sentences here, but I am not sure it is applicable and since I am not an economist I thought you could all see if my logic and analysis makes sense) For some reason the laws of diminishing returns is bouncing around my head.  The truth is that it is a stretch for me to pretend to be an economist so let me know if I am way off base, but I see value in making the comparison regardless of the economic principle that the scenario best characterizes.  The basic premise to the law of diminishing returns is that as level of input (expenses) increases the level of output (revenue) increases in lesser and lesser amounts.] 

Let's compare my bare bones law firm start-up and the traditional law firm to test this theory.  The bare bones law firm has extremely low fixed and variable expenses.  In fact, many of the items listed can be used in the business free of cost if the attorney already has a working computer and printer.  The law license will cost money each year, as will the internet connection and a phone number.  However, if the firm is based out of the attorney's home, then those will not be costs outside the personal budget.  The clue component is as variable as they come.  Some attorneys understand the business and substantive side of the practice of law, while other attorneys need to work on either or both sides. 

For this example I am going to assume our attorney is a recent graduate with a sound business mind and a sponge-like aptitude for learning but he or she is admittedly green from a practical perspective.  All told let's say our new law firm has less than $1,000 dollars in start-up costs and less than $250 a month in overhead.  Our friend downtown has decided to follow the path of our forefathers by setting up a modest brick and mortar law office.   He leased space, purchased a new computer, internet legal research subscriptions, yellow pages advertisements, office equipment, a stand alone printer, fax machine and stationary.  His total start-up costs are roughly $10,000 and his overhead is $1,750.  From day one traditional attorney must generate a lot more business than our home office lawyer.  I threw together the chart below to illustrate some of the things I am talking about in this comparison.  For purposes of the chart below I assumed the expenses as stated above and I inputed revenue as follows:  For Bare Bones I started with $1,000 in revenue set to increase by 10% each month.  For Traditional I started with $2,000 in revenue set to increase by 10% each month.  At the end of the year Bare Bones had a cumulative profit of roughly $17,400 and Traditional had a cumulative profit of roughly $11,300.  This simple analysis does not take into account the opportunity cost of using funds to start the business instead of investing elsewhere or interest expense associated with borrowing the start-up funds.  Traditional did not generate  a cumulative profit until August (the 8th month), while Bare Bones generated a cumulative profit in the February (the 2nd month). 

Just for fun I ran the projections out another 6 months and I noticed that Traditional's cumulative profit finally surpassed Bare Bones in March of the second year or the 15th month of operation.  This analysis is not to be confused with full-fledged market or economic studies.  I put it together at various points throughout the day. 

I have to admit that I am amazed at what the statistics show at the end of the day.  I built the model with very conservative revenue estimates for the Bare Bones law firm relative to the Traditional law firm model and still it took 15 months for Traditional to catch up.  It is proof enough to me that the size of the hole you dig when starting your firm and the decorations your put around it make all the difference in the world when it comes to your firm's short, mid and long term financial health.  Let me know what you think.  Good, bad and ugly.  Either way it should help get the ball rolling on the topic of Home Office Space.