The Dreams of a Solo

True Solo No More...Almost Anyway

At the time of this post my firm will be just over two weeks from adding another attorney, which will move me from the true solo category to the small firm category.  While that may be technically true I still find that many of the principles of solo practice are applicable to the two attorney firm.  In the end the business of law does not change all that much except for the additional oversight and things like payroll.  But the structure of my soon-to-be two attorney firm will be more like a combination of two solos than it will be a traditional law firm set-up.  However, we will fall under one firm umbrella and I will initially shoulder much of the responsibility.  I have chosen to do this for a couple of reasons, which I mentioned in a previous post titled Decision 2008:  Add Staff, Associate or Partner.  One reason I did not mention specifically was that I am looking forward to having a good friend and a good lawyer join my firm to provide stability and room for growth to the practice.  By stability I mean the ability to take on additional work and to ensure that someone is able to cover if something should happen to me.  By growth I am referring to the expansion of my firm's practice areas to include intellectual property and more business and commercial law services.  I am a niche practitioner since I really only handle matters related to estate planning, tax, probate, trust administration and elder law.  My colleague allows me to offer additional services without having to be a jack of all trades.

The start date is all but written in stone as I write this post.  Right around the middle of March the quick transition from solo to two attorneys will happen seemingly in the middle of the night.  It is kind of similar to the way Robert Irsay moved the Baltimore Colts to Indianapolis between 2:00 AM and 3:00AM in 1984, but without the negative connotation.   Let's hope we don't have to wait  23 years to win our Super Bowl.

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.   

Start implementing your plan for 2008

At the time of this blog post we have exactly 11 days left in 2007.  Most of us have spent the last couple months if not the last year laying out our plan for 2008.  Just as plans do not completely take shape over night, they are also not implemented automatically when the clock strikes midnight on January 1st.  That is probably a good thing since we would be caught a bit off guard in the middle of signing Auld Lang Syne and drinking champagne (or sparkling grape juice).  The fact remains that the best laid plans will be relegated to recycled paper if we do not implement our ideas.  While the plan may specifically pertain to things that happen in 2008, my advice would be not to wait that long to get started.

I always hear people say things like, "I'd like to hit the ground running" or "I'd like to get the ball rolling" in terms of business dealings, starting a law practice or business, changing jobs, and implementing plans.  It is natural to have the strong desire to eliminate the lag time between planning and implementation.  I know that I had that mindset myself earlier this year as I moved towards my July 1st launch date.  It would have been somewhat demoralizing to open the doors of my law firm and not to have any legal work to do.  Most plans are abandoned because of the demoralizing effect even a very short lag time between implementation and the desired results.  All I can say in that regard is that most if not all plans take hard-work and determination to see them through.  Just as the failure to plan is planning to fail, failure to work hard is like giving up. 

My biggest challenge in life is taking things from the idea stage to implementation.  Sometimes that is a good thing because I am an idea guy or to put it another way I am high in ideaphoria as discussed by Stephanie West Allen on idealawg in the post, "This is your lawyer brain on blogs."  If I implemented the majority of my ideas I would not have the time or energy to see any of them through to conclusion.  So we pick and chose our spots.  That is the point of this post.  To get all of us mentally ready to make 2008 our best year ever.  I have compiled my list of goals for 2008 and I have outlined the specific things that I will do to accomplish those goals.  My advice would be to limit the overall list to around 10 specific goals.  Maybe you have a revenue, expenses and profit goal.  Maybe you want to spend more time with family.  Maybe you want to establish a more regular blogging schedule.  Once you zero in on your specific goals take it a step farther and brainstorm ways you can accomplish them.  As always I will keep you posted as to my progress and I look forward to hearing from you as well.  Merry Christmas, Happy Hanukkah, Happy Kwanzaa, or just Happy Holidays in general.  Here's to a great 2008!!      

Joining the Billable Hour Melee

In addition to the recent banter on various listservs, the topic of the Billable Hour has been fodder for a couple articles and numerous blog posts throughout the blogosphere.  To celebrate the "back to school" period I find it compelling to join the conversation (again) in a kind of dog pile activity you may find on the playgrounds of yesteryears.  I say the playgrounds of yesteryears because I'm not sure what sort of activities today's kids are doing on the playground or what activities they are even allowed to do anymore.   That is another discussion for another time, however.

As mentioned the topic for this post is the Billable Hour.  It appears to me that the classic mechanism for determining the fees for legal services is facing the most serious attack in its history.  The billable hour's history can be traced back to 1914 when a recent Harvard law school graduate by the name of Reginald Heber Smith joined with Harvard Business School to develop a system to track and manage finances related to the practice of law.  The result of this joint venture was the development of what would become today's billable hour method, which is best illustrated in the simple equation, time spent X hourly rate = legal fees.  No one can dispute the simplicity of this model, especially from a mathematical perspective.  In fact, most if not all practicing attorneys can do this math very easily in their heads.  The downside of the billable hour is not as straightforward.  It requires more thought, albeit not that much.  The system is inherently efficient for the attorney since it quantifies revenue and allows the law firm to more accurately prepare a budget.  From the client's perspective the billable hour system does not appear to be as efficient.    To a large degree it promotes the exact opposite, inefficiency, since the lawyer gets paid more if he or she takes longer to do something.

I would be remiss to jump on the anti-billable hour campaign by only stating the obvious facts and observations as noted above.  I say that because it is one thing to criticize when a viable alternative is available and quite another to criticize just because something isn't perfect.  I am not convinced that this situation falls in the former, since I haven't heard a convincing argument for a solution that would disband the billable hour in all types of cases.  The most glaring example is in the area of litigation, but I would expand that to include cases or matters that depend on either the court or other third-parties.  It is difficult if not impossible to estimate legal fees in cases such as those.  However, the flaw with my defense of the billable hour is that I have not allowed myself to fully escape the hours times rate mindset.  I am still expecting legal fees to loosely reflect that simple equation.  Otherwise I wouldn't say things like "it is difficult if not impossible to estimate legal fees," since the estimation idea is linked to what one would expect to receive had the billable hour been used.  Any alternative to the billable hour is going to have to sever all ties with the hours times rate equation.  One such alternative can be found in areas of practice such as estate planning.  Most practitioners in this area bill on either a flat-fee or value-bases billing approach.  Sometimes this flat-fee approach is very much linked to the billable hour.  For instance, let's just say that a typical husband and wife estate plan would consist of an hour initial meeting, a couple hours of document drafting, an hour for a signing meeting and an hour for follow-up.  Also assume an hourly rate of $50 (hourly rate number used in this example is not in any way representative of a typical hourly rate used by any practicing attorney in any part of the country.  I picked it out of thin air for illustration purposes only).  This traditional estate plan may then carry a flat-fee of $250.  As this example illustrates this method is straightforward and workable.

But is that really an alternative to the billable hour?  All I see in this approach is the elimination of daily time records and the passage of the risk baton from the client to the attorney, since inefficiency is no longer rewarding.  I'm not complaining about either result to be honest.  I was never a fan of the daily time record and I think that some of the risk should lie with the lawyer.

Admittedly, I need to spend more time researching the various non-traditional or alternative billing methods.  I think there is room for improvement in this area and I am certainly looking forward to developing an approach that is acceptable to both the attorney and the client.  I'm not sure that a reasonable comparison exists in today's marketplace but that will be where I start my research.  How do hospitals, dentists, therapists, developers, or businesses in general, service or product-based, set their prices?  Do the economic principles of supply and demand control?  Can and do law firms bill based on the value delivered and at a rate up to what the market will bear?  If the same work has a value of X to Client #1 for a fee of Y and 3X to Client #2 is a fee of 3Y for Client #2 justified?  I will get back to you with my answers to these and more questions in the coming weeks.  That is, of course, assuming that I can find the answers out there somewhere.   

Coming Back From Vacation

My recent silence on this blog has been by design because my wife and I took our traditional, early August vacation last week.  The idea of taking an actual vacation was a foreign concept to me until I met my wife five years ago.  While I was growing up my family really did not take family vacations.  I am not really sure why, all I know is that we didn't.  Now each year in the end of July or early August my wife's family spends two weeks on the Michigan side of Lake Michigan at a Lutheran bible camp in Arcadia, Michigan.  I'm not sure if I could have possibly used Michigan any more in that last sentence, but it was worth a shot.

The details of the trip are unimportant for the purposes of this blog post, but I did want to share my thoughts and feelings regarding leaving my law firm for 4 business days after being open for only 6 weeks.  The truth is I felt the two conflicting emotions that one would expect of a small business owner about to embark on a first vacation.  I was excited to get the chance to relax and hang out with family.  I was also feeling a bit of stress knowing that my time spent away would mean I would not be making any money.  I am extremely happy to say that the excitement of getting away ending up carrying the day, which made the vacation an absolutely perfect time.  In my mind I analogize these conflicting emotions to the feelings I used to get while playing competitive golf.  By that I mean when I would stand over a five foot putt for birdie or to win the whole in match play I would have two different thoughts randomly bouncing around in my head.  First, if I make it I win the match or I go one under par.  Second, if I miss it I'll extend the match or stay at even par.  Both of the latter results are negative thoughts in case that isn't clear on its face.  I am not saying that it is completely counterproductive to be aware of the negative elements of any action.  What I am saying is that it IS a lot more difficult to realize and attain the positive results if you focus too much on the bad.  As a wise and long-time golf partner used to say, "Its hard to make a putt or hit a golf shot with both hands around your neck."  I couldn't agree more.

So now I am back after a short, yet perfect vacation and I am picking up right where I was before I left.  My experiences lead me to believe that the flexibility of schedule that many seek in going solo is in fact a very real possibility.  I was upfront with my clients, office mates and contacts in regards to my vacation and as a result all the feedback has been great.  More than anything else I have learned again and again that communication is key.  I didn't have a partner looking at my billable time for the last week wondering how I would make up for that lost time.  I didn't have clients calling with numerous fires to put out.  I just left, enjoyed myself, and now I am back.  As the sign in my kitchen says, "Life is simple, it's just not easy."  My  advise take a vacation and leave the office behind for a few days.  It will still be there when you get back.

Solo Law Firm: Early Stage Difficulities

It has officially been a month since my law firm has been in business and things have gone very well to this point.  But as they say, "Not everything came up roses."  So I thought that I would share some of the difficulties and issues that I have experienced in my first month of solo law practice.  Most of these items were expected considering the fact that I made the transition with no ongoing matters and no official clients.

The first difficulty relates to cash flow and this is relevant for all fresh-of-the-box start up businesses.   There is a lag between being retained and getting paid.  That is just a fact of life.  This is especially the case in my estate planning practice where I am paid upon completion and execution of the documents.  This is not to say that I do not require a retainer.  It just means that I do not draw down the retainer or otherwise cash the check until the plan is completed.  The estate planning process typically takes a couple weeks to a month depending on everyone's schedules.  With that in mind, the clients that have retained me so far are not likely to provide positive cash flow until this month.  As I said before, this slight lag was expected and it will not be a lasting issue.  It is just worth mentioning and considering when completing a business plan.

The second difficulty relates to the administrative tasks around the office.  By design, I am pretty much a one man shop.  I do have a shared receptionist and a share paralegal for the witnessing of documents and what not.  But the day to day functions of my law firm, including copying, scanning, mailing, scheduling, etc. fall on my shoulders.  Again, this was expected and thankfully I enjoy doing all of that stuff.  It is mentioned as a difficulty because it is something a bit different than the way I practiced before and it takes a little getting used to.

The third and last difficulty I wanted to mention is finding time to update this blog.  With the launch of my firm I started a website/blog for my law firm and a estate planning/tax/elder law related blog.  On top of that I have managed to attract a number of clients through referrals in addition to the clients that followed me.  So here I sit with a decent sized client/case load, three blogs, two golf leagues and the best weather of the Summer so far, and I have to find the time to squeeze it all together.  No problem.  Time management is the name of the game.  If you look at it all together it can be too much, but if you take it all in stride it is definitely doable.

As each day passes I am happier and happier about my decision to go solo.  I will gladly take these few difficulties I mentioned above in exchange for the many positives I have experienced on a daily basis.  I am already getting to the point where I ask myself why it took me so long to see the light.   Either way I am very glad that I did and that I took the leap into solo practice.

Link: ABA Journal, The Billable Hour Must Die

I just read Scott Turow's article, The Billable Hour Must Die, from the August issue of the ABA Journal and I wanted to mention it quickly.  I have talked about the billable hour from time to time on this blog.  In those discussions I have mentioned many of the "problems" that Mr. Turow talks about in his article.  I agree that the  hours times rate approach can be less than client-friendly.  It promotes, to some degree, inefficiency and repetition.  Mr. Turow's article explores these issues in much more detail.  I found his perspective and observations very interesting as I continue developing a better approach to the practice of law.  In my estate planning and business organizations practice I can typically quote a flat fee for the recommended services.  This approach is the norm in those areas of practice.  I find that it aligns the client's goals with the financial aspect of the representation.  In any event, Mr. Turow's article is a great look at the billable hour from another attorney's perspective.      

Announcing the Opening of Your New Law Firm

This post is one of those that I previously referenced when I thought of comparing and contrasting how things actually went with how I thought they would go.  In the months leading up to the launch of my law firm I laid out what amounted to 20 or so action items that I hoped to accomplish to get the firm started on solid ground.  One such action item was the development and transmission of professional announcements to share the great news with contacts, colleagues and the general public that my law firm was open for business.  I had seen numerous examples of this approach over the years.  These examples included a wedding type approach with a small 5x7 postcard, an announcement on letterhead, or a press release.  Throughout this process I have been very conscious of my overhead and above all else I wanted to keep "extra" expenses in check.  But I was not willing to forgo a professional look and feel to save a few bucks.

This mindset and plan lead me to develop an approach using my firm letterhead.  This meant that I would need to include worthwhile information and what I call a "call to action" in the letter.  The last thing that I wanted was for the recipients to receive the letter, give it a once over, and then discard it.  I have to admit that I had done that very thing with a number of announcements over the years.  To combat that I limited my introduction and self-promotion, but I provided meaningful links to my website and practice blog.  I intentionally tried to pique the recipients interest in additional information and I provided the means for them to satisfy this need through the website and blog.  At the end of the announcement was my second and more pronounced call to action.  I invited them to coffee, lunch, breakfast or to an office visit, on me.  I understand that this was an expensive proposition considering my announcement went out to 60 people, but the potential return easily offset this.  Within a week of sending off the announcements I received a response from 20 recipients.  After two weeks I had heard from another 10.  That is a fifty person response rate.  Now I am not a marketing guru, but I have to believe that this is a very solid percentage.  All told the announcement strategy cost me $25 in postage, roughly $15 in paper and envelopes, $100 in lunches (so far), and 4 total hours of time, which is only mentioned for opportunity cost reasons since I did not have any billable matters pending when I implemented the plan so I did not directly lose revenue.  Let's just say it cost me $150 to $200.  When all of the lunches are done I will have spent round $250, since not everyone takes me up on the offer, we meet for coffee, or they actually offer to buy lunch.  I do not know of any other approach that could have provided more immediate and meaningful results for less money.  To support that I must disclose that I can attribute three clients already to the announcement.  Thus, the strategy already paid for itself and then some within two weeks from beginning to end.

My experience in this area and in many areas of starting my own law firm has lead me to the conclusion that a new solo can find his or her own way of doing things.  What works for me might not work for you.  Likewise, what works for others may not fit my approach or personality.  For example, I love meeting people and getting to know them and their business.  I also love to develop ideas and approaches that differentiate me from other attorneys.  I was not always this way though and I can trace that back to my experiences in law school where I let the old law firm and law school establishment take my individuality from me.  My advice would be strive to be you, a person first, and then an attorney second.  This will allow you to put your own mark on your practice and in the legal arena in which you practice.  They say people want to work with someone that they like.  Let them get to know you.  If they don't like you, so what.  Just go out and find someone who does.

New Solo Practice Forms on My Shingle

Link:  My Shingle:  SOLO-formania.  Carolyn Elefant has recently posted another installment in the long line of valuable solo resources on her site, My Shingle.  I am not even sure where to start, but I do know that I look forward to spending a few hours from now through the end of the week working through Carolyn's newest form directory.

I am especially interested in the engagement letter and fee agreement sections along with the opening and closing files forms.  The engagement letter and fee agreement material is timely in my state since new rules are set to begin on July 1st that requires a communication with the client regarding scope of representation and fees.  Historically I have been very good at requiring an engagement letter, which lays out all of the required information, before work is commenced.  Many attorneys have not put such procedures in place, but they will now be required to do so.

Even if some of these things are not required in other jurisdictions it is still worthwhile to take a long look at Carolyn's list of Solo related forms.