The Dreams of a Solo

Get to Know Those in the Know

There is one area of the business of law that is more important to the starting and building of a law practice than any other.  It comes as no shock to many if not all solo attorneys that I am talking about the "getting clients" portion of the business plan.  After all we can be the best technical practitioners in the world, but if no one retains us we will be nothing more than a starving artist.  I also consider it to be the most important area because all other business or practice related issues fall by the wayside if we don't have a sustainable revenue stream.  In other words, it will not matter if our firm is structured as a sole proprietorship or a professional service corporation or whether we design a office network based on Macs or PCs if we have no clients to serve.  It is readily apparent that the task of acquiring clients is an art form that is not even remotely addressed in the hallowed halls of legal education.  We are expected to learn the craft as we begin our legal careers in a sort of apprenticeship under the tutelage of our managing partner at our first place of post graduate legal employment.  That is all well and good except for one or two main issues that inhibit this process.  First, managing partners are often very busy themselves and quite possibly they are inept in regards to teaching these skills.  Second, the law firm has competing motives.  It is not always in the firm's best interest to enable its associates to be "rainmakers" or to teach associates the "tricks of the trade" since it will make it more difficult to keep the empowered associated in lock step. 

The reality is that once our name is on the door or towards the top of the letterhead it is absolutely essential that we succeed in the area of client acquisition.  I was fortunate to have a great mentor as a managing partner when I first moved to Appleton, Wisconsin.  He took every opportunity to teach me not only the substantive areas but also how to develop and nurture professional relationships, which is the lifeblood of a referral based practice.  However it is difficult and unreasonable to expect that we will see results immediately upon implementation of these pearls of wisdom.  It is often said that it is common to see law firms commit to a marketing plan when work slows down instead of committing to a more constant campaign.  The reason a more consistent and methodical approach works is because we need to stay at the front of the minds of our centers of influence.  Sporadic contact is simply burst advertising that may produce short-term results, but it will never produce a sustainable source of business.

The purpose of this particular post is to address one component of what I deem to be an effective marketing approach.  There is no denying that the more contact you have with men or women who are powerful centers of influence, the better chance that you parlay those contacts into additional business.  I refer to these folks as the people in the know.  For me the highly sought after contacts are successful financial professionals, CPAs, trust officers and other attorneys.   Different areas of law breed different centers of influence.  The core principals are the same regardless of what type of law you practice.  It is unreasonable to belief that clients will simply find you once you hang out a shingle.  Our task is to find the best way to reach the client and often times that may be through a referral from another trusted advisor.

Identify the people in the know that you want to get to know and take steps to get in front of them.  The first meeting may be nothing more than an introduction or it may be a business lunch.  Whatever works for you and the desired contact.  I try not to spend much of our time in the first meeting talking about business if at all possible.  My main objective is to get to know each other and to get to know what each of us do.  If it comes across as simply a sales call I am not sure that would be very effective.  After the introduction follow-up and stay in touch.  You'll have plenty of time to talk business on an ongoing basis in the future.

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.