The Dreams of a Solo

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. 

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.

Chuck Newton: Move Your TV to Another Room? Move Yourself

Link:  Chuck Newton:  Move Your TV to Another Room?  Move Yourself.  This is another great post from Third Wave Lawyer, Chuck Newton, regarding his home office.  I am not a full fledged home office lawyer but I do work at home a day or two a week.  My reason for working at home is in line with Chuck's opinion that we all desire a little change of scenery from time to time.  There are days when I work or blog from my couch, dining room table or home office.  There are other days when I work from my actual downtown Appleton office.  And there are still other times when I can be found at my favorite local coffee shop.  I tend to move around because I have found that I am better able to focus on the task at hand in a fresh environment.  I imagine that the same can be said for most of you as well.  We all remember how creative and efficient we were that day we picked up and jettisoned the office with our name on the door right?  I am envious of Chuck since he has designed his firm to allow for this additional level of freedom each and every day.  We should all be so smart and follow his lead.

I Can't Seem to Shake the Office Fog

I'm not sure if anyone else out there is like me, but I have to say that over the past two weeks I have found it increasingly more difficult to work efficiently from my leased office space.  I find myself jetting off after lunch to either work from a nearby coffee shop or some my home office.  Once I do leave the office I have found that my attention level and productivity drastically increases.  My creativity and desire to research and write new blog posts also ramps up when I am in a more comfortable setting.  Now that I see these observations on the computer screen I am kind of surprised that I was surprised in the first place.  I have really never liked the traditional approach to office space.  I have never liked being required to work from a set location.  That is one of the reasons that I chose to establish my own law firm.   Being on my own allows me to design and implement a more efficient and personally tailored approach to the practice of law.

As my previous post indicates I have a tendency to pursue tangents more than the average person.  I enjoy the pursuit of information and knowledge, even if that knowledge is simply trivial.  The downside is that getting off on a tangent detracts from the time I have to spend on revenue producing matters.

To test this theory I decided to work from home today.  I found it to be quite refreshing.  Aside from the fact that my printer and scanner are at my office, which required a short office stint to take care of some printing matters, I was very productive today.  In fact it was such a satisfying experience that I plan to work out of my home at least one or two days a weeks.  Who knows, it may be a slippery slope that leads directly to the Third Wave Lawyer and Home Office Lawyer approach that I have read and talked so much about.  I'm sure that Chuck, Grant and the rest of the home office lawyers could find room at the table for another converted lawyer.

Office Space Update

The ink was barely dry on my recent post regarding office space when I received word from one of my office sharing mates that drastically changed my situation.  As I mentioned before I currently in an office sharing arrangement in an office containing three full offices, a reception area with a workstation for the receptionist, and two separate workstations for assistants.  Notice I did not mention a conference room.  We have a conference but our lease will be terminated effective the 15th of September.  Operating without a conference room is difficult for my practice because I primarily meet with my estate planning clients in that setting.  I can get by without it, but it made the space lease appealing to some degree.  The news I received yesterday eliminates that problem.  At the beginning of November the office will return to a two attorney space, with my current office serving as the shared conference room.  This is great news from my perspective.

The experience has taught me a number of lessons including how important it is to research and evaluate the office space decision.  Things worked out well in my case, but what if they hadn't?  Starting a solo law practice is hard enough without unexpected surprises.  In the early stages a solo attorney needs to focus on acquiring clients, completing work for clients, minimizing expenses, staying up-to-date on legal developments, etc.  You don't want to worry about finding a new office after only two months in business.  My advice is to take the time to really think about the office space decision before committing to anything.  By office space I mean all available options including a home office, office share or your own office space.  Start the process early enough such that you can make a decision in your own mind but don't commit to anything.   Give that a couple days to settle in, bounce it off your trusted advisors and your support network.  Compare and contrast the various options.  Make a list of advantages and disadvantages of each option.    If you will be sparing with other attorneys, make every effort to get to know those attorneys including their immediate, mid-term and long-term plans for their practice(s).  If after a week you still feel comfortable with your decision then take the next stage to secure that office space.  Once office space is secured, get back to planning for the launch of your solo law practice.

Office Space, Office Share or Home-Office Law Firm?

It comes as no shock to any of you, I'm sure, when I say that the solo process hasn't been all sunshine and roses.  One decision that I made in the planning process is functioning as the type of Paper Handcuffs that I had hoped to avoid.  By Paper Handcuffs I am referring to the limiting effect that tying up cash in different projects can have.  I imposed these limitations on myself when I decided to use personalized stationary, business cards and envelopes.  This fact hit me in directly in the face a couple of weeks ago when we (my office mates and I) that our landlord would be terminating our lease for the space serving as our conference room effective the middle of September.  Without this additional space the office arrangement is much less appealing.

In response to this recent news I have spent the last two weeks brainstorming solutions and I am satisfied with one in particular that I am going to put on the table.  This solution addresses the three main disadvantages of simply relocating my own office.  First I would continue to keep my current office address with use of a conference room when needed.  My current office would become the conference use for the office share once again.  I would continue to receive my mail, messages and faxes at that location until I can complete the transition and burn through the letterhead, envelopes and business cards.

This solution gets me closer inline with the home law office approach, also known as the Third Wave Law Firm.  For any of you not previously familiar with Chuck Newton and his Third Wave mantra I would like to direct our attention to Chuck's site.  I know from experience that you can find hours and hours of valuable information and insight on Chuck's blog, so please check it out.  I had seriously thought about this approach very early on in my planning to start my law firm.  For a number of reasons I decided against setting up a home law office, but as you can see I am rethinking that decision.  Another great perspective on the home law office comes from fellow Mac user, Grant Griffiths, over at his Home Office Lawyer blog.  Before you sign any lease for office space or print business cards and letterhead it is worth your time to review each of the blogs mentioned above, as well as the many other great law practice resource blogs including but not limited to, Susan Cartier Liebel's Build a Solo Practice, LLC, Carolyn Elefant's My Shingle, and Sheryl Sisk Schelin's The Inspired Solo.  I also hope that this blog and my real-time observations can be of help to you as you make these important decisions for your law practice.  I will report back in the coming weeks as to how I resolve these issues relating to office space.