Building a Successful Solo Practice

As an attorney, you want to make a lasting impression. You want people to remember you and your specialization. To that end, you should be able to easily and concisely answer the common and frequent questions, “where do you work?” or “what do you do?”

“I have a general practice,” or “I handle all sorts of legal cases” are unmemorable introductions. “My name is Jack Smith, and I practice in the area of employment law,” is an improvement. “I handle employment disputes for employers,” or “my practice is devoted to discrimination lawsuits for employees” are even better options. If you use the latter approach in a group setting, anyone you meet can turn to a newcomer and introduce you personally. If you want a long and successful legal career, your introduction should make an impression that lasts for decades.

The business success of a solo practice depends on two main ingredients: (1) how much revenue you generate and (2) how many new relationships you develop. The costs of a law practice are relatively fixed and usually predictable. You can project your costs on a monthly, quarterly, and yearly basis within a reasonable degree of certainty. What will move the practice forward is generating more and more revenue by getting new clients with significant and sophisticated legal matters. If you focus the business model of your practice on the generation of revenue rather than trying to save a few dollars on copy paper and toner, you will be much better off .

For newly solo lawyers, the first big retainer or first check covering a month or two of rent might come more easily than expected. Psychologically, there’s a considerable difference between a biweekly paycheck (with its assorted tax deductions) and a big personal check with zero withholdings. Remember that that first big check is just an early buck. It’s like the first dollar framed over a restaurant cash register—a promise of things to come. But you’re not there yet.

Initially, your costs will be high and your revenues low. Overhead costs will be there month in and month out, and the revenues may not. When a large set of receivables moves into the 60-day billing category, you can quickly fall behind. To help stay afloat, deposit a big check immediately and forget it. Focus on future revenues. You’ll need many more big checks to keep things rolling and the doors wide open.

If you want to feel empowered in law, write a check to your favorite charity or cause—it really makes a statement about where the money in your law practice will go. After you write the check, read through bar publications to find a meaningful pro bono volunteering opportunity. This will teach you the difference between giving of your time freely with no expectation of compensation and the practice of law with expectation of payment for services rendered. Solo lawyers often write off so much time that they mistakenly confuse that type of sacrifice with pro bono service. A business write off or charge-off is a loss; it may very well help another person, but it is not pro bono work. Knowing the difference will help you keep charge-offs or write-downs to a minimum.

Keeping yourself motivated in solo practice is a challenge in itself. The day-in-and-day-out grind can get a little boring. One way to keep up the motivation is to think of what will happen if each of your cases is resolved successfully. This is a bit easier in contingent fee cases. Once a client has set forth his or her objectives, you know what the client’s goal is in the litigation. If you resolve the case on terms that the client has established, you have some idea of what the recovery will be. If you attempt to focus intently on fulfilling that goal, it will usually come about more quickly. Both you and the client end up winners.

You’ve heard that 80 percent of revenues come from about 20 percent of clients. The older your practice, the truer the principle. However, you can still try to improve your odds. Beware of clients who begin meetings with boxes of documents. A routine legal matter should fit neatly in an accordion file; a box usually means that the case has become larger than the dispute itself and you may never be able to achieve the client’s objectives. Also beware of the lawyer-client who wants to beat you at your own game by looking for loopholes in the retainer agreement, making all kinds of demands, and drafting elaborate e-mails citing cases they’ve read on the Internet. These types of clients are drains on your time and resources and can really do harm to a small practice. Think about whether a prospective client will adversely affect your other clientele.

On a sunny and beautiful Friday morning in early July, it’s easy to put a “be right back” sign on the door and head to the lakes. And you should do it. You decided to go into business for yourself so you could actually enjoy life, and if you are at the office too much, you’ll burn out. But you should also keep track of these days. When you start ducking out every Friday and then Monday too, the “free” days will start to show up in the monthly numbers. Use your flexible schedule to take small, disciplined breaks. Now that you’re on your own, you can work out your writer’s block on your own terms. Some lawyers go to a movie or to the gym when they hit a wall and return several hours later refreshed and ready to get to work.

Lawyers are generous with their time and wisdom. If you contact a lawyer you admire, you’ll likely be surprised at how willing they are to help you and answer your questions. Ask a prominent lawyer to lunch or breakfast. Talking to this attorney about a developing area of law, trial strategies, or how she develops her clientele can move your practice into new and exciting areas. You’ll also meet other people who stop by your table to say hello to your guest. A typical bill in a nice restaurant runs about $40 or $50, but the advice offered over that one-hour meal could lead to thousands in revenues.

Protect your greatest asset—you—with health, disability, and malpractice insurance. Speaking to a group of MBA students at Columbia University, Warren Buffett said, “I’ll pay any one of you $100,000 today for 10 percent of your future earnings.” He went on to explain that the assembled group could expect to generate more than $1 million in earnings, and he’d easily recoup his investment and likely a healthy profit over time. A lawyer earning $75,000 per year who never gets a single raise can expect to earn $2.25 million over 30 years and $3 million over 40 years. And that’s assuming no increase in pay. You insure your house, your car, or a treasured possession without question, but remember that you’re the asset most worth protecting.

Recently, my office filed a legal brief in a hotly contested matter. Because I’d partnered with another law firm, we had five lawyers on our side to review our brief. When we finally filed, the brief was free of typographical errors and we’d addressed all of the legal and factual points that needed clarifying. We were proud to file such a well-written and well-researched brief. Too often, the business of law takes precedence. A lawyer once said to me, “all of this researching and writing is really starting to interfere with my practicing law.” Owning our own practices can cause us to forget how rewarding and intellectually fulfilling the practice of law can be. When you have an opportunity to do something great in the law, don’t miss it—payroll and bills will be there tomorrow.

• Open a Law Practice
• Michigan Basic Practice Handbook (see chapter 1)
• Establish an Office Sharing Arrangement