This piece was originally titled “Tips for Solo Survival”. But mere survival is not really a viable long-term option for most attorneys. You will tire of the struggle to make ends meet and the demands on your time without acceptable corresponding financial reward, and eventually move onto something different. The goal is to succeed professionally, financially, and personally. Here are some tips from a long-time solo trial attorney to help make that happen!
1. Market, Market, Market!
You have to commit to robust, regular, never-ending marketing – lunches, dinners, drinks, articles, professional organizations, blogs, email campaigns, social media, …, whatever works best for you! You are in a highly competitive marketplace with tons of lawyers hustling for business. If you don’t market, all the time, if you don’t compete for business, all the time, your solo practice will, at best, survive and, at worst, fail. You will not have a firm brand or in-house marketing professionals to help with client generation or partners sending you work. You’re on your own, you have to market, market, market!
2. Guard Your Professional Reputation and Image.
Your professional reputation and image go hand-in-hand with your marketing efforts. Prospective clients and referral sources will check you out before they hire you or refer you work. Your reputation and image matter. What other attorneys say about you and your work matters. How you treat opposing counsel matters. What your on-line presence says about you matters. Continually build, with everything you do, and tenaciously guard, with everything you do, your reputation. It is the lifeblood of your practice.
3. Do Excellent Work and Provide Great Personal Service.
This seems obvious, but to succeed, solos simply have to work harder, perform better, and provide better service, than firm attorneys. With many clients and referral sources, there is an inherent perception that solos cannot compete with larger firms. That’s really BS. But, you have to work hard to overcome, or more precisely, not validate, that perception. Start with promptly returning calls – do that and you are way ahead of a good chunk of your competitors!
4. Case Selection is Key – Take Good Cases, Don’t Take Bad Ones.
You must be disciplined in your case selection. More precisely, you must have the discipline to say “No” to a marginal case even when you are not that busy. Slow-pay or no-pay work, or poorly vetted contingency matters, will kill a solo practice. Cash flow dies, and better work is squeezed out or not properly attended to. You are better off hustling for new business than spending that valuable time on lousy cases that don’t make you money.
5. Enforce Fee Agreements.
Get written fee agreements and, more importantly, enforce them. If the client is not paying in accordance with the fee agreement, get out and move on to the next client. If the client will not replenish a retainer per the agreement, get out and move on to the next client. You are running a business, you need cash flow to meet your business obligations and take money home. Make sure the clients meet their contractual fee obligations. You are their lawyer, not their legal credit line. It’s no fun, and bad business, to be at the office at 10:00 p.m. on a work night, or on a weekend, working for a client who is not meeting his fee obligations. There is plenty of worthy pro bono work you can do, by choice! Don’t let your supposed-to-be-good-paying clients become pro bono ones.
6. Set Market Rates and Hold to Them.
Your attorney time is valuable. It has a market value based on your experience, reputation, and expertise. Investigate the market, ask other lawyers, determine what your rate should be for what clients, and then stick to that rate. Discounting your rates to get new clients is bad business. It is a race to the bottom. There is always an attorney around the corner who will work cheaper than you. Discounting your rates at the outset undermines your value to your practice, and the perception of your value to your client. If you want to give some money back to a good client, give a courtesy discount for work done on the bill. Don’t cut your rates.
7. Religiously Monitor Your Finances & Pinch Every Penny.
Cash flow is critical in a solo practice. Regularly monitor your collections, your billings, and your expenses to maintain cash flow. If a client is not paying when she should, call her. (Honestly, if you can’t call a client to ask for payment on a past-due invoice, you are probably not cut out for solo practice!) Get your billings out promptly – don’t sit on cashflow in the form of un-billed, un-invoiced, time. Track and promptly bill all expenses. You paid those expenses, that’s money out of your pocket. Promptly bill and get reimbursed. On the firm expense side, buy what you need to work harder, perform better, and provide better service than other attorneys. But beyond that, pinch every penny. It’s not the big, well-thought out, fully vetted, expenditures that hurt. You have likely done the cost-benefit analysis on such purchases – they will make you money. It’s the accumulated small expenditures that hurt. Get what you need – after that, pinch every penny!
8. Make Your Quarterly Tax Deposits.
Make your quarterly tax deposits. Religiously set aside the money you need to pay your taxes. Once you start slipping back on your tax set-asides/deposits, you will soon find yourself getting extensions on your returns to make the money to pay last year’s taxes. And that is a difficult cycle to get out of. It requires discipline and, sometimes, a leaner take-home than you might like but don’t get yourself into the “get an extension to make money to pay last year’s taxes” cycle. Been there, done that, it can get brutal.
9. Invest in Good Equipment & Software.
Invest in good, reliable equipment and regularly updated, established, software. These are the tools you use to efficiently produce quality work and provide good service. Yes, pinch pennies and scrutinize expenses, but don’t cheap out on the core functions of your practice.
10. Prepare for the Unexpected – Redundancy and Backups.
Expect failures – build in redundancies and regularly back up your data. Don’t let your practice become paralyzed by a hard-drive, or equipment, failure. Computers, hard-drives, and basic office machines (printers, scanners, etc.) are pretty cheap these days. Have an extra desktop, or printer, even cheap ones, ready to go in the event of a failure. And, back up your data! Any IT professional will tell you, your hard-drive, with all your data, will fail. It’s just a matter of time. Lost data, without back-up, is a disaster, even a practice-killer. Lost data, with back-up, is an annoyance.
11. Keep it Simple!
This is a pretty simple business. The law can be complicated and complex, and the legal work can be challenging. But, as a business, a law practice is quite simple. We do work, we bill for that work, we collect money in response to billings, we pay our firm expenses and taxes, and we take the rest home. The law can be difficult – the business of law is not. Keep it that way. Don’t complicate things with complex, untested, software where simpler, tested, software will do the trick. Don’t invest in complicated case management/calendaring software, where dual calendars and a regular calendar review will do the trick. Don’t maintain labor-intensive physical files when most everything either comes to you electronically or can be easily scanned and maintained electronically. Don’t mail statements when you can email them. Don’t pay bills with mailed checks when you can pay them on-line. Don’t re-invent a document every time when you can create a document template for repeated use. Don’t write your time down on a yellow pad and then enter it again into your billing program – enter it directly into the program the first time. Simplicity means efficiency. Efficiency means reduced overhead, solid hours worked and billed, better service, and happier clients. Happy clients, solid billings, and low overhead means more money in your pocket. More money in your pocket makes you happy. Keep it simple!
12. Hustle, Hustle, Hustle!
Solo practice offers many rewards. Independence. Full control of
your time and schedule. Freedom to take the cases you want. It also can be
quite lucrative. But, it is not for the faint of heart. You are on your own. If
you don’t have work, you make no money. If you don’t get your bills out, cash
flow dies. You don’t have partners making money to smooth over slow periods or
to send you work when nothing is coming in. Bad case selection and poor
business decisions can be disastrous. You must continually compete for business
in a tough marketplace and regularly do battle with well-heeled, well-staffed,
adversaries. And no matter how much you crunch the numbers, estimate billed
hours, do the “hourly rate x hours you have to work” calculation (“wow, I only
have to work X hours a day to make a X dollars”), and plan for expected
compensation, it almost always turns out different from what you expect or plan
for. And, to be succesful at it, and not just get by, you simply have to
hustle, hustle, hustle, all the time, every day, year in, year out. But, for
me, it’s the best way to practice. Why? Because its my gig – my practice to
run, my decisions to make, my adversities to face and problems to solve, my
cases to try, my clients to serve, and my money to make. And I like that.