Editor’s Note: Recently, I’ve been receiving a number of inquiries seeking advice on starting a practice. I’m going to try to address as many as I can, as quickly as I can, in what will hopefully be a regular "Questions & Advice" column. If you send me an email with a question, try to eliminate any identifying information so that I can use it in a column. I’ll get in touch with you prior to posting, but it will make my job easier if I don’t have to reformulate questions. With that, my first question topic is how to handle the naysayers, particularly when you’re a relatively new attorney.
Reader Question: I am not
happy with my current position and for three months have been working
on this idea of starting my own firm. I feel confident in
my abilities to competently
represent clients in my practice area, even
though I’ve only been practicing for just over one year (it’s a field
where I have personal experience and which I worked in during two
summer law clerkships).
My plan is to begin in a home office, use web-based case management
software, and digital phone – all of which will make it easier to move
when I (hopefully) can afford a "real" office. I am single so I
do have think about things like paying for my own health insurance,
meeting my rent, paying my student loans, and putting food on the table.
I was quite confident in my ability to do all this by the end of this
calendar year. But a colleague who started her own practice as
the same age as I am advised me against it, saying that it’s
harder than anyone can imagine to get clients and to manage your own
Now, I’m scared. Even though I do not doubt my legal abilities
and even though I know I can and am willing to work for hours each week
and I get so excited just thinking about my own practice, I’m back
tracking from the idea. I know that success can’t be guaranteed,
but now I wonder whether I should wait until I have more money saved up
or I have my own client base I can take with me to a new practice
before I go solo.
MyShingle Response: You’re right that success as a solo can’t be guaranteed, but your letter shows that notwithstanding just a year of practice, you’ve got what it takes. First, you’re confident of your abilities which is a prerequisite to starting a firm. When you start out, you simply don’t have time, as you do when working for others, to obsess endlessly over whether you’re capable of handling this or that case. You’ll be too busy marketing, meeting potential clients and managing a new practice to constantly second guess yourself. Second, you’re excited about starting a firm and with that kind of passion, it’s going to be difficult to fail.
In terms of starting a firm, there’s really never an optimal time financially. When you’re young and single, you may have only minimal savings and be saddled with student loans (which worst case, can be deferred for a time), but at the same time, your living expenses are pretty basic. You may have the flexibility to take on a roomate, you can qualify for cheap health insurance and you’re still accustomed to living on a student’s budget. As you age, you’ll probably have more savings, but you might have a mortgage, a family to support and child care expenses, all of which are more difficult to downsize.
Youth brings other advantages to starting a firm. Retirement still looms far off so you don’t have to fret about skipping IRA payments for a couple of years. And if for some reason, your practice doesn’t work out, you’ll be sufficiently junior to find another position.
In terms of building up a client base, generally speaking, you’d have to remain at a firm for a pretty long time before you can lure firm clients to your new practice. Chances are, junior associates don’t get enough time with clients to make them their own. The one client related benefit that working for a firm provides is that it gives you time to market and network on someone else’s dime, for example, by writing articles or attending conferences sponsored by the firm. But if you’ve already been practicing in your field for a year, chances are, you’ve laid enough of a groundwork with regard to networking and meeting potential referral sources.
Your plan to keep start up costs low is wise. If your financial situation is shaky to begin with, the last thing you want to do is saddle yourself with overhead so that you feel pressured to take on anything that walks in the door. I don’t know what health insurance will cost you (investigate COBRA costs and other plans that might be offered by groups you belong to), but you can probably purchase decent malpractice insurance for a couple of hundred a month (please don’t skimp there). Add up your costs to get a sense of what you need to take in each month to get by. And don’t forget that in addition to finding your own clients, you may be able to handle per diem assignments for other attorneys or court appointed work to make some money while you establish yourself. After examining the numbers, maybe you’ll decide to hold off another six months or a year if you feel that the extra money you can save will buy you leeway. Or maybe you’ll decide that it won’t make a difference and you’ll stick to your original plan.
As for the colleague who’s got you rethinking your plan, consider what she, as well as others have to say. But then, like any good lawyer, consider all the surrounding evidence. In the case of your colleague, you might try to probe further to figure out why her
practice failed and what you could do differently which might be a
productive discussion. But if this lawyer isn’t willing to engage in that type of productive discussion and only wants to complain about the obstacles to going solo, just thank her and walk away. Many lawyers who’ve had a hard time getting a practice off the ground will advise others against it because they can’t stand the idea that you might succeed where they failed. Likewise, lawyers working at firms who don’t have the gumption to go out on their own may also be quick to point out your folly. It’s hard to be objective in giving advice, we all bring our own baggage (myself included – after all, I am a happy solo!)
Going solo in the face of negative advice, a shaky financial situation and no clients is scary. I’d question your judgment if you weren’t having doubts. But to my mind, what’s scarier than starting a firm in your circumstances is waiting for the right time, for enough money, enough clients, enough knowlege and enough support only to have the opportunity to go solo pass you by.
Best of luck and let all of us at MyShingle know how it turns out!