Thanks to a tip from a sharp eyed reader, here’s a link to a story that I overlooked: The Secrets of Million Dollar Solos, (GM Filisko and Meg Tebo, ABA Journal 3/29/07) that features four solos running million dollar practices. There’s much that other solos and the legal profession generally can learn from these four lawyers’ respective success. Here are the lessons that I gleaned:
Billables alone won’t make you rich Some, but not all of the lawyers featured handle contingency cases. But interestingly, even those lawyers who did not handle contingency work offered alternative billing arrangements such as flat fees. The use of alternative billing, be it flat fee or contingency or some other model is significant, because as a solo, the billable hour limits you to the number of hours you can bill in a year. Even if you bill $400 an hour, 30 hours a week, 50 weeks a year, you won’t hit the million dollar mark. By contrast, alternative fee arrangements can help you earn more without necessarily working more hours.
Outsource Virtually all the attorneys interviewed outsourced work to other lawyers, paralegals or research companies to keep overhead low. Employees are costly. At the same time, employees can help leverage earnings, which is essentially the model used by biglaw. Outsourcing gives lawyers the best of both worlds: qualified workers at a lower cost who can still be billed at a higher rate. And when and if you decide to hire, do so carefully.
Low overhead At least one lawyer described that lawyers don’t need all kinds of fancy trappings to attract clients. And when you keep overhead low, you keep more money for yourself. Many large firm attorneys who leave their firms to start a practice are surprised to discover how much they can earn by charging as little as half to seventy five percent of their big law billing rate, simply because they keep so much more of what they collect.
Of course, for some solos, starting a firm isn’t all about the money, but about autonomy and flexibility. The article acknowleges these goals as well. After all, as the disatisfaction at biglaw makes clear, money doesn’t always buy happiness; sometimes you trade money for other things that matter.