Law may be governed by precedent, but oh how soon we forget. Once upon, the behemoth law firm Skadden, Arps, Meagher & Flom was just a trio of fellows named Marshall, John and Les who had the crazy idea to hang out their own shingle. Yet now, forty years later, as the economy tanks and jobs in the legal industry decline and young associates yearn for better work-life balance, large firm attorneys rarely consider solo practice as an option. Why is that so? Below, I’ll discuss some of those reasons.
First, many large firm attorneys never cross paths with a solo en route to their firm. How do I know? Because before I embarked on my own journey as a solo, I didn’t know a single lawyer who opened their own practice. Moreover, many of the so-called top tier schools, from which the majority of large firm lawyers hail, don’t just lack resources or information on starting a law firm, but indeed, regard solos as a strange species from another planet. One reason why starting a firm eventually became a reality for me was sheer happenstance: I’d met a solo energy lawyer who worked opposite to me when I was at a federal agency, and saw that it could be done. It wasn’t until I actually opened my firm and got it up and running that I discovered the hidden network of underground solos that I’d never noticed before.
Though the blogosphere has done much to bridge the gap between large firms and solos in the profession, its reach still hasn’t yet spread that far because we follow different sites. Most large firm attorneys favor blogs like Above the Law or WSJ Law Blog, while most solos read the multiple blogs on starting a firm as well as lots of the so-called thought leaders in the marketing, social networking, entrepreneurial and high tech circles (I can furnish my faves if youre interested). Even though I’ve been blogging at MyShingle for almost six years and it’s my flagship site, I’m surprised that among my biglaw buddies, I’m better known for my postings at Law.com’s Legal Blogwatch. Parallel universes, a colleague recently observed.
Second, myths abound about independent practice – from both the biglaw and solo side of the sphere. Many at large firms assume that solo lawyers are scraping by or representing clients who can’t afford to pay. And while that’s true in some cases, many solo lawyers make out quite well, especially if you factor in the number of hours that they work compared to their large firm colleagues. As for some of the resources available on starting a firm, many do not address the issues unique to former biglaw attorneys who seek to open a practice. I know that when I started my firm, Foonberg’s classic, How to Start and Build A Law Practice, while incredibly useful for nuts and bolts (plus, reading it made me feel part of the solo tribe), the bok didn’t resonate with me since I realized that joining a local rotary club or chatting with my accountant wasnt going to help me build my practice. In fact, that’s part of the reason that I wrote Solo by Choice: to discuss ways to move from a large firm to independent practice.
Truth is, like anything else, moving from biglaw to your law comes with pros and cons, some of which I’ve listed below:
–Practice Area: At biglaw, you’ve probably developed a useful practice area expertise in matters such as complex litigation, regulatory issues, insurance or defense side employement for which you can command high rates. Let’s face it, it’s easier to get a practice off the ground when you can handle matters for the types of clients don’t flinch at a $20,000 retainer.
–Lower Rates Many new biglaw to solo lawyers report that if they’re able to take just a single client with them, that client will typically send much more work than it ever did when the lawyer was at biglaw. The reason should be obvious: you can probably charge 50-75 percent of your large firm rate and still come out better off. Use these “anchor” clients to your advantage and come up with long term arrangements to lock them in at a lower rate to give yourself a stream of revenue in the early months.
–Possible high end contract work Even if you can’t find any clients in your practice area, you may be able to provide of counsel or high end contract work (i.e., at rates of 3-5 times the document review price) to other firms. I should note that even in the waning economy, it is virtually impossible to large firms to outsource specialized work. (though you might try to convince law firms to outsource innovation to you – an idea that occurred to me after seeing this post on how countries are outsourcing innovation to the US (HT www.twitter.com/lizstrauss)
–You Stand Out: As I said at the outset of this post, many biglaw attorneys couldn’t even name three solos in their community. And in moving from biglaw to yourlaw, that’s a good thing because you have a built in source of referrals. Likewise, if you clerked for a judge and have a good relationship, he or she may have cases to refer as well.
But your referral pool isn’t limited to your high-fallutin’ contacts. You probably know plenty of administrative and tech staff from your firm who may need help or have friends who do. My very, very first case was referred to me by they guy in our firm’s copying office, who had a colleague who’d been arrested for fare evasion.
–Good financial footing Having worked at biglaw, you may have been able to save a bit of a nest egg, or at least make a considerable payment down on loans. And if you negotiate wisely, you can probably come up with even more cash to get started. Many of the firms laying off associates or deferring start dates are offering decent sized severance packages, with 3-6 months of pay. Add that to unemployment (yes, you should apply for unemployment – you are entitled) and vacation time, and negotiate benefits such as firm payment of COBRA or bar dues for the year, and you’ve got a nice financial cushion to ease stress during your first few months.
–Lots of options – It may not seem like it now, but as a large firm lawyer starting a firm, you have a safetey net. The economy travels in cycles, and I’ve seen times like this before during the course of my 20 year career. It always picks up. So if you start a firm and it’s not for you, in most cases, you can always go back to the biglaw track. Don’t listen to what others tell you about how hard it is to return to a large firm – I’ve seen lots of people do it. In fact, that was my plan when I started my firm in 1993- to create my own practice and avoid a gap on my resume while I rode out the recession. But 15 years later, I’m still here.
No one to show you the ropes: When you start a firm out of biglaw, you won’t know other solo attorneys who can recommend the best way to get yourself on the court appointment list or where to find cheap office shares (if that’s the route you decide on) or who’s the cheapest malpractice insurer. For that, read my tips on finding your way into the hidden network of underground solos.
Moreover, you’ll find that biglaw practice lacks the collegiality of the solo and small firm world. Whereas if you call a solo or small firm lawyer to help you out with a filing, they’ll likely send you a sample or mark up your draft, unfortunately, most of your former colleagues at biglaw won’t share as nicely.
No real practice experience:
Here, try taking local courses sponsored by pro bono organizations – you’ll find them on topics like banktrupcty, family law and trusts and estates. You’ll meet other people in the class and learn what you need to do from practitioners.
Clients don’t always want solos Those who aren’t familiar with the irrationality of biglaw large corporations (staffed with former biglaw attorneys), don’t realize that many times clients simply do not want to hire solos. As someone trying to promote a biglaw practice, you will find yourself competing head to head with large firms and often losing out, no matter how hard a sell you give on client service or lower costs. For many former large firm lawyers, this phenomenon can be demoralizing, but hey, it is what it is. And instead of complaining about the problem, as some are inclined, find a way to cure it, for example, by teaming up with other independent lawyers to bid for a client.
The Money Many former biglaw solos do well, often exceeding their biglaw associate salary within 2-3 years out (more if they change practice areas completely, less if they bring an anchor client). But, if you worked at a large city firm where partners are taking in $1 to $2 million/year that kind of income may be hard to match. It’s certainly not impossible, but if that kind of money is important, you may find yourself frustrated in your own practice.
Please chime in with comments if you have anything more you’d like to add to this conversation. And if you want to be inspired, see this past collection of posts.