Not all lawyers who start their own firm experience wild success. This month’s American Lawyer focuses on three who did not. I don’t take issue with the story’s spin because I believe that it’s important to impress the challenges of starting a practice. Too many of the new crop of opportunist start-a-firm gurus blithely gloss over the drawbacks and often don’t offer strategies suitable for lawyers seeking to continue in a biglaw practice area. What I do find objectionable, however, is that many of the major legal trade publications that cater to biglaw readers rarely if ever feature large firm attorneys who are making a go of solo practice and discovering modest success.
The American Lawyer article describes the path of three large firm lawyers, Scott Jaffe, Paul Roberts and Ross Schiller who this past winter, opened a boutique law firm in Manhattan specializing in finance, commercial law and bankruptcy. But as of last month, Schiller had left the firm in search of a new job, while Jaffe and Roberts were in the process of merging their practice with another start-up. Based on the article’s description, there’s much that the trio did right in starting a firm such as keeping start up costs low. But it’s also apparent that Jaffe’s, Roberts’ and Schiller’s biglaw background handicapped them when it came to marketing their practice and operating it efficiently:
The lawyers contributed $2,000 apiece for the initial capital. Because the expenses were so low–the rent was only $1,500 a month–they also thought they could charge less. Jaffe, Roberts & Schiller advertised lower hourly rates, and said they were open to fixed-fee arrangements.
It wasn’t a smooth launch, though. They held off marketing themselves for about a month, to see if a friend who’d been cut from Morgan Stanley would join. He didn’t. It also took a month longer than planned to get brochures. In the meantime, Jaffe trolled Craigslist for contract attorney gigs, but he passed on them when he discovered they typically pay just $35 an hour. Roberts’s wife pitched his services to someone sitting next to her on a bus.
There were also adjustments. “[Jaffe] clearly has the hardest time dealing with all the things we have to do to start a firm,” Roberts said in April. “He’s always had secretaries doing his markups, and he’s never used a computer before.” Jaffe, 44, admitted that he was still getting used to typing his own letters. “Especially for a dinosaur like me who didn’t type e-mail until now, that is the hardest part,” he says.
Work was slow to arrive. Roberts, 40, says he was close to signing a client who could have covered their monthly expenses. It never happened. The group kept busy with pro bono work, including Chapter 7 filings that Jaffe and Roberts handled to pick up bankruptcy experience, and a loan modification for one of Schiller’s relatives.
I give the three lawyers high marks for keeping start up costs fairly low. Sure, they could have saved even more by dispensing with office space and working virtually, but splitting $1500 rent three ways won’t break the bank. Keeping costs down gave the new firm flexibility to break from the billable hour and experiment with flat fee billing. And while some might criticize the firm for offering lower rates and competing on price, I see nothing wrong with that approach per se (especially starting out) provided that you compensate by added efficiencies and aren’t losing money.
The firms decision to diversify with new practice areas, such as bankruptcy and foreclosure and to learn the ropes through pro bono was also wise. And Roberts’s wife had the right idea in pitching her husband’s service on the bus. Her word of mouth marketing efforts may have been a bit haphazard, but starting out, it’s important to get the word out anyway and to anyone you can.
On the other hand, the lawyers made avoidable mistakes. Waiting two months to get started on marketing ensured a slow start to the business. And while firm brochures are useful in some contexts, they should not have been such a focal point of marketing to cause added delay. As an alternative to brochures, the lawyers could have put together an ebook for download – less costly than a brochure, plus a way to build a mailing list. The article also makes no mention of blogs, use of social media or efforts to market through law firm alumni lists. Perhaps these lawyers tried these measures, but it seems unlikely.
On the efficiency side, in this day and age, a 44 year old lawyer should have the skill to type emails. There’s no excuse for not keeping up to date in the twenty first century, where not just lawyers, but everyone is reliant on technology for communication.
Still, I commend these lawyers for making a go of starting a practice. While so many of their colleagues continued to hunt for jobs or perhaps even left the profession, these three lawyers took their destiny into their own hands. As a result, at least two of the three have found new opportunities. At the same time, I wish that these lawyers had been better informed about starting a firm and had access to information and role models who might have helped them find more success.
Here’s my question for you: at a time when the large firm structure is crumbling, why aren’t the major legal trade publications covering the solo option more evenhandedly? Is it because they believe that most readers have no interest in the solo option? Or do biglaw attorneys lack interest because these publications rarely put the positive stories out there?
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