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Would You Rent Office Space If It Only Cost $500/Month – And What Can We Do To Make That Happen?

by Carolyn Elefant on April 10, 2013 · 19 comments

in Office Options, Trends

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[Note - this is a long read, and it's about much more than the home vs. office debate but rather, the importance of affordable office space to the sustainability of solos and long term access to justice]

Fishtown Lawyer Jordan Rushie makes some strong arguments in favor of renting office space when starting a firm.  As Jordan explains, office space gives lawyers a presence in the community and an opportunity to open up that space to local businesses that might become clients. An office also imposes discipline and routine, and can make lawyers feel more like business owners rather than unemployed or self-employed – and therefore, increases the chances of success.

Jordan’s not imagining this either; the stats back him up. As I’ve written previously, studies show that lawyers who work in office or office share environments earn more than their home-office counter parts.  And based on my own experience and observations, those solos and smalls who have some kind of dedicated office space generally tend to have more sustainable practices that they’ve grown beyond one lawyer than those who continue to work from home (the exception being lawyers who have bonafide national practices and spend large amounts of time traveling to other locations and therefore, have no need for a real space).

But here’s my beef with Jordan’s post and others like it: they suggest that if lawyers don’t start out with an office, then at best, they’re destined to fail and at worst, are either frauds or losers.  And that’s just not so.  Rather, many lawyers simply can’t justify the cost of an office starting out and conserve their resources for other priorities.

Ever transparent, Jordan discloses that his law firm’s multi-office space with conference room that  he shares with his partner and is located in the community that the firm serves costs $1000/month with utilities and taxes (or around $500/per partner). At those rates, office space is almost a no-brainer even for a complete newbie.

The trouble is that space costs far more in most metropolitan areas – and the added cost isn’t necessarily offset by ability to charge higher rates. Here in Washington D.C., one thousand dollars might get a small space in a class B building or a sublet from an existing law firm. (Here’s what $1600/month  gets you, for example). Jordan recommends renting cheap space – but bringing a client to a dingy office that reeks of cigarette smoke and is located in a seedy part of town isn’t exactly going to inspire confidence or generate client referrals.

My guess is that if practice-appropriate office space (i.e., attractive space for lawyers serving business or high worth clients, plainer space near the courts for consumer practices, etc.) were available for $500/month or less, the majority of lawyers who currently office from home would rent space precisely for the reasons that Jordan describes.  Unfortunately, the cost of renting office space as a solo remains the one expense that hasn’t been slashed because of technology — as has been the case for legal research, cloud-based practice management tools and computer equipment.

Sure, technology has enabled lawyers to displace the cost of an office since the cloud and mobile devices allow lawyers to work from anywhere. But virtual solutions are most effective either for the short term (early days of practice or working part time while raising a family) or as a hybrid (online alternatives that supplement brick and mortar services).  In this regard, I agree with Jordan that for lawyers, physical presence is imperative to long term sustainability and opportunity.  Indeed, if virtual practice was all that was needed, South Dakota wouldn’t have to pay to import lawyers to represent the underserved.

You can call me old-fashioned if you want, but even today’s most cutting edge technology companies that so many lawyers seek to emulate recognize that office space and regular physical interaction is critical. That’s why Marissa Mayer is calling all homebound workers to return to the office, that’s why Google provides three square meals to employees (to keep them on site) and that’s why the most successful incubator programs offer chosen startups free office space as part of the funding award package.  Coworking space also abounds in the technology industry and makes low cost, but dedicated work space available.

Contrary to some of the LexThink/Ignite Speakers, predictions of the death of the brick and mortar office have been greatly exaggerated. Of course, even brick and mortar offices must have the capability to serve clients online – but as Jordan points out, the physical space itself is also needed to enable solos to blossom and grow into sustainable businesses that will serve clients for generations to come.  Because of the importance of physical space to a firm’s longterm success and the lack of affordable space in many locations, the legal profession needs to address the problem of the high cost of office space in some way other than simply relying on virtual platforms.

One reason that I signed on to advise LegalForce is because the concept is anchored by a brick and mortar store that gives lawyers the opportunity to serve the community and [DISCLOSURE - I ADVISE THIS COMPANY!] But there should be other solutions – maybe bar associations or (more likely) private aggregators who could bundle solos into groups and negotiate rent for a larger shared space. Maybe law firm vendors could create sponsored spaces that they could rent at reduced costs. Lawyers don’t necessarily need a 500 square foot corner office with a view; at a minimum, a dedicated cubicle which can be accessed 24/7 as well as use of private conference rooms for client meetings or public seminars should suffice to give lawyers a presence in the community and a work environment conducive to success.

So to summarize, do you need office space when you’re starting a practice? No – and you shouldn’t take on the cost unless you’re certain you can cover it. But if cost isn’t an option, should you rent practice-appropriate space? Absolutely. Now, what can we do it make it happen?

Do you agree that physical presence is important for the long term vitality of a law practice? If not, why not? On the flip side, do you believe that a virtual law practice can be financially viable in the long term? Please share your thoughts below.

  • http://twitter.com/IndyFrchsLaw Josh Brown

    Great post, Carolyn! I just launched my own solo practice on March 1, and have a physical office share space. My situation is somewhat unique, as I locked (or lucked) in to an incredible deal where I share space with a law firm I used to work for at a very reasonable rate of $400/month. I have a beautiful office, conference room, and storage. Can’t beat it. That said, even if I didn’t have this space, I had planned on renting an office and believe, at least for me, that is the way to go. I think this decision is a personal one, based on your own characteristics and circumstances. I have a young family, and easily would get distracted if I worked from home, despite the fact that I have the space and could do so. Additionally, I am a “people person”, and like being around others. Sharing a space with another law firm filled with people I know and like has been great for that purpose. From the standpoint of clients, my clients don’t actually care if I have a space or work from home. The reality is, I mostly go to them and their big concern is getting great services at a fair and reasonable price. All in all, for me it is better to have a physical space away from my home. Some place to go to, an office to be proud of, and people to be around. That said, it is truly a personal decision, and I don’t think there is a right or wrong answer. I do, however, think, that clients care less and less about whether or not their attorney has a nice office (or an office at all).

  • shg

    So having an office is good, but not having an office if you can’t afford one is fine too? If one is good, how can the absence of one be just as good?
    Or are we back to the concept that good is redefined at one’s convenience, much like ethics matters unless they’re inconvenient, in which case they don’t matter?
    Yes, it costs money to have an office. In a city, it costs more money than in a small town. And a big office costs more than a small one. But there are implications to all of this, and they can’t be ignored just because someone can’t afford to do it right. So either an office matters or it doesn’t matter, but (with some exceptions for particular niche practices and/or lawyers with established practices) I don’t see how it can be both.

  • Carolyn Elefant

    Here’s why I am always so ambivalent about this Scott. When I started my firm, the only space that I could afford was a disgusting, smokey office – so I went with a really nice looking virtual space. In fact, the first three clients whom I retained that year remarked on how nice the space was – and I’m not sure I could have sealed the deal without it. Perhaps it is my own personal experience that colors my advice.

    At the same time, I do think that taking on office space prematurely has ethics implications. My biggest concern about the focus on office space starting out: it’s too easy for lawyers who can’t afford it to take on a large expense and then start taking questionable cases (Threshold Law) or running a volume practice to pay rent. Some may force settlements prematurely or even borrow from the trust account. That’s the problem. And while it’s fine to say that lawyers who can’t even pay rent shouldn’t start at all, today’s reality is that lawyers can’t always do that. I’d rather see lawyers buy malpractice insurance than pay rent, and use the time to establish a credible reputation through blogging or networking rather than handling two bit volume cases. (And by the way, my advice on taking on large expense for an office extends to taking on large expense for a fancy, SEO-enhanced website and pay per click. That’s not smart either – and if a lawyer has the cash to pay for that stuff, I’d say spend it on an office first)

  • Sandy

    Sigh – I wish I could convince young attorneys in my neck of the woods to give my space a shot. We have 4 attorneys in the building (three older and one 5 years out) and I try desperately to get young attorneys into the space I have open. Its $250 a month but no takers. I feel like a curmudgeon, but I found officing with older attorneys invaluable when I started out and I don’t understand why young attorneys don’t see the value in having someone right next door who has been there/done that….

  • Carolyn Elefant

    Where are you? I’m an old attorney and I’d take the space! When I did move into my first office space, I leased from an experienced practitioner who was so generous with rent, advice and office access. I kept the space for 8 years and even though the office wasn’t as modern or attractive as the firm I’d worked or where I am now, it was one of my favorite spaces because it was the first time that I felt that a place was all mine.

  • Sandy

    I’m in Minnesota and the space is in an old converted house in an outer suburb. Its got a high cute factor and I know someone will be in there eventually, just probably not another attorney – which is too bad.

    I wouldn’t own this building if I hadn’t moved in here 16 years ago. The previous owner offered it on a contract for deed because I’d been here 16 years and he knew he could trust me. I never would have gotten this opportunity officing out of my house. I’m pretty sure the person I wind up selling it to won’t work out of their house either. When I sell, my first thought will be someone in my building – just like the previous owner did for me!

  • http://www.davidshulmanlaw.com/ David Shulman

    I started my solo practice four years ago, in February 2009, after 3 years at a large law firm and 7 years with the IRS.

    Whenever someone asks me what the biggest mistake I made the answer is easy – that I didn’t get an office from day one. I thought, genius that I was, that I would save overhead by working out of my home. I thought that I would meet clients at their homes and places of business and [shudder at the idiot that I was] at Starbucks.

    It was stupid, and it took me far too long to realize it.

    First, my clients want to come to an attorney’s office. I’m in downtown Fort Lauderdale on Las Olas – a fancy business district. It shows that I’m a “real lawyer” and not just some schlub. They didn’t want me in their homes. They didn’t want me to come to their work. They wanted to come to their lawyer’s office. The one exception is people who are too elderly or ill to travel, and I am happy to come to them.

    Second, let’s put aside clients for a second. Working at home was horrible for me. There is something mentally and emotionally satisfying about getting up, getting dressed, and going to work. At home, there was no reason to shave, or put on professional clothes.

    Plus, I was horribly lonely. I didn’t get to see or interact with people. I became less productive with all of the distractions of home, etc.

    Now, I’m in an executive suite downtown and it’s great. Like I said, I get dressed and go to my office, which is my office. There are other attorneys and professionals on my floor who I’ve developed a professional relationship with and have referred business back and forth.

    I earn the rent I pay every month just from being in this office and getting referrals from the people here.

  • eplawyer

    I get all the reasons for having an office. But since starting my own practice and working from home 4 years ago, I discovered one thing — I get more done working from home. One thing I always hated when I worked for others was getting up and getting dressed every morning to go into the office. If I rented space, I would feel I had to go in every day to justify the expense. And then I would hate it.

  • http://twitter.com/GirlsGuidetoLS Alison Monahan

    One option that’s worth looking into is whether there are suitable co-working spaces available, even if they don’t cater to attorneys. Here in San Francisco, they’re a dime a dozen, and I know several young lawyers who work out of various spaces, and pretty rapidly became the go-to lawyer for the emerging companies working in the same location.

  • http://www.facebook.com/jrushie Jordan Rushie

    Slippery slope on that argument. If ethics is the concern, the lawyer probably isn’t appropriately capitalized enough to start a law firm in the first place. And you could say the same thing about a lawyer who has to pay a mortgage or any other recurring expense.

    My view – do it right from the beginning. Save up some capital, get an office, and put yourself in a position to succeed from the start. If you can’t afford office space right from the get go, consider saving more money before making the jump into solo practice.

    If you have no money saved up, and no clients, I don’t think a jump head first into solo practice is responsible. Start your practice when you’re ready.

  • http://www.facebook.com/profile.php?id=1084720462 Steve O’Donnell

    I think I only saw one client face to face last year. Two if you count the one that likes to do buisiness over drinks.

  • Brian Tannebaum

    I enjoyed reading this post, until I got to this: “do you need office space when you’re starting a practice? No.”

    I understand Carolyn’s position is based on cost, but in doing that we abandon the concept of investing in a practice. The first question is not “can you afford space?” It’s “what type of practice are you looking to have?”

    If you’re looking to represent a certain type of client or get referrals from lets say bankers, lawyers, insurance companies, etc. then you need to understand the concept of “out of sight out of mind.”

    Because of my practice, I like to be where lawyers are – downtown. After 18 years can I survive, and survive well from my house, sure, but I’ve made more money walking down the street to get my shoes shined or grab a coffee than I ever could pounding away on a keyboard at home while saving money on rent. It also helps when a potential, or current client calls and says “I need to see you right away.” At this stage of my career will a client wait a couple hours, yes, but sometimes that availability makes a difference.

    I agree that the type of practice dictates the necessity of office space, but shouldn’t we ask lawyers about more than cost, shouldn’t we ask lawyers more than about “necessity?”

    Unfortunately, a lot about client retention is perception. I hear it all the time. “I went to see another lawyer but his office was a mess,” or “he looked like he slept in his car.”

    We need to stop talking about the cheapest way to practice law and start talking about how to help lawyers who are looking to do more than just focus on the lowest common denominator.

  • Jeena Belil

    Most of my clients are health-care providers who appreciate that they don’t have to rearrange their busy schedules to come to see me. Additionally, visiting them gives me insight into how their practices are run. As a result, I work from a home office – a 100 square foot space- which is set off from the rest of the home. In the event I need to have an office meeting, I rent a Regus office for that purpose. It has worked for me for over the five years I’ve been solo.

    Because my little firm is growing, I’d love to be able to find an office in a cute old house near my area, but the rents, even this far away from NYC, are outrageous.

    If I could find something for $ 500.00 a month, I’d snap it up.

  • Benj

    I’m a 3L and have been planning to start my own practice right of the gate since I started law school. Office costs have always been my hang up. I started talking with a lot of young solos in my area about how they afforded office space. Come to find out, quite a few of them have worked out a deal with the law practice they’re renting the spare office from to do X amount of appearances per month, refer all personal injury cases and take no referral fee, work X amount of hours for them, etc. in exchange for rent. Some of them add an extra $200 or so on top of services.

  • Elizabeth Wozniak

    Thanks for the thoughtful and thought-provoking blog.

    One size doesn’t fit all to be sure, but for me have a physical space has been absolutely critical for several reasons.

    First, psychologically – I need work space away from home, otherwise there would be no division between work and home. I am just not disciplined enough to not splatter spaghetti sauce all over an affidavit.

    Second, having other lawyers around, even if they don’t practice in the same area, is invaluable. Law is so much about judgment calls so having someone to bounce things off is really important, especially when you are just starting out. Sure, you can call or email people when you need an ear, but it is so much nicer to have other lawyers around even just to have a quick chat with in the morning. And for those who don’t ever meet clients face to face because they practice in such a technical area, I expect they built that specialization in a traditional firm setting in the first place.

    Third, whenever I am conflicted about something, I always error on the side of “if i was the client, what kind of lawyer would I want to hire?”. That, more than anything else, has driven my decisions on fees, space, hiring, specialization, etc. Personally, I would not want to meet with a lawyer in a coffee shop.

    Finally, it irritates me that there’s this push for lawyers to start virtual firms. I don’t know why I find it so annoying. Perhaps it has something to do with this idea that law is just that easy, and building a practice is just a matter of a simple equation. Rather than focus on what’s actually important – ie being the best lawyer possible. A website+ twitter + linked in do not a good lawyer make.

  • Edilberto Durano

    I think renting is less expensive in purchasing, but it really depends on the place. If it’s good then a reevaluation is therefore needed.
    Ed of EverestAuctions.com

  • http://profiles.google.com/eric.southward Eric Southward

    But remember you don’t need Your own office Suite. many law firms and other Professionals have an extra office OR two They would be willing to rent for $500 or So. Especially If all you need IS an internet Connection. It’s an easy way to set up satellite offices in neighbor in Communities too.

  • $$$Like Gang$$$

    u sound like you big tyme nigga

  • A.Sh

    Hi, where are you? I’m looking for renting in LA

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