Make Money Mondays: Develop In & Out Legal Services
Not surprisingly, most lawyers would rather handle one $30,000 case than 30 one-thousand dollar matters or 60 five-hundred dollar matters. Managing thirty, or worse – 60 – different matters can involve significant transaction costs even when a firm is highly automated.
On the other hand, when you’re starting out or if business is slow, a couple of $500-$1000 dollar matters in hand are worth more than an elusive five-figure case because at the very least, they’ll cover the bills. What’s important, however, is that if you’re going to open your doors to $500 or $1000 matters is to get in and out of them as quickly as possible. That’s why I suggest developing what I call “in and out legal services.”
In and out legal services are those that you or an associate can complete in a matter of hours. They differ by practice area. In my practice, one type of in and out service that my firm offers is trouble-shooting power purchase agreements for compliance with applicable federal law. Another, now that I have an associate with applicable specialization, involves filing a Freedom of Information Act (FOIA) request or appeal. But it’s easy to imagine similar, one-off services. Maybe it’s drafting a will for a very small-estate, reviewing a contract that’s already been drafted, preparing papers for an uncontested divorce or writing a letter challenging denial of health-care coverage. Or, you can offer paid client consultations or strategy sessions.
Getting bogged down is the worst risk of an in and out service. So you’ll need a well-defined standard representation agreement that ruthlessly constricts the scope of work to avoid uncompensated creep-age. Also bear in mind that there are some obligations that you can’t contract around – for example, if you prepare a document for a client, you’ll need to explain its implications or make yourself available to answer questions – or you may find yourself in this lawyer’s unfortunate situation.
You’ll also have to adopt a system for prompt payment – either credit card or electronic check, to maximize the time value of bringing money in the door quickly. After all, when cash flow is slow, there’s a huge value to pocketing $500 within 24-hours, but not so much if you can’t collect it for three months. As for marketing in and out services, you can decide whether to make it a formal offering on your website – or simply an additional service that you share with colleagues who may not have interest in small matters, or that you present as a fall-back option to clients who don’t want or can’t afford full-service.
Relying solely on a diet of in-and-out matters is unlikely to serve as a foundation for a sustainable practice. But if you find yourself in a situation where you can’t make rent or there’s a CLE you want to attend but can’t afford, that $1000 in and out matter will sustain you at least until the next five — or maybe even six figure case comes along.
Illustration courtesy of Shutterstock
Just as it can easily take longer edit a brief that someone else has drafted than to draft one from scratch, I suspect (and have heard as much) that it can easily take longer to review a contract that someone else (whether lawyer or non-lawyer) has drafted than to draft a contract yourself.
In my small-town practice, I do a fair amount of flat-fee work with uncontested divorces. An important lesson I just relearned is always be clear on the local judges’ handling of whatever you’re filing. As I just did an uncontested divorce — in an adjacent judicial district to the one I normally practice in — where I lost my shirt because the judge it was in front of always requires appearances prior to signing an agreed order, and my fee didn’t provide for the two hours of requisite travel time.
Another key is to specify that the money is earned immediately. That way, if a client takes 3 months to review a simple letter before you can send it out, you don’t get stuck.
This might be a way to get home at a reasonable hour most days, too. I’m intrigued by the idea.
“earned immediately” or “earned upon receipt” is not allowable in several jurisdictions, including NC where I practice. So make sure that you know the ethical rules regarding your jurisdiction in regards to this language.
Ohio just clarified that you can have a flat fee be earned upon receipt, but you also have to provide a refund of some of the fee if the work isn’t completed.