I wanted to clue any of my readers in on a new video about starting a small law firm that I found recently on YouTube. I feel like somewhat of a hack on this blog sometimes, and this video is why. If you got to my blog, please read it, and then watch this video for some great advice from somebody who has already been there and done that.
Starting a Law Firm | Being Patient
Starting a law firm takes a lot of patience and an involves an acceptance of a certain amount of controlled risk. In other words, in the beginning, you need to be willing to work very hard to receive very little.
I will admit that I get a little melodramatic every time I drive by a restaurant that is no longer open or a store front showing an empty space where once there was a small business. This got me to thinking about patience and the willingness (stuborness?, stupidity?) to get through the tough times with irregular pay when starting a law firm.
I recently spoke with another solo attorney the other day at a collection hearing. I was trying to collect a judgment against his client. We both understood that we were adveraries in terms of representing our respective clients, but there was also a certain amount of comraderie. This is one of the things I really love about my job – actual professional comraderie in the face of strife. This attorney also appears to be doing well and appears happy. Anyway, we got to talking about starting a law firm and the things we didn’t like about large law firm life. He also mentioned that he is very happy he left his old law firm where he was a partner and that he still very happy being on his own. The discussion was pretty obvious, but he made some good points about starting and building a law practice. The main one being the general advice that “it takes a couple of years.”
I have been doing decently at my own solo law practice while I wrap up client cases from clients that came with me from my old firm. I have had work to do when I want it, but I have realized that networking and marketing needs to be a full-time, ever present job. It takes time. It takes a couple of years. I think I am ok with that. Luckily, I have always made marketing a big part of my practice – perhaps because I actually enjoy it. As I’ve already posted, having a law firm marketing plan has helped my firm in a big way. Developing a niche practice has also been a good idea. But, I have also fazed out my Indiana practice and will be doing this all over again in Minnesota.
In sum, I hope to be more like the attorney who kept at it and is still practicing as a solo attorney. I also hope that I’m not easily satisfied and that I continue to stick with my desire and goal to build a thriving law practice. I hope anybody reading this post feels the same way.
It takes time and effort and sometimes it is a difficult mental struggle. Starting a law firm, is about patience, mental fortitude, and commitment. In short, it takes a couple of years.
Starting a Law Firm | Law Firm Office Sharing
I have spoken with a law school classmate of mine recently about whether he might be interested in starting a law firm in Minneapolis, MN with me. The basis for the discussion ultimately resulted in a decision that, when starting a law firm, it is probably best to not have a partnership at first, but, rather, an office sharing arrangement.
My friend is currently practicing law in a town within 100 miles or so where am going to start a law firm in Minneapolis. There is an obvious logistical problem for him in terms of leaving a practice and starting over in an area where he can’t bring any clients with him from his current law firm. Furthermore, he has the risk of leaving a practice and going out on his own. In other words, starting a law firm with me is not such a good gig for him. But, I can tell he is interested. So, we began discussing what it would take to start a firm together and make it work.
At the beginning, unless both attorneys have a self-sustaining law practice or a fairly stable “book of business”, it would be tough to partner-up right away and start a firm. For instance, in my case, my friend has clients in Minnesota already and I do not. Therefore, who do you think will have more work to do and more money to make for the firm right away? That’s right: my friend. This may be a good deal for me, but it certainly wouldn’t be for him.
What is the answer to this problem? The office-sharing arrangement. This arrangement would mean that my friend and I would not form a partnership, but, instead, invest in an office together and set up different law firms within the same building. We each would have our own separate corporate forms (LLC, Corp., sole proprietorship, etc), but we would share office space for purposes of helping with overhead. In fact, this is the arrangement that my old firm had with another well-established firm in town.
Office sharing allows attorneys and their new law firms to keep law firm overhead much lower. It can be a great thing. It allows attorneys to share rent costs, secretary costs, utilities costs, and other general costs. Think about it: it would be wonderful to only pay 1/2 of the $1000 a month lease on a building or 1/2 of the receptionist’s salary. As I said, my old firm had this arrangement. I can also tell you that my old firm brought in several million dollars a year in revenue. To me, that is pretty good money, and yet we were still in an office-sharing arrangement. Of course, my old firm owned the building and was making money in rent from the other firm, but that is a pretty good arrangement as well.
The office-sharing arrangement would also give both of us the benefit of having another attorney around to bounce questions against. This can be huge for battling isolation. I can’t tell you how often I asked questions of other lawyers in my old office just to get their thoughts. To be honest, that is one of the things I miss most as I practice law on my own. The ability to have another attorney listen to your thoughts on strategy or other case issues can be extremely helpful.
Now, there are also ethical considerations that come into play when sharing an office with another lawyer. My friend and I would need to make sure that we did not hold out to the public that we were somehow only one law firm. We would want our names to be different and have it clearly established that, although we are in the same building, we are not the same law firm. We would need to use our own malpractice insurance, letterhead, business cards, etc.
At the end of our discussion, we determined that an office sharing arrangement would probably be in our best interest. If we later felt more secure with our practices, it might turn out that we would want to develop a partnership. To be honest with you, I haven’t thought enough about why we might want to partner-up. Perhaps hiring an associate and sharing salary costs? I’ll put that one on the back burner for the moment.
Starting a law firm means making correct initial decisions about how your firm is going to survive and grow. An office-sharing arrangement can be a great way to save money at the beginning on law firm overhead. I’m always thinking about money and how to save it. Sharing an office is certainly a great way to do that. I’ll keep you posted on what my friend and I ultimately decide. Even if my friend doesn’t leave his firm, the same benefits of office sharing can be applied to any attorney in town.
Starting a Law Firm | Drafting the Legal Services Agreement
As I discussed in my previous post about withdrawing your attorney appearance, starting a law firm means that you are going to need to find paying clients and, after you find those clients, you are going to need them to sign a Legal Services Agreement.
When I began practicing, I didn’t have a good understanding of the necessity of a well drafted Legal Services Agreement. It can save your butt. It is very necessary and should be a part of your law firm’s forms files. You do have a legal forms file don’t you? (I will talk more about form files in another post.)
The main purpose of the Legal Services Agreement is to outline the rights and responsibilities of you and your clients. Furthermore, your law firm needs to have a Legal Services Agreement for purposes of legal malpractice protection. Your malpractice carrier will be good about reminding you of this.
There are also different kinds of agreements and you need to be familiar with all of them. I have used several different kinds of agreements. First is the hourly legal services agreement. Obviously, this one outlines an hourly fee arrangement. I used this agreement the majority of the time. Second, ethical rules also call for a mandatory contingency fee agreement in certain situations. I won’t discuss all of the situations in which a contingency fee agreement may be necessary. Read your jurisdiction’s ethical rules on when these are required. (As an aside, I recommend developing a legal niche practice so that you aren’t doing personal injury work and family law work interchangeably. There are different agreement for each arrangement and you should try and be very familiar with an agreement in the area of your practice).
The actual content of the document can vary, but, at the least, the Agreement should clearly define:
(1) who the client is and who you are. (this is important because you want to know who you are representing and the client needs to know that you are his/her lawyer)
(2) the scope of the legal representation (are you handling a divorce or are you handling a will contest?)
(3) the means of payment (includes your hourly rate and the general charging arrangement)
(4) the term (length) of the agreement (is it indefinite? does it end after trial or on appeal?)
(5) the means for withdrawal by the attorney if client is not complying OR if a conflict arises
(6) the client’s duties to the lawyer and law firm
(7) the lawyers duties to the client
(8) a non-guarantee of outcome provision (I like this one because it lets the client know that I am doing my best, but that I don’t guarantee any particular outcome)
(9) applicable law provisions
(10) any applicable jurisdiction specific protections (e.g.: can you assert an attorney’s lien for non-payment, etc.)
Those are the basics. Starting from the basics, you can (and should) then break down other necessaries depending on your law practice. Different language or clauses should be predicated on your particular practice areas.
Here is an example of my generic hourly fee agreement: AGREEMENT FOR LEGAL SERVICES
Starting a law firm means that you have to be careful of what clients you take. When you do take a client, be careful that you and your client understand the scope of the legal representation. Develop your own Legal Services Agreement that fulfills your law firm’s needs and change it depending on the scope of representation and the client you are taking on.
Starting a Law Firm | Bring it Strong or Don’t Bring it at All
When I first started practicing law, a great piece of advice I received early on was that, when filing pleadings and making arguments, you better be darn sure you are right and you better have the guts to follow through on your court filing. In other words, you have to bring it strong or don’t bring it at all. Or, as Shaq once said: “Don’t fake the funk on a nasty dunk.”
Filing weak pleadings results in weak cases. Lawyers have to know the law and have the confidence to enforce it in favor of their clients. Like it or not, it’s an adversarial system and you are your clients’ advocate. You better believe that the other side is going to bring it (or, at least you should expect them to.)
I suspect the adversarial nature of the legal system is why a lot of lawyers either leave the practice and/or suffer extreme stress and job fatigue. Starting a law firm and practicing law every day is not easy. It can be incredibly rewarding and often very fun, but it is not easy.
In my practice, I try to take good solid advice where I can find it. My example of this concept is the game of baseball. The baseball season is a long, drawn-out, competitive affair. There are many ups and downs. I find this to be a lot like a lawsuit – a long, sometimes painful struggle to win. So, a lot of managers and players in baseball talk about the mental makeup it takes to be an every-day ball player. You have to keep an even temper and always remember to be positive and keep your goals in mind. There are so many highs and lows that controlling your emotions is very important. If you get too high after a win you tend to miss the big picture. The same goes for a loss.
I try to be like a veteran baseball player – take the highs and lows as they come and keep a steady keel. Does it always work? No. Sometimes I want to tear my hair out. Sometimes I gloat over a nasty dunk. But, trust me, you will be a much happier person and a lawyer if you remember to keep a steady focus on the task at hand.
But, back to filing strong pleadings. To me, there is nothing worse than having to look back on a case where I failed to bring it. I have had several of them. I knew I needed to come strong, but for whatever reason, I didn’t. Afterward, I felt like I didn’t give it my best shot for the client. Maybe I was tired that day. Maybe I didn’t feel like I had the time. Those excuses stink and I can tell you that you will feel worse later if you realize you didn’t give your full effort. Your clients will also realize that you weren’t fighting for them like you should have. This results in dissatisfied clients and loss of income to your law firm. Both are bad things – especially when trying to build a law practice.
Starting a Law Firm | Learning From Our Founding Fathers
I like to imagine that starting a law firm is akin to a great, cosmic struggle for success, legitimacy, and the universal right to achieve. What better historical event could I use as an example of this struggle than the founding of our nation?
Ok, a little heavy-handed, I know. But, I was listening to an enlightening interview of the author David McCullough on the Charlie Rose show this weekend. If you do not know him, David McCullough is a well-decorated author of American historical fiction. To me, he is one of the great story-tellers of our national history. If you have not checked out any of his books, you should. In particular, I read his biography of John Adams several months ago and have continued to be struck by John Adams’ sheer determination to do what is just, honest, and right for his family and his country.
Perhaps you are wondering why this is being discussed on this blog. My answer: John Adams was a lawyer. Not only that, John Adams, from all accounts I have read, was an excellent lawyer. Among other feats, he successfully defended the English militia on a murder charge after the Boston Massacre. Furthermore, for the majority of his practicing career, he was a solo attorney – he started his own law firm.
In the interview, McCullough made a comment to Charlie Rose that, out of all his books, he may have been the most satisfied in writing the John Adams book because he was immersed in the lives of such remarkable and momentous people who drafted our Constitution and shaped our nation. His comment showed his appreciation for what these men and women were up against and what they managed to achieve. I find this comment akin to taking a leap of faith and starting your own law firm.
Additionally, many of the founders of our nation were lawyers. That fact is terribly cool. They were not only lawyers, but they were the kinds of lawyers that many of us aspire to be. Though flawed, these men were faced with a dire situation which required clear, concise thinking about difficult legal problems.
John Adams, apparently, also did not believe that all men were created equal – he only believed that all people were equal before the law. I agree with that. I also take inspiration from Adams’ efforts to do things his way. He disdained mob culture and following the leader. Instead, he was the leader. I agree with this.
Perhaps a little sentimental, but I find inspiration wherever I can. Starting a law firm is tough and it includes failing. But, through perseverance and being a nose-to-the grindstone leader, I know I can achieve what I want and so can you.
Starting a Law Firm | The Client Call
I haven’t talked much in this blog about how to actually answer a potential client phone call (assuming you have figured out how to get the phone to ring). Stated another way: How do you discuss a legal problem with a potential client whom you would like to hire you for your legal services? After all, starting a law firm means you have to get people to hire you to be their lawyer.
First and foremost, you owe the client a duty to be competent to answer their questions in a lawyerly manner. Competency is Rule Number 1 for a reason. Additionally, I hope you know that your discussion is confidential. If, in the middle of the phone call, you realize you can’t give competent legal advice, say so, and refer the person to another attorney or source that may be able to assist them.
Second, you owe a duty to the client to charge a reasonable rate which is determined by the legal market prices in your community and your level of experience. In other words, your quoted billable rate must be reasonable.
Assuming you are competent to handle the matter, you can feel free to listen to the legal problem and give legal advice. The question I often have in my practice is how long I need to listen and to what extent. After all, many people will try and pump you for free legal advice. Starting a successful law firm is not about giving free legal advice.
But, to some extent, you should be willing to give the client time to initially discuss their problem. The ultimate choice about how much time you give them is yours. In my experience, many attorney will do one of two things when a new client calls: (1) not answer the phone at all and simply ask the client to leave a message or have staff talk briefly with them or, (2) answer the phone, but only talk to the client briefly before telling them to schedule an appointment.
I don’t think the approaches listed above are necessarily wrong. In fact, I have done some variation of both at one time or another. However, my policy is to give EVERY caller time to explain their problem. I am not always perfect about it, but this is my goal.
Why is this my goal? Because clients are people and people want somebody to listen to them. People don’t want to schedule an appointment to have somebody listen to their problem. They want somebody to listen and understand right now. That is just human nature.
I have often told people that I feel more like a social worker or a psychiatrist, at times, than a lawyer. Maybe this is because I have taken on quite a few family law clients. If you start a law firm and don’t chose family law as a niche area, perhaps your experience or approach will be different. Still, I have found that clients – whether in the family law field or another legal field – want to talk about their problem. I believe that my initial obligation is to listen.
If you want to start a law firm, you need to know how to get clients to hire you and how to keep them. Doing this often means that you have to be really nice to people. If you can do that, I would bet that you are putting yourself far ahead of many other lawyers. My guess (although subjective and I have no real proof) is that attorneys often don’t treat people with a lot of respect. This is a big mistake.
Starting a law firm, means that you have to have people skills. If you don’t, I wish you luck. Me, I am going to continue to treat the client with the utmost respect, as if they are the boss, and with the belief that I am here to cater to their needs (within reason).
Starting a Law Firm | New Blog Name
In case anybody cares and gets confused, I have changed the name of my blog to Going Solo | how to start a law firm. The reason? I am not licensed in the State of Minnesota (yet) and I don’t want to make an inference of any kind that I am.
Minnesota Rules of Professional Conduct, in pertinent part, provide that:
RULE 5.5: UNAUTHORIZED PRACTICE OF LAW; MULTIJURISDICTIONAL
PRACTICE OF LAW
(a) A lawyer shall not practice law in a jurisdiction in violation of the regulation
of the legal profession in that jurisdiction, or assist another in doing so, except that a
lawyer admitted to practice in Minnesota does not violate this rule by conduct in
another jurisdiction that is permitted in Minnesota under Rule 5.5 (c) and (d) for
lawyers not admitted to practice in Minnesota.
(b) A lawyer who is not admitted to practice in this jurisdiction shall not:
(1) except as authorized by these rules or other law, establish an office or
other systematic and continuous presence in this jurisdiction for the practice of
law; or
(2) hold out to the public or otherwise represent that the lawyer is
admitted to practice law in this jurisdiction
. . .
I read that rule as being black-letter and being pretty clear. A blog is certainly public, and despite any disclaimers or other information in the blog, I could see the blog title being considered as a misrepresentation.
Serving as an example of how to practice law and how to blog in an ethical fashion is very important to me. I felt that the name of the blog could raise an unethical inference that I am licensed in Minnesota. Thus, the change. I am licensed in Indiana and have been running my own small law practice in Indiana, and I will be moving to Minnesota, but that isn’t good enough.
This post is interesting (at least to me) for several reasons: (1) it gives me an ability to discuss ethical blogging and (2) it gives me the opportunity to talk about advising a client when starting a law firm. After discussing this issue with my wife, I made the statement to her that if a client called me and asked for my legal advice on this situation, I would tell that person, without any doubt in my mind, that they were taking an unreasonable risk and, whether or not their situation resulted in an ethics problem, they should not even consider taking that risk. There is simply no need.
I did include a legal disclaimer in my blog that I am not licensed in Minnesota yet, but I doubt many people have read the disclaimer and I am not sure that it would be good enough. Also, in my opinion, if you read the blog, it is pretty clear that I am only licensed in Indiana. But, in my own law practice, I have often told clients that I don’t care how careful they have been – the law is simple and if you take the risk of violating a law, you can be hurt by that risk. So, to be safe, I have decided to change the name.
As any of the readers of this blog know, I am hoping to be licensed in Minnesota by the fall. I am sitting for the July, 2011 bar exam. Assuming I pass the exam and become licensed in Minnesota, this blog will go back to its original name. Until then, I will continue blogging about how to start a law firm under the Going Solo moniker.
Starting a Law Firm | Who Owns the Client File?
Whether leaving and old firm or moving to a new jurisdiction, when starting a law firm, you need to be cognizant of who owns the old client file. Also, from my review, you need to be cognizant of what jurisdiction you are in because, of course, the rules vary from state to state.
The first place to look is your state’s professional responsibility and/or ethics rules. Another good place to look for model answers is the American Bar Association (ABA). In particular, the ABA, in its “Materials and Client File Retention” page, quotes two model rules:
Model Rule 1.16(d) states:
“Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee that has not been earned. The lawyer may retain papers relating to the client to the extent permitted by other law.”
Model Code
DR 2-110(A)(2) provides that:
“In any event, a lawyer shall not withdraw from employment until he has taken reasonable steps to avoid foreseeable prejudice to the rights of his client, including giving due notice to his client, allowing time for employment of other counsel, delivering to the client all papers and property to which the client is entitled and complying with applicable laws and rules.”
To me the gist of the model rule does necessarily answer the question of who retains the client file. As lawyers we are paid to interpret. My interpretation is that, under the model rules, a lawyer must be concerned foremost with the client’s best interest and finishing the representation in a professional, competent, and agreeable manner which avoids any damage to the client. After that is done, who retains the client file is not so important – it is the work product that goes into creating that file which is of the most importance.
In Indiana, where I am licensed, the Rules of Professional Conduct are similar and do not specifically state who retains the client file. There are two rules specifically on point, Rule 1.15 and Rule 1.16.
Rule 1.15, entitled “Safekeeping Property”, in pertinent part, provides that:
(a) A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Funds shall be kept in a separate account maintained in the state where the lawyer’s office is situated, or elsewhere with the consent of the client or third person. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation.
Rule 1.16 states, in pertinent part that a lawyer may withdraw from representing a client if:
(1) withdrawal can be accomplished without material adverse effect on the interests of the client
However, to me, neither of these rules answer the question of who retains the client file. Is the client file client “property”. This gets me to start thinking of argument for and against either the lawyer or the client keeping the file. One argument in favor of the attorney owning the client file is that the attorney should have already made the entire file available to the client during the representation. I make it a practice of sending a client nearly everything I do so that (1) they know I’m working on their case and (2) the have a copy of everything already. Thus, the question may also be asked: What is “the client file”? Are there multiple client files? Are there different versions of the client file?
The ABA suggests that the client should always have originals of documents like Wills, Deeds, Contracts, etc. This seems obvious and I would hope the lawyers aren’t typically keeping originals of those sorts of documents. There is also some authority a lawyer retaining a client file as security for getting paid. I don’t necessarily recommend this practice, but, at least in Indiana, it is allowable under certain circumstances.
At the end of the day, I can’t necessarily tell you who owns the client file. The answer, like some many in the gray hued world of the law is: it depends. From my review of the applicable law in my state, and from reviewing the model law, the concern appears to be related more to competency and confidentiality than to actual possession. My advice, be clear with the client and ask them what they want to do.
Perhaps more importantly, I would suggest some form of electronic storage and putting the retention of the client file into your legal services agreement. That way there is no confusion Whether leaving a law firm or starting a law firm, you need to know your ethics and you need to know who gets the client file when the representation has ended.
Starting a Law Firm | Solo Lawyer Legal Research
Starting a law firm is all about gathering information and being aware of what other solos attorneys are doing. In that respect, it is very helpful to review a lot of different lawyer blogs to get information, new ideas on networking and marketing, and (for me) to know that there are other lawyers out there doing what I’m doing. I have a number of great blogs on my Google Reader list that I review daily. Sometimes the posts are not that great, but often I find some very helpful information on running my own practice.
In light of this, The Connected Lawyer had a great legal post about the use of public domain citations in Illinois. The gist of the change, as I understand it, is that the Illinois Supreme Court has adopted a public domain system of citation for appellate court cases in Illinois that have been filed on or after July 1, 2011. Rather than exclusively using the traditional court reporter citation with a year and page citation, the Illinois courts are now allowing the use of a public domain citation system. This is counter to what I would guess everybody learns in law school in the United States.
Ok, why does this matter? It matters because, in the view of Bryan Sims at The Connected Lawyer, and also in my view, the law should not be held in the hands of giant corporations – i.e.: Lexis Nexis or Westlaw (Thompson West). I would also guess that this is something that other states may start to change to. If one state does it, you can be sure that other states will take note. When I start a law firm in Minnesota, I hope Minnesota takes note.
Why does this matter to learning how to start a law firm? To me, it matters because a lot of solo lawyers cannot afford or, at the very least, don’t want to pay for expensive Westlaw and LexisNexis subscriptions. It cuts into overhead, something that all solos are keenly aware of. As a lot of other blogs have addressed, there are many other ways to conduct necessary legal research: Google Scholar, your state’s judicial and legislative websites, Findlaw, Cornell Law School website, the Library of Congress, Hieros Gamos, Public Legal, and many others. Are these websites as good as Lexis Nexis and Westlaw? No, not really. But, the law is the law and it can be found in places other than with big corporations. I will admit that I have difficulty sheperdizing cases with these free resources. Although, I do remember a reading somewhere that there is a way to sheperdize cases for free on the net. If anybody knows of a link, please post a comment here.
Learning how to start and run a law firm is difficult. There are so many different choices that must be made and a budget to stick to. Legal research is something I don’t want to have to think to hard about – I just want to be able to do it as quickly and as cost effectively as possible. Furthermore, I get irritated when I think about how the law is supposed to be accessible to everyone and yet that accessibility is greatly diminished due to the hording of it by two monopolistic corporations.