Experience as owners could be boon for small-firm practitioners

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Published on 4/20/09

The drumbeat of stories about lawyer and staff terminations at large corporate law firms has some sole and small-firm practitioners scratching their heads. These folks are accustomed to tough competitive conditions and have never felt "entitled" to six-figure salaries or bonuses.

The general reaction of many, often expressed on Listserv and in social media, is that the laid-off corporate lawyers will be fish out of water and will either need to find another big firm or go into a new line of work altogether.

With due respect to hard-working small-firm lawyers, it should be noted that all legal professionals swim in the same pond. Small firms may soon feel the splash of big- firm layoffs because it is likely that, for at least some of the newly terminated lawyers, the prospect of having their own firm will seem attractive.

Nearly 90 percent of the 1.1 million U.S. lawyers are sole practitioners or are in small firms, so the competition will intensify if these onetime big-firm lawyers open their own firms.

At their service

Service providers already see the opportunity. I recently learned of a marketing agency that is launching a discounted, fixed-price (at well below typical agency rates) turnkey-identity and marketing-planning package to help new law firms started by laid- off attorneys. This agency's goal is to offer cut-rate marketing service on the basics so that the new firms build enough business to turn to the agency for help with websites and brochures.

This development illustrates the old adage that wherever there is challenge, there is also opportunity. Small-firm lawyers are already experiencing economic pain as prospective clients put off wills, even divorces, for fear that they cannot afford them.

Certainly there is a great unmet need for lawyers to help clients who cannot afford expensive law firms. But to assume that laid-off corporate-firm attorneys will not be able to learn the competitive ropes is naïve at best, particularly when an oversupply of lawyers in small-firm practice becomes more of a reality.

Where small firms and solos may have a competitive advantage is in their immersion in the concept of ownership. That status means being the last person to receive financial benefit from the firm.

Staff and associates come first; vendors and suppliers come next; and then owners. It means that you are personally responsible for the debts and liabilities. It means that you lie awake at night wondering how to improve the efficiency and growth and profitability of the law firm.

This concept of ownership and the ownership responsibility is the only way to build a successful firm in today's competitive conditions.

Will the ownership mentality ingrained in small-firm lawyers be enough to ensure their survival against the new wave of competitors? Small-firm lawyers know that managing money is the number-one consideration for success. Practice needs should always be met first, and personal needs should be the minimum expense necessary to maintain a standard of living.

It's a difficult discipline to adopt, but it is one not often found at large corporate firms. This ownership mentality may be the small firm's salvation.

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