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Are You Ready to Fly Solo?
The highly publicized troubles of large corporate firms make the prospect of having their own firm seem more attractive to many young or newly unemployed lawyers. But nearly 90% of the 1.1 million U.S. lawyers are solos or in small firms, so the competition is intense. An old economics bromide holds that, "whenever there is change, there is opportunity." Clearly, there is tremendous change currently, so there also is tremendous opportunity now to start a new business. However, you must understand the business and economic realities that are involved.
Solo lawyers need all the traits of an entrepreneur: motivation, acceptance of risk, resiliency, commitment, persistence. But they also need (and often do not have) adequate capital. It's easiest to start a new solo practice for those legal specialties where capital requirements are less, where it's easier to reach prospective clients who have more urgent immediate and personal needs and are less concerned about the team behind you. Practice areas that meet these parameters are where "the rubber meets the road," areas such as personal injury, family law, bankruptcy, immigration, personal real estate and the like.
Don't assume you'll immediately make money from such clients. Even if you do work for them in your first few weeks, the national average is 120 days between when a law firm sends out an invoice and when it is paid. For that reason alone, having a financial reserve helps ease the angst of starting your practice. The ideal number would be a minimum of six months of living expenses, and preferably a year.
Managing money is your number one consideration for success in a new firm. Practice needs should always be met first, and personal needs should be the minimum expense necessary to maintain a standard of living. The one essential is that your new law firm should not be a bank for clients. When you bill clients, you are extending them credit. Lax collections mean you need more cash to stay in business while waiting for clients to pay. The new firm that stays on top of receivables will have the cash to survive and grow.
Needless to say, lawyers just out of law school—or just out of a megafirm—often have little practical feel for such issues, whether that includes training in effective client service and law practice management techniques, or basic knowledge about the operation of the firm as a business. Many such lawyers feel they have neither an efficient nor an effective way to learn how to build a better practice that better serves clients.
If you feel that way, I urge you to sign up for and participate in our LawBiz Forum discussion group
and to review the VidCasts and other resources at lawbiz.com. You'll get practical insights and useful advice that will make the prospect of flying solo less frightening, and more rewarding.
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Following the worst economic crisis since the Great
Depression, and facing a sea change in clients' demands
and expectations, law firms must respond and adapt
quickly and effectively. Law firms must choose the kind of
law practice they will be; the marketing and business
development tactics they will use; the overhead that is
critical to their functioning; how to price, bill and collect
for services; and how to manage the cash flow cycle.
Success lies in identifying and capturing the right kinds of
clients, providing the services those clients need in ways
that add value, and ensuring prompt payment and the
ability to grow profits. This book, based on the
experiences of Ed and his clients over 20 years of
coaching and consulting, provides the keys to
successfully thriving in the new era.
Available for Pre-Sale
Ships in February 2010
Pre-Sale Price: $99
Regular Price: $120
OFFER CODE: 622510F89667
Call or Order Online at:
1-800-644-5009
west.thomson.com
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Personal Commentary
In driving the freeway the other day, I noticed a new phenomenon for Los
Angeles: Drivers seemed to be more mellow. I don't know if it's because
we're all tired of so much rain without interruption and are driving more
slowly or whether it's because many fewer people have jobs and thus nowhere to go.
Unrelated to this, my phone began to ring off the hook. More lawyers want me
to coach them to greater success. It seems that the panic we felt in 2009
has faded and reality has set in: We must look at our law practices in a
different light (from collection efforts, practice development, time
management, client selection, and all the other aspects of law practice) in
order to grow and thrive in this new economic world. And last week's news
said that our economy has grown more than at any time in the last 6 years.
Does this mean we're back to "normal?" Hardly. Does it mean that there may
be new opportunity in today's economy? I think so. As noted elsewhere, where
there is change, we will see opportunity. Where in your world is the opportunity for you?
Look again and seize the opportunities.
Best wishes,
Ed Poll
lawbiz.com
lawbizblog.com
www.LawBizForum.com
800-837-5880
Please use the URL below to link to this issue:
www.lawbiz.com/nlimages/tip-2-2-10.html
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What Readers Are Saying...
"No matter how you slice it, there is
no substitute for wisdom and
experience. Ed Poll has
demonstrated both in this eyeopening
book about the essential
elements of running a profitable law
practice. He provides practical
wisdom along with simple ways to
adopt and incorporate best practices
for each. After explaining the pros
and cons of every decision, he makes
recommendations and provides
useful guides disguised as key
principles. Buy the book so you too
can access Ed's wisdom and
experience. It's worth much more
than the investment."
STEWART L. LEVINE. ESQ.,
FOUNDER, RESOLUTIONWORKS
AUTHOR, GETTING TO RESOLUTION;
THE BOOK OF AGREEMENT AND
COLLABORATION 2.0
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