A few months back at my beat at Above the Law, I posed this question: Why Do Low Bono Work When You Can Start Your Own Non-Profit?.  After all, if new lawyers are going to be offering discount rates, they might as well run the show and gain the advantage of being the boss, plus the opportunity to take advantage of  loan forgiveness programs available to lawyers who work for non-profits.

Curious about how this business model might work in practice? Look no further than Open Legal Services (OLS), an innovative Utah-based non-profit law firm started by relatively new lawyers and recently profiled in The Atlantic. OLS charges sliding scale legal fees ranging from $50 to $135/hour. And while the rates are low, as a non-profit, OLS pays less in tax, can plus its lawyers are eligible for loan forgiveness after ten years – but as a private, non-government funded entity, OLS also avoids various bureaucratic reporting and record-keeping requirements. 

MyShingle is pleased to host this guest post by Roy Ginsburg. Other posts authored by Roy at MyShingle are available here

The most common exit strategies for retiring solo practitioners and small law firm owners typically include recruiting a successor, merging with another law firm, or selling the practice.  All of these options have advantages and disadvantages.

However, there’s one strategy that is rarely considered, though it may make the most sense in terms of the retiring lawyer’s financial and personal well-being. That strategy is downsizing.

It’s a rather simple concept, and works well for both solo practitioners and small law firm owners. In a nutshell, the attorney takes fewer cases and works less while reducing overhead expenses.

Downsizing works well for a number of reasons. First, I rarely meet a lawyer who, when contemplating retirement, wants to quit the practice of law cold turkey. It’s difficult to go straight from being a full-time practicing lawyer to someone whose primary focus is their golf handicap. Many attorneys want to wind down over a few years and gradually ease into full-time retirement. Gradually reducing one’s caseload accomplishes this objective.

Second, when contemplating retirement, many lawyers get nervous about depending upon only Social Security benefits and their IRAs to fund their retirement lifestyles. Downsizing can free up time to take those vacations you always wanted to go on, while still bringing in income to fund them.

Here’s how it works.

In theory, MOOCs — massive online open courses — sound too good to be true.  Classes are available on any topic – from learning a new language or computer coding or even how to start a law firm. Even better, most MOOCs are free (or inexpensive) and open to anyone with an Internet connection. Yet in spite of these enormous advantages, just ten percent of MOOC registrants complete their courses, reports Harman Singh at Beta Boston.

The reason for these high dropout rates? Singh suggests that lack of student-teacher engagement is to blame:
There are no live instructors to help facilitate the classes, lectures, or content. There is also no straight-and-narrow path from beginning-to-end and the format does not encourage the exchange of different thoughts and ideas among learners. The lack of live instructor involvement also means no follow-up with the student, or any assurance along the way that the student’s learning trajectory is heading in the right direction. At the course’s conclusion, only the learner can determine if he or she was successful.
Singh also offers a solution:
The modern MOOC — without live and interactive teacher engagement — is essentially an Internet version of a book. That said, there is tremendous potential for the MOOC to evolve in a major way. To reduce dropout rates, the MOOC must be structured around live teacher engagement.

As the old adage goes, birds of a feather flock together. But does that mean that lawyers of certain feathers – whether it’s a gender, race, nationality or sexual preference – should flout them to attract clients of similar plumage?

This question came to mind while reading this Gina Passarella’s Pittsburgh-Post Gazette piece about Pennsylvania law firms gearing up to serve the LGBT community now that the state’s ban on same-sex marriage has been overturned. Naturally, given the potential new business opportunities created by the new policies, there’s a concern that some law firms will be tempted to add LGBT to their list of practice areas to attract LGBT clients — even though they aren’t necessarily familiar with the legal issues or sensitive to the LGBT community’s needs and concerns.

That critique is fair enough, but small firm attorney Angela Giampolo, who’s also president of Gay and Lesbian Lawyers of Philadelphia suggests that firms ought to tread cautiously on to LGBT turf. From the article:
 Aside from cultural sensitivity is the fierce loyalty the LGBT community has when exercising its purchasing power, said Angela Giampolo of Giampolo Law Group and president of Gay and Lesbian Lawyers of Philadelphia.

“I want a gay martini served to me by a gay guy at a gay bar surrounded by gay people,” Ms. Giampolo said of her purchasing preferences. “Italians go to Italians, Jews go to Jews and pink dollars go to pink people.”
Giampolo’s observation is nothing new.  After all, many clients do seek out lawyers who share the same background. But should lawyers do the same?  That is, should lawyers actively promoting their gender, nationality, race or preference as a unique selling proposition, suggesting that these characteristics confer a level of understanding of the issues and concerns faced by similarly situated prospective clients? 

A long time ago in Internet years, I wrote that solos and smalls must come up with ways to diversify their services. That doesn’t mean having cheap rates for certain clients and full fees for others, but rather developing different revenue streams to ensure that cash is coming through the door.

Back in 2008, the cloud was in its nascency and social media was just gaining traction. Fast forward, and we have other developments – like the internet of things that, according to this Harvard Business Review blog post is changing how non-legal businesses think about their business model.

From the article:

Be That Lawyer: Niche Practice for Lawyers from Carolyn Elefant
 

I’ve presented and written about the benefits of niche practice for solos on numerous occasions. It’s not a particularly original concept –many, many, many, others have covered this topic as well. In fact, the value of niche practice seems to be one lesson of solo practice where there’s general agreement.

Not only that, but there’s always new evidence offering further corroboration. Exhibit A – this article about a pair of young solos in Ontario, Canada who decided to focus their generic small business practices on serving dentists. Given that there are only 9200 dentists in Ontario, that particular niche may have seemed risky but it’s paying off. Year two into the specialty, Michael Carabash and David Mayzel have a client roster of around 100, with enough work to necessitate a hiring an associate.

Even though dentists are a small group, they’re a smart niche for a couple of reasons. First, dentists understand the importance of legal services and have enough revenue to pay for them. Second – and while I don’t know for sure, my guess is that dentists are somewhat of an underserved markets, with most lawyers more focused on doctors. Third, legal issues related to dentists are highly specialized so once you gain expertise, there’s little competition.

Legend has it that Southwest Airlines started with a business plan sketched on the back of a cocktail napkin up by founders Herb Kelleher and Rollin King back in the mid-1960s.   Back then, the federal government regulated airline rates, keeping prices so high that only the wealthy could afford to fly.  Kelleher and King wanted to make flying cheaper but in order to slash prices, they needed to circumvent the federal caps. So they created an airline that flew only within the state.  By the time deregulation rolled around in 1978, Southwest already had a well-developed system for beating the competition on price:

They strategically enter regions by purchasing terminal space in airports that offer it for less. They then steal the ticket bookings away from their competitors with much lower fares. Southwest flies “point to point”, unlike the hub-and spoke model of most other airlines. They also fly only one plane, the Boeing 737, enabling their pilots to fly any plane at any time. They serve no meals, only snacks. They charge no fees to change tickets and have no assigned seats.

Southwest is often used as an example of a successful business that started out without an extensive plan – a lesson now embraced by many startups. But Southwest teaches another far more important lesson for solos and smalls practicing in this evolutionary time in the legal profession:  the importance of skating where the puck is going, not where it has been.

Although Southwest focused the initial iteration of its low-cost airline model on regional markets to avoid federal price caps, that couldn’t have been its strategy for the long haul. Instead, Southwest bet that the industry would deregulate – and when it did, Southwest’s already-well honed Texas prototype would give it an enormous over competitors. Southwest bet right.   

This isn’t a solo story per se, but one with some lessons – a reminder that the perfect lawyer for the job or the client isn’t always the one with the biggest firm or the stellar credentials of the fanciest offices.

From what I can tell from her LinkedIn profile, Sarah Feingold  had positions typical of a law firm grad from a pretty good, but not Top Ten law school: a job as a legal journalist, then an associate-ship at a small regional law firm. But today, Feingold has one of the most coveted positions in the legal profession as the first in-house counsel to a successful and now longstanding start-up, Etsy.

So how did Feingold nab this position? Easy — she was the perfect lawyer — indeed, the only lawyer right for the job.  Turns out, Feingold herself is a jeweler and metalsmith who comes from a family of artists so she had a natural interest in learning about copyright protections for her work. During law school, Feingold authored an ebook on copyright for artists and when Etsy launched, she used the site to sell her jewelry. At one point, she reached out to the Etsy customer support team and got in touch with Etsy’s founder. When Feingold discovered that Etsy did not have an in-house attorney, she booked a flight to New York, notified the founder that she was coming to town and made the pitch to be hired.

These days, most legal regulators are pre-occupied with the question of whether lawyers may ethically move files to the cloud rather than whether they must. That’s not so in the medical profession, where the Affordable Care Act mandates the use of electronic medical records and patient portals which will presumably be implemented through cloud-based platforms.

But at least one solo doctor is complaining about the burdens imposed on small practitioners by an electronic records requirement. Brietbart (I know, consider the source…) reports that a solo physician in Pennsylvania, Francis Brescia is facing fines for non-compliance with ACA requirements, after a company he hired back in 2012 to convert his files went into bankruptcy and lost most of his records. Brescia warned that the ACA regulations impact small practices the hardest – and that they could face extinction, as a result. “We’re dinosaurs, we’re not going to be here in 10 years,” Brescia says. “You’re going to have nurse practitioners and PAs taking care of the public..”

What Brescia doesn’t realize, however, is that portals and electronic records could bring his practice into the 21st century and enable it to survive rather than  the way of the mastodon. By providing a way for patients to view files or get in touch no matter where they may be, Brescia would make his medical expertise more accessible and affordable to his patients and by doing so, could compete more effectively with nurse practitioners.

But the competitive advantages of cloud technology aren’t the point of this post. Instead, the Breitbart  piece made me wonder:  what would happen if just as in the medical profession, lawyers were required to convert all client files to digital format and store them in the cloud where they could be accessed by patients through portals? Could solos and smalls accomplish transition to electronic document management seamlessly – or would they find themselves struggling like Brescia? Would non-legal professionals such as paralegals and other assistants have the skills and training to support lawyers operating in the cloud? Would today’s cloud-based law practice management providers have the capability to ramp up from, say, 10,000 users to hundreds of thousands while still retaining quality control?   I’m not so sure. [Note – that’s not intended to be a slight to any of the cloud practice management companies – but if all of the over a half million solo and small law firms were forced into the cloud, that would be an enormous bump in users]. 

I’m back from what has become a more than a month long hiatus from blogging. I last posted on June 11, a week before departing for a two week vacation on June 18. Since then, a varied band of solos stepped up as guest bloggers who’ve held down the fort through last week.

Turning over the keys to my blog, as Scott Greenfield put it is new for me – although sharing this space was part of the original concept of MyShingle. Back when I launched in the dark ages of 2002, I hoped to publish personalized accounts by lawyers starting or practicing solo but had few takers since back then, hardly anyone understood what blogging was (even Kevin O’Keefe  hadn’t yet arrived on the scene to teach them).  Within a couple of years, blogging went mainstream and lawyers who wanted to blog about solo practice didn’t need my platform; they could simply start their own. Of course, many lawyers underestimated the amount of time involved in blogging the solo experience or perhaps found the daily grind about writing about trust accounts and complaining clients and marketing, marketing, marketing deathly dull. Whatever the reason, many of the solo bloggers who comprised the tipping point  that I observed back in 2005 are no longer. And while other practicing solo/small lawyers have taken their place in documenting the solo experience – the  Fishtown boys or Josh Camson or Nutmeg Lawyer, for the most part, stand-alone solo blogs are dead. They’re not sustainable.