The Basics of Getting Paid - Part 2; But Nobody's Hiring Me

Face it right now, especially if you're a newbie/soon to be newbie, you're not going to get Michael Jackson (I know, he's dead), Mike Tyson, or the latest A-list Hollywood star divorce. You're not even going to get the B, C, or F-list divorces. Unless you know the person, they're going to go with [Insert Local Family, Criminal, or etc. Law Super-Attorney's Name Here]. The people you're going to serve are just like you: middle-class Americans, trying to make a decent living, and are now having problems.

Sometimes though, you'll find that even these decent middle-class Americans aren't hiring you, despite the fact you've quote 100 fees today. You might get discouraged, or you might start to think your fees are too high, and consider changing your rates. Unless you're charging $250 per hour, don't think about it! More especially, don't change your fees or cave to your doubts.

The worst thing you can do is start to believe you've mispriced your rates. The truth is, you're just like the other 90% of attorneys in this world who aren't getting the clients. Remember, clients have a variety of reasons for not hiring, and most likely, price isn't one of them. Good pricing makes the potential client truly evaluate their situation (check out my post here for a frank firm to client discussion about fees).

When you're not getting hired, it's time to reevaluate your sales pitch. What are you doing/saying? Quick, you have 60 seconds to sell your divorce/family law/bankruptcy/etc. services, what will you the caller? Have you even thought about your telephone pitch?

There's a great blog post by Jay Fleischman, titled, What if the Client Set the Legal Fee? The post is a candid look at fees and services. Mr. Fleischman, makes the point that "[v]alue must be built from the very first moment you begin to market your bankruptcy practice (or, for that matter, any legal niche). You need to stand in the client’s shoes and determine what it’s worth to them to get out of debt, and exactly what you can do to build up that value to a point where it matches or (ideally) exceeds the price tag associated with your services." I wholeheartedly agree.

I looked at the reasoning behind my "failures" and found that I didn't think I was giving the client enough information about what I would be doing to help them. When speaking with potential bankruptcy clients, I found I simply told them, "I'll help you file bankruptcy under chapter 7." No wonder I wasn't turning phone calls into clients. What exactly does that mean? And why does that justify my fees? Heck, anyone can file pro se and save themselves hundreds.

So, after this brief evaluation, I revised my pitch:

I'll help you file chapter 7 bankruptcy. This will involve meeting with you in person and talking on the phone at least 3 time to discuss your paperwork and financial information. I'll also be filing out the bankruptcy petition and compiling the financial data you've given me. This usually takes 1 day, or about 8 hours. When the petition is filed, we'll continue to talk, and I'll probably call you 2 or 3 more times to discuss simple issues that arise. We'll meet for the 341 meeting, which is a simple hearing before the bankruptcy discharge. All these services will be part of your [Insert fee amount here] fee. Of course, you're free to call or email at anytime with questions. When would you like to meet?

After discussing these things, I'm able to answer any questions and resolve any concerns with the client, before recommitting to the engagement meeting. The script, or something similar, takes about 60 seconds to recite, and has a powerful effect on people's actions.

I believe when you've carefully explained what value they're getting, this helps resolve a client's anxiety about paying your fee, and trusting your service.

Unlike a tangible product, judging the quality and value of services is difficult. Clients will not hire you for the task if they don't feel you can accomplish the job and get them the "justice" they deserve.

The Basics of Getting Paid - Part 1; How Much Should I Charge?

One of the biggest problems with being on your own is the ability to generate revenue. This is difficult regardless of your career field, but more especially in costly service fields, like law. With the challenge of new generating revenue, also comes the task of collecting the money before or after services are completed. I'm going to make a series (is 2 considered a series?) of blog posts dealing with the dirty issue of making money, because, face it, this business (or any) is about making money.

This first post will deal with some of the challenges you'll face in selling your services, and setting prices for your services. The second post will deal with collection matters, including the issue of whether you sue your client. If you have questions along the way, or would like me to talk specifics, please let me know.

How much should I charge?

The question that drives fear into every new solo's heart is, "how much do you charge?" This is especially true for recent graduates who hang their shingle. I remember when my first client confronted me with the question, and how my heart sank when I had to respond.

Sure, I'd talked to others about their fees and hourly rate, but without much else, I knew little about the market for new attorneys. Some friends I knew who worked at big firms boasted about being billed out at $250 per hour, that seemed extravagant to me though, especially when I knew most of these associates had little or no practical legal skills.

As I talked, many people offered the practical advice that I should bill $100 per hour, based on the number of decades in practice. For instance, since I had practiced law less than 1 decade, my hourly rate should be $100.

Finally, I settled on a slightly higher hourly rate that I felt confident could benefit me in two ways. First, the slightly higher rate would discourage "bargain seekers" from hiring me. In my experience, client seeking bargains can never (yes, I said never) appreciate the value of your services. Moreover, the bargain seeker will consistently challenge your decisions/suggestions, and most likely will make unreasonable demands to resolve the case. You will soon regret the lower hourly rate. You will find that a client who accepts your higher rate will become your ideal client. Believe this fact too, there's plenty of other attorneys who will take these clients, don't despair.

Second, a higher rate would allow me to adjust, my fees for the "pro bono" client, while still making enough to keep the doors open. Trust me when I tell you that you'll have plenty of opportunities to give away your services. Whether you offer discounts to friends/family/good clients, through genuine pro bono services, or to your "charity" clients (mine are kids), the opportunity to help someone will be there. What's more, these clients will appreciate your "discounts" much more than the others will.

What about flat fees?

I love flat-fees (or one fee for all services). They're the heart of my practice, and are especially valuable to clients.

The problem with the flat-fee billing method is that it's extremely difficult to "value price" your services, and account for specific, and often time consuming, nuances in cases. I found early on that it's a good idea to "bill" for everything you're doing on the flat fee case (I use QuickBooks Pro to tally time, mileage, and case expenses). This helps to give you a general idea of how "difficult" a case is, and provides a good reference point for future cases.

For instance, for a "simple" or uncontested divorce I charge $1,000. I arrived at the amount because I learned early that $500 and & $750 did not adequately compensate me for the amount of time I spent dealing with issues in the case. When I finished my first "simple" divorce (which I took for $500), I ended up making $5.75 per hour. Not even minimum wage!!

Granted, because this was my first divorce case, I cost myself more time by not knowing particular shortcuts. Moreover, because I "bill" for everything (time, postage, mileage, telephone calls, hourly casework), I increased my rates.

The important thing I learned though was that I needed to have more money to make the cases worth the time, effort and costs. Remember, you're in a business, despite the idealistic mantra your professors gave you. If you're not making money, you're not going to survive.

Anniversary

Just wanted to say, "Happy Anniversary" to me.

One year ago I opened the law firm, Absolute Legal Services, LLC. We've had some great success, and I'm generally proud of my achievements so far. I started as a litigation/bankruptcy/divorce firm, and have since added services in immigration and social security disability law.

Although there's some lean times, there's also some pretty exciting ones too. I am absolutely happy with my decision, and can't say I regret looking back on anything.

Cheers to another successful year!

I Love "PMS"

You must have Practice Management Software or PMS. This revises my previous opinion, wherein I waffled somewhat in fully recommending PMS for your firm.

Recently, I had the unpleasant experience of dealing with an issue outside of my legal work. I had to resolve the issue by examining my PMS for notes, memos, etc. By having quick and easy access to the information, I quickly resolved the issues and was able to focus fully on my legal work.

Again, MS Outlook is great for managing mundane items (like calendaring) and tasks (like finding contacts) (see here for my praises). However, if you're going to be serious about managing phone calls, tasks, calendaring, voice messages, documents, correspondence, emails, etc., you need a practice management system.

I've tried to use MS Outlook to keep track of client data, such as messages and communications. After awhile, and if the case grows complex, the information gets jumbled. Plus, you have to remember to notate the discussion in the "notes" section, or you'll forget or lose the conversation.

Sure, there are some similar restrictions and flaws with PMS, although I don't think they're as severe. I think it's a little easier because you're already reviewing the file information, and notations are just as easy. Moreover, because all of the information is in a centralized location, you're saving time by not having to open multiple folders to find the right documents.

Finally, and hopefully, if there's ever a need to "save your bacon", PMS may provide that one extra tidbit that your case file and it's 5,000,000 documents is missing.

Name Game

I want to rename and re-theme this blog. Right now it's "Legally Easy: Helping you discover a different perspective on the legal world." I'm not particularly opposed to the Legally Easy name, although the theme or slogan is somewhat less-than-desirable.

I'd like to enlist your suggestions in developing a new name/theme (or whether it's necessary). Feel free to comment or email me your suggestions. I plan to offer a small reward ($25 gift certificate to a national restaurant chain) for the best suggestion. I promise not to use your email for anything other than notifying you if you're a winner.

Ready...set...GO!

The Power of Your Practice

Basically, two companies compete for your business in the note-taking/storage field: Microsoft and Evernote.

Microsoft offers an excellent utility, which I used all through law school, called OneNote. The main idea of the program is that you can clip and paste different stories, articles, pieces of research, etc., into the program, then use those "notebooks" to organize the information you need. My biggest problem with the program is that it ran slow (not dreadful), and that it relied on me to make sure accurate backups were in place to protect my information (never a problem for me, but I know several people who lost their entire semester's worth of notes because of a computer glitch.)

Enter Evernote, an online application that functions much like it's more costly counterpart. I LOVE EVERNOTE! I use it daily in my practice to organize materials, trial notebooks, etc. The greatest feature about Evernote is the price: FREE (although paid upgrades with more features are available). Even the paid or "premium" Evernote service is arguably more affordable and cost-effective than MS OneNote. At $45 per year (versus $99 for OneNote full version), Evernote is bound to save you costs & the time consuming hassles of having to manage your own information.

Evernote features an iPhone and BlackBerry app, a FireFox plugin, and a desktop program. Together, these provide more versatility to the program than it's competitor, OneNote. Where OneNote is designed to function more in the TablePC environment, Evernote's design encourages the familiar desktop/word processing atmosphere.

Using the program to improve your practice is like using any software. The important part is to find the niche for you. I like using the program when I'm researching case law, organizing trial notebooks, and managing the everyday functions of my law practice.

Evernote allows you to create "notebooks" that handle the subjects you'd like to manage. For each case  usually trial or litigation) I'm working on, I create a client notebook. From there, any notes regarding strategy, research, or special information gets placed into the client notebook. I do not use Evernote to manage the daily features of the practice or client matter, rather, Evernote is a tool to organize the big picture. The program is particularly useful in mapping issues and organizing thoughts. I've used it multiple times to organize and prepare for a deposition and trial. The utilities are endless!

Finally, some are critical about the confidentiality or risk of "cloud computing." For me, this isn't a big deal.  I don't store confidential information online, and I like to believe that most judges will recognize the benefits of these systems, and rule that any information released would still be protected by the attorney-client privilege. Maybe that's my naivete, but arguably, a cyber-attack or hacking doesn't result in losing the privilege.

That being said, I don't believe that Evernote's Terms of Service would cause a heightened concern. Unlike other providers who may claim an interest in your materials, Evernote doesn't, at least to a relevant extent of sharing the information. Evernote's TOS provides, "you retain all of the rights you had in your Content before you submitted it. In fact, unless you elect to enable others to view or have access to the Content you submit to the Service, no one else should see it without your consent." Concern averted. If you can see anything I'm missing, please let me know.

P.S.: I wrote here about using Evernote to build a Practice Manual, in case you're interested.

You ask, I answer

I don't consider myself an expert by any means. However, occasionally I get a variety of emails regarding my decision to go solo. Most of these I'll answer with a simple statement that, "I'm just some guy who got a lucky break, and am now doing what I love."

 

Most of the people asking questions are 3rd year law students who have some considerations to make. One of the most frequent concerns that questioners have is regarding financing. The question invariably goes, "how do you get money?" This is a legitimate concern, and if I knew the answer, I'd hopefully be selling my secrets somewhere else.

While I don't think there's a "magic pill" to calm the financial worries, I think there's a couple different things to ease your worries:

1. Don't be afraid to work from home.  While I'm not a fan of this option for new lawyers, I think it's a viable necessity if you're going to save money. It's harder to make a profit if you're always running a deficit each month.
2. Minimize your overhead. You're going to be tempted to buy flashing products, services, etc., that you think are cool. The problem with a lot of these products is that you're not getting any value without having a lot of expenses. My "minimal" materials are: laptop, cell phone, laser printer/scanner/fax, word processing software, practice management software and Adobe Acrobat Professional. There's others who will argue for more or less (online fax service), but you can get by with these items. Also, using free services like Google Docs can limit your overall expenses. Finally, get a Google Voice number to give you flexibility.
3. Get out and Meet People. There's nothing better than hearing, "I got your number from . . ." The more people you're working with and meeting, the more you're going to improve your financial situation.
   
4. Work Hard. It's your financial future. If you're screwing around and procrastinating, you're not going to survive. PERIOD. Solo practice requires that you make work when you're working. I've seen a couple of attorneys fail because they weren't willing to work.
5. Hard Work Breeds Success. You should absolutely worry less knowing you're in charge. You are going to make yourself successful if you work hard and have a trustworthy disposition.
6. Don't Be Afraid to Seek a Loan. Sometimes the money just doesn't come fast enough. Use some downtime to develop a well-planned business proposal and seek some outside funds. I've already felt this was a last option because of the risk. If you're not making money now, it's hard to add one more expense. However, occasionally by adding some cash inflow you can develop leads and other sources. Don't go overboard!! I'd strongly recommend that you don't get a loan greater than $10,000.
7. Make Yourself a "Specialist" in a Cash-heavy Practice-area. When I entered the business, I quickly became an "expert" in child custody and other family law areas. These practices often paid cash (something that always needed), and I always got an up-front payment. My thought was that I could afford to throw time away, but if I couldn't keep the doors open, the amount of good I was doing wasn't worth squat. Luckily, I priced well, and was able to get the jobs done without much lost time. One other good thing was that I could get an estimate of the value of my services. If I could determine or estimate a time frame, that would make future pricing easier and more profitable.
   

 I love working for myself. Each day I'm excited to go into the office an accomplish everything. I'm still concerned daily about the financial situation, but it's a great motivating factor to work hard and give excellent service.

 

If you're looking at making the plunge, make some careful examinations, then don't ever look back (almost).

Save some money, get GV now!

I love Google. There, I said it. I'm in a passionate affair with all of the lovely features of Google.

Most recently I discovered Google Voice. This revolutionary service offers you a full-featured answering service, for none of the price. I just changed my office number to my GV number, and I LOVE it!

Here are my favorite features:

1. Transcriptions of voice messages
2. Downloading audio messages to specific client files
3. Saving audio email messages to specific client files
4. Being able to answer calls
5. A reliable call log of all phone numbers (inbound and outbound)
6. Ability to call from GV
   
7. All this for FREE!!!

GV is helping to expand my practice with its wonderful features. I'm not sure how this would work for a well-established practice, but since my practice isn't well-established, I was able to utilize the service for a small investment. My biggest cost was ordering new business cards and sending out notice letters to the clients and other contacts who don't use email.

If you're starting out, GV is a great option. It'll take a bit to get your number/invite, so GET GOING!!! GV is just one of the multitude of programs I use on a daily basis.

Here's a simple list of my daily programs:

1. Google Reader
2. Goog-411
3. iGoogle
4. Google Docs
5. GV
6. Gmail
7. Google Apps
   

Quick Tip

When you're a new lawyer, you're bound to screw up. It doesn't matter whether you work for the world's biggest law firm, or whether you're working on your own. There is just too much to know, and simple things get overlooked. Law school teaches you to think like a lawyer (but there's even an argument against that), while the actual daily grind is much different.

I received two pieces of advice when I first began practicing that have been more valuable than anything else I learned in law school. First, don't worry about making mistakes. There's very rarely an occasion where a mistake is going to be detrimental (statutes of limitations, deadlines, etc., being most important). Although most of the "stuffy" and older attorneys don't like to admit it, they probably did the exact same thing 30 or 15, or 3 years ago. While they're outwardly mocking you, they do have some sense of compassion. It's like that bully on the playground scenario: the kid mocking is probably the one most familiar with the problem.

Second, if you do screw up, don't do it again. People tolerate one innocent act, any more than that is just ignorance and stupidity. Do it too many times and you'll be labeled and your reputation will suffer. Again, there's a reason why some of the kids on the playground took more abuse than other, or why you keep getting mad at your kid for tracking mud into the house. Quite simply, we'll let one mistake slide, but we have troubles allowing more.

The best way to combat this is to create a "how-to" manual. Every time you complete a case or learn something new about the practice of law, you should write the method or rule down. For instance, I once handled a garnishment challenge where I claimed an exemption for my client. Not know true protocol (it was my 1st), I neglected to provide an income calculation and an expense list highlighting my client's burdens. The judge was kind enough not to ream me out there at the bench, although we wasted an additional 15 minutes discussing the client's income. Straight after the hearing I went to my office, pulled out my manual, and wrote: "Judge X requires income calculations for each claim for exemption." and  "DO NOT PRESENT A CLAIM FOR EXEMPTION WITHOUT DOING SOME BASIC MONTHLY CALCULATIONS. Here are the things you must calculate: (list of items)."

Since you'll only handle some cases very infrequently, or appear before some particular judge in some small county, it's nice to have this file to refer to. Be aware that since it's your "practice manual", you can add whatever information you'd like. However, I maintain one rule: never speak poorly about someone, no matter what (I leave that for my other "black book").

Remember too, having this book makes running your office (or practicing with a firm), much easier. Be sure to share the book with associates and staff. This will help create continuity within your firm, and allow you to build your procedures manual.

Finally, one consideration you may make is to utilize online services to manage your practice manual. I started building a MS Word document, but I disliked the lack of portability. Since I purchased an iPod Touch, I've started using Evernote. The program allows you to manage a tremendous amount of information and sync it among multiple computers. I like the handy iPhone app that can be used offline, and synced with the Evernote server when you're back online. 

Evernote is great for other things too. Check it out if you're not already using it.

Pro Bono Attorneys

The ABA's Model Rule 6.1 of the Rules of Professional Responsibility urges attorneys to strive to donate a minimum of 50 hours of pro bono service to community members. States have adopted similar measures.

There has been substantial argument over the necessity of this rule, and it's effect on small firm and solo practitioners. Some bloggers have commented that pro bono service could inevitably lead to your demise as a solo or small firm practitioner (see here and here). More especially, mandatory pro bono service arguably has a greater impact on the solo or small practitioner because those individuals have more flexibility to make decisions to render pro bono service. I think this is certainly true.

An "aspirational" rule can harm the solo or small firm attorney because the attorney already discounts fees or in some cases, provides services at no charge. In my practice, I find that there is a high percentage of tasks wherein the client receives discounted or pro bono service. Moreover, I'm actively involved in the Oklahoma Lawyers for Children program, which assigns lawyers to represent deprived children in state court. In fact, I currently offered legal representation to an individual if they'd agree to cover court costs and other fees.

Thankfully, Oklahoma has a rather robust rule regarding pro bono service. The rule does not mandate any hourly requirements. Rather, the rule encourages the attorney to offer reduced fee or free legal services, improve the community through unpaid service, and financially support legal aid-type organizations.

I like Oklahoma's rule because I think it puts reasonable demands on attorneys for providing service according to their means and abilities.

I'd like to hear your views on the issue, so please comment below.