Risk Takers: Leaving the Big Firm Life
LAW PRACTICE MANAGEMENT | JUNE 1ST, 2002 | BY CHRISTOPHER T. HURLEY
Taking Control: Thinking of going on your own? How-tos for getting your new practice off the ground.
By Christopher T. Hurley
Ten years ago, I left the security and comfort of a large firm job at Baker & McKenzie to start my own plaintiff’s personal injury firm. I was 31 years old, and my wife and I had three kids in diapers and an insignificant amount of capital in the bank. Having all the amenities of big firm life and a growing family, what compelled me to take a leap of faith and fly solo? There was nothing especially wrong with my practice situation at that time. Rather, I was motivated by visions of my future – and my desire to control it.
Should I Stay, or Should I Go? Realistic Risks and Rewards
When I weighted the motivations for staying against the risks of leaving, I concluded that staying at a big firm was not risk free, either. At all firms, the partners with real power are the ones who control their own books of business. Partners without business can always be replaced – an occurrence that in recent years has not been uncommon.
So, what were my prospects for developing my own business at the firm? It seemed to me that in a big firm, it would depend too much on luck. Many of the partners with important clients inherit those clients from retiring partners. Moreover, for basic economic reasons big firms often frown on taking smaller cases that are more likely to come to young lawyers. Conflicts of interest also can preclude young lawyers from bringing in a new client. Often the firm already represents a client with opposing interests. Lastly, clients that opt for a large firm usually want a senior partners to be responsible for their matters. I considered waking up at age 50 in a big firm without my own business and thought such a risk was unacceptable.
When I looked at the risks involved in going on my own, I, of course, considered the possibility of my solo practice failing. But the worst-case scenario was that, if I failed, I could find another job and be the wiser for my experience. Since I had already successfully tried a substantial number of cases, I knew that I could always go back to work for someone else. I knew that my career and my young family would survive.
What pushed me to take the plunge, though, was the fear that if I didn’t leave soon, it would be financially impossible to leave later. And I would spend the rest of my life regretting my choice. I liked my job and the people with whom I worked – but I was driven to be my own boss, to have complete control of my life and my future. I was willing to take the risks to gain that control.
All By Myself: Used Furniture and No Window
Once I set up my practice, I quickly discovered that being my own boss meant, at least initially, certain sacrifices. In big firms, lawyers are given everything they need to support their practices. At Baker & McKenzie, we had spacious offices with a view, secretaries, paralegals, a service department, state-of-the-art computer systems, copy machines and a complete law library with knowledgeable librarians.
As a solo, there would be no such pampering. As a way to share expenses, I rented office space in a suite of lawyers. On my first day out, I had a small one-room office, with no window, no staff, a borrowed computer, some secondhand furniture and a legal pad. I had to run my own errands, buy my own stamps, pay my own bills and do my photocopying at Kinko’s. I came from a place where I was expected to do one thing: practice law. Now I had to run my practice and be a small businessman, too. Fortunately, I did have business to conduct.
Building Business: Lawyers Are the Best Source
In the beginning, I received a large number of leads from my old firm, which underscores the importance of leaving on good terms. I also networked with lawyers at the bar association to gain new leads. By talking to friends, I was further able to expand my referral base. I even approached lawyers with similar specialties who were overloaded with work. I joined many cases that were near trial because the referring lawyer did not have the time. Most of my cases have come from referrals – and the best referrers are other lawyers.
By joining a shared office, I was also able to benefit from immediate cross-referrals among the lawyers in the suite. I had determinedly found an office where the other tenants had complementary practices so I could encourage referrals with some referrals of my own. I offered to do hourly work for the busier site occupants. As the lone trial lawyer in the office, I was able to take depositions and assist with court appearances for a reasonable hourly rate.
Today, I have developed the business that seemed so uncertain with my old firm. And I now have two associates.
Tips for a Smooth Flight
Running a solo or small practice is no different from running any small business. Making sound decisions means you need to understand the potential risks and returns before you invest your time and capital. The same is true of the decision to go on your own in the first place. If you find that the risks-returns equation sums to a thumbs-up for you, here are practical suggestions to get your practice up and off the ground.
Plan for the unexpected. It is important to have a business plan, but it is sometimes difficult to project revenues and cash flow, especially when you start out. For this reason, I developed a shorter-term business plan, and I’ve always prepared the best I can for the unknown by saving religiously.
Resist adding overhead as long as you can. For example, when I started, I shared space with other lawyers. This was a great way to share expenses (and, of course, to gain referrals).
Serve your clients. If you treat clients with the respect they deserve, they will come back and bring their friends, too. Return your clients’ calls promptly, offer to meet with them, and keep them informed regularly.
Don’t accept every client that comes through the door. When you have a gut feeling that a prospective client is going to be trouble, follow your instincts and decline representation. I once failed to listen to this advice and lived to regret it.
Maintain integrity. Decide to hold yourself to the highest standard by resolving all doubts and gray areas in favor of your clients.
Make sure people know your name and what you do. Everyone you meet is a potential referral source. Explain your practice and specialties to them. Offer to do hourly work for lawyers with excess caseloads.
Automate your case management. Use practice software to track deadlines and statutes of limitations. My office uses ABACUS and we manage more than 250 matters without a problem.
Computerize your accounting and bill paying. My office uses QuickBooks Pro, and it greatly simplifies bill paying and tax filing.
Do your own hiring. My one experience using a headhunter was an expensive disaster. Hold out for good people and treat them well. Poorly paid and untrained staff will always cost you more than you will save.
Set goals for yourself and your staff. If you have employees who aren’t meeting their goals, then advise them of the problem. If they make no improvement within a reasonable time period, let them go. This is the most important and most difficult part of my job.
Be wary of accepting work outside your area of expertise. It is too easy to neglect or mishandle such matters. You are far better of referring the matter to an expert and seeking return referrals within your area of expertise.
Value your personal relationships. They will always be your best source of new business. Even with Web sites, newsletters and firm brochures, 90 percent of my business still comes from referrals from other lawyers and former clients.
The Choice is Yours
I have loved every minute of owning my own firm. But it is not for everyone. Understand the sacrifices required before you quit your current job. In exchange for freedom, you will take on the added roles of the office, manager, the accountant and the IT coordinator. You will be able to choose your hours, but you will probably work longer and harder. You will think about work from the time you wake up until the time you go to bed, and maybe through the night.
That, however, is what many lawyers already do – they just do it for other people. Why not go out on your own and do it for yourself?
Christopher T. Hurley (www.hurley-law.com) is the founding partner of Hurley McKenna & Mertz, P.C. in Chicago, a firm devoted to the representation of catastrophically injured persons. Mr. Hurley has a special interest in protecting the rights of people neglected and abused in nursing homes. He may be reached at firstname.lastname@example.org