Should You Start Your Own Law Firm_ Top 10 Reasons to Start or Not Start Your Own Firm

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2022.05.11 - Should You Start Your Own Law Firm? Top 10 Reasons to Start or Not Start Your Own Firm
[00:00:00] All right, so we'll get started. First of all, I want to apologize for last week as you probably figured out, if you're on this call last week, these are all done live. And what happened is I started this webinar and right before the webinar, I was on this call that it was a very difficult call that, that did an end.
It was with a group that was fighting and not making that I'm involved in. And and then I got on this call and started doing this webinar and there was a mix-up the first thing is the webinar didn't start properly. The stuff was behind me and then but I powered through, and then after that, I got to one of the slides and it was a completely different webinar that loaded.
And it was actually pretty funny. So nothing like that's ever happened, but if you were on the call last week, I certainly apologize for that. It was really inadvertent and it was a big not a good thing. So I usually was much more professional in these things. And hopefully this one will go better because we did this last week.
I, what I didn't cover, I did an introduction to this topic and I'm not going to repeat the whole introduction for the [00:01:00] topic, but I will go into a little bit more depth about the top 10 reasons to start and not start your own law firm. And this is it's a fun topic. I was at an event last night.
And there were a lot of people that had started in solo firms. And what's funny is a lot of people that are in law firms or coming out of law school. They want to start their own firms and then they start their own firms. And then after starting their own firms, and a lot of times they want to get into other businesses, which I think is funny.
So they, this, it's almost like this is a step to start your own law firm. Once you start your own law firm, it's almost a step to get out of the law again and start your own business a lot of times. So last week when I talked about with everyone was just the idea that kind of a law license is really a business license and and historically what's happened.
And what happened for, hundreds of years is that you would get a lot of gray and then that would be your business license. And then that would give you the right to go into different areas and start a business. And the whole large law firm model of the law firm model really started after world war two, [00:02:00] when you have large companies starting in the United States and then the law firms starting with actually started building out very large firms to ma to mirror the corporate clients.
But before that, there wasn't really such a thing as large law firms. And really everything was done by individual people that were solo practitioners and small things. But I did want to talk a lot about the opening your own firm. And before I got into this business I actually got the first thing I did was think about starting a solo.
So off-farm, and I only, I actually learned about what I'm doing now after I quit to start my own law firm. And and the, and so I do have a lot of experience doing this, which I didn't talk about last week. What had happened to me is I was in a a large law firm. And I was doing well, I had business and so forth, but I was very unhappy with the politics of the firm.
And the fact that I just saw these partners losing their jobs. And the firm I was at before was they didn't want you to have business. It was all about work. And it was just a very in a lot of [00:03:00] respects, a very stressful thing. So I would go into work every day and just, it was not a pleasant thing.
So I thought I'd be better off starting my own firm. And and so when I gave notice to start my own firm and I planned it and then had clients and everything they came in and said, if you're unhappy, you should talk to legal recruiters and people in your business. And I ended up staying there or they paid me to stay at the firm, which was very nice to them for two or three months.
While I went out and basically talked to him, there was a very good market at the time. Almost every law firm, a big law firm in Los Angeles and learned all about recruiting and all the firms that later became my clients. But so this kind of how this business got started. And then when I started my own practice and laughed, I, this was all I thought about, and I started doing this and staked everything on it.
But I do have a lot of experience with it. I know a lot of people that have had their own firms and and even for years because I'm an attorney our company I maintained a law firm, a small law firm to do things for the company, whether it was corporate formations or different types of litigation or trademarks and all [00:04:00] that sort of thing.
So I do want to talk to you all about it. And I have a lot of there's a lot of things I can say about it. I know a lot of people that have been, that have started their own firms. I know a lot of people that currently have grown firms and are successful. I know people that have been unsuccessful.
And I hope that this is something you're considering, which I know I was at the time for several years that, that this, that I can help you today and understand, tell you the the reasons to do it. And maybe, and also the reasons not to do it. And I'm not going to talk a lot about the other introduction stuff that I spoke about last week.
I will talk to you a little bit about more about these reasons. And the system are talking about the clients I got and so forth, which was fun at the time that we talk about, but but a lot of people do you think about starting their own firms and and so this, let me just get to this slide for you here, and then we will get started on a second.
So these are the top 10 reasons to start your own firm and and the, and the reasons to do it. So here we go. The first reason that I think that [00:05:00] as a good reason to start a firm and especially if you're at another firm or if you are a small firm and and you feel like you can do it are if you have clients.
I think when I was Thinking about starting my own firm. The first thing that I thought about was I do not want to leave and and not have any clients. I want to make sure that I have work to do, and I want to make sure that I have people that will pay me to do work.
And and I don't want to, I'm not going to leave before doing that. So I actually started my firm while I was currently practicing. I set everything up and then I had clients that I knew would be happy to follow me that were giving me different types of work. And and that was really the way I started.
I think if you start a firm without having work to do, I think it's very risky to do it otherwise. You can certainly come up with business models and things to do it, but it's important to have work. And so when I investigated how to get work I looked at my existing clients and I had a lot of small clients that had a [00:06:00] piecemeal type work, which was back then it was a web agreements and things, and because the web was relatively new and and that sort of thing.
And then I also did a lot of research. I read about how to start it, doing representing taxpayers and doing offers to to reduce the taxes with the IRS and representing different types of litigation. There was things that I was learning about in my practice, which at the time in California, there was different types of environmental litigation where you Sue as a private attorney general.
So I was looking very closely at every single type of work that I was doing and every single type of thing I was defending and making sure. That I was able to get work. And and I did so by the time I left my law firm I had it set up. So I literally had a month's worth of work that I could do before I left billing out at a lower billing rate and so forth.
And and so I, I felt like I had stability I, and I did have stability. I was able to get clients through advertising and other things before then. And a lot of people and [00:07:00] different practice areas are able to set themselves up to leave their firms with different types of work. One of the problems, if you're at a major law firm, which would be, most AmLaw size firms is that you're working for ma major clients.
And those clients are very unlikely under any stretch of the imagination, especially if you're young attorney to go with you. But in, in many cases there's different types of things you can be working on where they would go with you. That could be things like if you're a patent attorney doing work and you do really good work, and you're the only patent attorney doing a lot of the work, many times the clients will go with you if they like you and if they think you, they can do could rights, I know.
Lots of patent attorneys that even worked for major clients. When I say major clients, I'm talking about people like Microsoft and huge clients. And when they left, they kept giving the work. I even know, patent agents that in some cases have books of business that are into the seven figures that left and and are doing very well.
But when they were with large firms, major firms. Patent and different practice areas, you can do it. I know [00:08:00] a lot of times real estate agents will be working for entrepreneurial clients that are buying and selling real estate or corporate attorneys will be working with have different clients where they do a lot of the ongoing corporate work and even young corporate attorneys.
I've known people that are three to five years out of school that develop a lot of relationships and move between firms. And it moved over the course of their career to multiple firms and been able to take the work with them. I've seen people that are in house. I believe I saw one guy was funny.
He he left to a healthcare company and then he became the healthcare company grew and he was the general counsel of it. And then they gave all the work to his firm and he built it up to this giant law firm. And I actually got in a few fights with him because he it's not anything. It's funny, but he hired attorneys for me and big attorneys and wanted to pay me nothing for which I ultimately accepted cause I wanted the person to get jobs, but it was, but then the the anyway, the point is that he the firm ended up going out of business because he lost the one client.
So you typically want to have lots of different [00:09:00] clients. And that's one other thing that I would just say that if you are starting a firm, you should be doing lots of different things. You should be trying to you have to have multiple different types of revenue. You don't want to start a law firm.
That's just doing one type of thing because that could change. You need to have different types of clients, especially if you're a solo. It's very important. And and then you need to understand PR really before you leave, if the client's going to give you work, and then if you do that, you can succeed.
One thing that I would caution any young attorney that's thinking about starting their own firm is you really do not learn how to practice law until you're probably three to five years out. And the reason is when you're young, you're making a lot of mistakes, your thinking process, still off your terms of how you approach problems.
You haven't been exposed to enough people practicing law and the way they operate and haven't been exposed to enough situations. You haven't been exposed to. A lot of things. I remember my first deposition, for example, I was in a. I don't know, I was the third year [00:10:00] attorney by the first time or maybe second or third year attorney, by the time I took my first, the deposition.
And and they it was a kind of a case of the firm didn't care about it was I don't know how the cut torque type, but not a serious toward in the attorney, the most offending or that I was up against walked in. And he was a sky. He was, he must've been, 350 pounds. He was giant and he was sweating alcohol.
So my my eyes were like burning and and he was objecting to everything I said. And then at one point he, he'd threatened to slap me or something to stop the deposition. I was terrified. I couldn't I had no idea like how to handle someone like that. And and if that had happened to me as a solo practitioner, I would have been a malpractice case.
And eventually I was lucky because there was a an, another attorney from another law firm in the room that, that helped me through it, but it was terrifying. So you have to have experience in doing different types of work. And and then you have to have the training really, because you're not, unless you're doing, you want to go and learn [00:11:00] a completely new practice area, which you can then then know, you need to be fairly careful.
And the other thing that happens too, is if you go out of your. And they like you when you leave and they think highly of you they're likely to also send you work. So that's what happened to me. Like I got work from my, from when I left and I ended up giving the work away, but if they like, you they'll give you work.
So oppressing the people you're working with and and making them like you is very important because they can they can, they will feed your work. And if they respect you, and there's a lot of small law firms and attorneys all over every metropolitan area that are getting worked in our former firms.
And that can be that can make you very successful. So thinking that you don't like the law firm where you're working, so you're going to start your own firm and you don't like the law firm, you don't like the practice of law or the way you're being required to, or you don't like to have to do off of FaceTime and getting mad at people.
And you should never burn bridges because if you do a good job, they will send you things that they're conflicted out of. They'll send [00:12:00] you all sorts of things. Firms like the first firm I worked at Quinn Emanuel got, became a big firm, a lot of very quickly. Saying it was only doing litigation.
It wasn't going to compete with people that sent it from, what matters they were conflicted out of. And so all these big firms late from the walk-ins and others when it was a young from Senate work. And so it's just when it was just a few guys, so it grew, so the same thing with you, you want to make sure that you across people.
And I know lots of people that have left major law firms after not making partner, a lot of law firms just don't have the capacity to make you partner because they don't have any room. And and then especially if you don't have a multimodal now look at business, which can be impossible.
And and so they go to their, they start their own firms or they go to a very small firm and they send them enough work. And and a lot of even major American law firms, Quinn Emanuel is an example. It's not a lone practitioner was a few attorneys by having good relationships with lots of law firms, vocally and so forth was able to grow into a major firm.
And and so you have [00:13:00] to if you do a good job you'll get work. And same thing within house. Like a lot of times people will leave in house jobs to start their own firms. So if you did a very good job in house for a client and you're in house, they'll often send you work, not and that can help you quite a bit as well.
Then it can benefit the solo and also the the company, if you have a lot of in depth knowledge. So again, that's another place where you don't want to burn bridges. And one of the mistakes that a lot of people make when they're younger, as attorneys is. They resent they resent authority or they resent getting their criticized or they reason structure, or they they feel like they're being taken advantage of, because they're not paid as much as some attorneys and other firms are.
And there's a million different reasons you might have resentments against your firm or your employer. And the thing is that the more people that you impress along the way, and the more people you make, like you the more work you're going to get from those people in the future and the more they'll help you and vice versa.
So it's important to make sure that you, you make people even your peers and other people like you, I've [00:14:00] sent all sorts of cases to people that were just very nice to me along the way. And they had no reason to be, there was nothing that I, and they just were very nice. And and so they ended up getting work and in some cases lots of work.
And I didn't ask anything in return and people will do that for you too. Especially if they think that you're someone that's going to be committed. If you, it's important, if you want to start your own firm to feel like you have done a good job, building up relationships, to feel like you have people that will send you work and to feel like you that that you can do, you'll have some sort of stability.
You don't just want to walk off of a cliff. And and that's and I also would recommend that you have enough experience, that people are confident that you know what you're doing, and. A lot of people. You have to have some experience before you do it. Not, I'm not saying you always have to I've I have seen some many remarkable stories of people that just started their own practices.
And and I'll hopefully tell some of those stories today, but without an experience just right out of law school, I know one woman that started [00:15:00] saw her last night at immigration firm. That's just tens of millions of dollars worth of work. And she was at a wedding last weekend with Steve when, just incredibly successful and and no experience, no one would hire cause she went to fourth year law school and just came out.
So you can do a lot of us on your own, but you really need to have a lot of here you need to really want to try to have some business. And then that particular woman's case, I she was married and when she went to law school and her husband was working, so they, she had someone to help support her while she was getting started.
And then of course, she became that breadwinner later which is nice. But and then the other thing is you also another reason to start your own firm is if you have the support from a group of other attorneys, and trust completely who will work with you. And and so a lot of times attorneys will start firms with peers.
I, I, several times when I was practicing law and after I was practicing law for years, At people that approached me about starting firms and and those people can become your new partners. And I know lots of firms that have started that have become big firms from people that I used to practice [00:16:00] law with.
And and they all learned, whatever they were learning at their existing firm. And then about the practice areas and the clients and so forth for several years. And then they ended up starting their own firms. So if attorneys have worked together for a long time, they often may understand each other's strengths and weaknesses.
So you may be working with people. Some people that you know, are going to be very good at marketing or meeting clients. You may be working with people that, have very good technical skills and other people may be very good at working in recruiting new people. Quinn Emanuel is a perfect example like that from.
Quinn was it still is, very good attorney, but also a good business generation and and uniting people. And Urquhart was very good at law school recruiting and client development and Emanuel was a very extremely good writer. So it's just, there's all sorts of different types of people that come together and can can be very good attorneys together and and compliment each other's strengths and weaknesses.
And so example and then of course, you have other people that are very good at finance, so they can keep the law firm running financially. A lot of law firms go out of business when they don't [00:17:00] watch that. And and then the quality of the work. And so when you start a firm or you think about it with your peers and you watch what's happening there's all sorts of ways to do it that if you have a group of people that you're working with can, can work.
There can work very well. If you guys are very close or women, ladies are close or whoever you can do it very well. And it can work a lot of times, much better than a solo practitioner because everyone is doing one thing that they're good at. If you're very good at you might be very good at I dunno going to court and other people might be very good at writing briefs and other people might be very good at getting clients and other people might be very good at, and there's all these different aspects.
And so when you come together as a group and you, everyone's using their strengths, you can many times do much better. So that's another good reason to start a firm. And and that's one of the ways they they can work that the problem is in many times they will leave a firm with clients as well.
And that can be very helpful. The big problem though, a lot of times when people run into, I get them talking about the [00:18:00] advantages, but one of the big problems that people run into when they start firms like this is people will fight about money and client and origination who gets more money and then things bad, but but a lot of firms do start this way.
And and they break off of firms all the time. There's great firms all over LA that are that splintered off of major firms, whether it's IRL or, just tons and tons of Latham and tons of firms that have done that. And and that, and if you're with a group of people and you're all thinking about that and watching how your competitor or how people that you work with.
Have started, are how your firm's working and you understand the business model and maybe you have some insight into how to make it better, which is typically the way firms start, they'll come out and they'll say we have a great way to give better client service or to save more money or to make it a more fun and tolerant workplace for employees.
Whatever the, they've always been seeing a different version of the same thing, but if you can do that that can be very helpful. Another thing is that another good reason to start your own firm. And I talked about this [00:19:00] earlier, but if you're in a very well-defined practice group and and and very well-defined and confident that a lot of your work will keep going.
If you're in, like I talked about patent law real estate law, and many types of corporate law, that can be very very good. Many times a patent attorney will be the only attorney in in their law firm that has experienced in something like, I don't know, patent and microwave frequencies, or a certain type of drugs or some exotic device that's electrical, and many times the client would automatically follow them because they have nowhere else to do it.
There's other types of people that may sometimes in big law firms, they have a attorney set up that are doing all the risks or work for four or five clients when they only person they're doing it. If you leave, they may go with you. They there's other people that have experienced setting up during different types of incorporations or transactions and and understanding how certain client likes to buy and sell real estate.
So all that stuff can be very helpful and And then the odds are pretty good that if one of those attorneys, if you leave it and you feel like you're close to the client, that [00:20:00] they will go with you. I've seen a lot of attorneys have be very successful in doing that and and do well.
And so if you have those kind of relationships, that could be good. And the other people again, there's just a bunch of these kind of top X, but employment is another good one where a lot of times, if you have a bunch of employment clients in a law firm and you're doing all their employment work, sometimes they'll follow you.
And and that as well. Those can be helpful. The skills that are rare in the market and a lot of people don't have one thing about those rare skills is many times, if you take a a skill could be something as simple as a trust in the states or some aspect of it.
And you take that it may be very common in Los Angeles, but if you take that and you set yourself up and I don't know Riverside, California, which is outside of Los Angeles by an hour or so, all of a sudden that's a rare skill there. So take whatever your skill is. If you take it to a market where there's not a lot of you that can also be very helpful as well.
I know one guy too, by the way, that's a funny story. He [00:21:00] realized that there weren't a lot of people doing education law in Los Angeles but a type of education law where he would Sue school districts on behalf of Students that weren't getting special care and get a big hourly rates and fees.
And he started prac. He went to, I think he went to a top 10 law school, but didn't practice first 20 years of his after graduating from law school and then found someone that was doing this and couldn't believe how successful it was and set up a practice doing this and which I couldn't believe he was like a tech entrepreneur at one point, he started one of the first I dunno, a very successful company, a technology company that he sold for a bunch of money.
And then didn't really do anything for several years. And then I was in a store one day like a secondhand furniture store or something next to a I don't know, having a, I was having a health, food shake made or something and and walked in there. And I saw the guy in a Tweed jacket with a vast and he was talking about, he was practicing a lot and it was unlike anything I'd ever seen because he formerly was just walking around and t-shirts from a beard.
And now he's, [00:22:00] like a clean shave. And it was just very funny, but there's all these practice areas like that. So many times, if you investigate specialties, that's what I did. And you have a rare skill where there's not a lot of people in the market doing it that can make you a very successful.
And it's something to think about. Now the, one of the other reasons to start your own practice is many times people just have business experience. So there's a lot of attorneys out there that will have had business experience before going to law school. They will start in businesses that will have a confidence, will know what it takes to succeed.
And and they just have automatic confidence and they know they will succeed when they start it. So I when I was thinking about starting a practice I had been. From the time I was 17 or 18 years old, I've been operating a business doing essentially, asphalt work around Detroit.
So I was familiar with how to recruit people, how to get how to do work, how to advertise, how to run a business and how to promote it. And and so I just had a lot of confidence cause [00:23:00] I did this from a very young age and and I went through all the trials and tribulations from having lots of failures early on and then overcoming them and then a compost and becoming successful at that job at a young age, which gave me a lot more confidence in people my age might've otherwise had.
And so if you've operated business, before you have business expat experience, you may have been I've, a lot of people I know that have started businesses, two things one guy that started a very successful practice. He actually worked for me as an attorney and and went and started his own practice before he'd done things like, traded he'd been figuring out some loophole to make a lot of money in video games, playing the video games when he was young.
And then he went to Texas and I think graduated, he was one of the top three students in his graduating class. And then didn't want to practice in a law firm and came to work for me if you can imagine. But but then started his own firm became very successful. So he had a lot of understanding of that.
A lot of people just have a natural understanding of business and they look at situations and they can understand the business side of it. And they have an [00:24:00] instinct about how they would improve it. Some people like to read marketing books or study the sort of stuff. And they just have a drive to succeed.
And these kinds of people will succeed. If you are extremely interested in business and marketing, then you want to, and that's what you do on your spare time. The odds are pretty good that's going to help you, or if you're going to business, networking groups and things that can help you. So you with those sorts of skills, it may not really matter where you went to law school or anything.
I It's running the laws of business. Again, I was at this meeting last night where it was most of the people were attorneys and they all had to have, and there was a lot of solo practitioners. And in order to be part of this group, I think the solo practitioners had to have more than $12 million in business.
There was a lot, and there were at least seven or eight of them in this room and they so that means that their businesses for doing that and they've been, it's a business. And but none of those people, I just want to make sure that everyone understands. I think one of them went to Harvard law school and was the [00:25:00] youngest, one of the youngest graduates in history of our law school button and very smart guy.
But most of them were just local law schools and things that you, some not even accredited and you don't need to have any special background to do it. And I run around across people all the time that have great business minds and our practice who had their own firms and they and so if you have that kind of mind and you're looking at the work you're doing from a 30,000 square foot level and seeing the business aspects of it and understanding it that can make you very successful.
And and most attorneys do not think that way. Most attorneys what they do is they start practicing and they just see the work in front of them and that's it. And that's 99%. I make 95%, then there's a 5%. That will look at it from a business standpoint and think how can I get more business?
How can I do this better and all sorts of things. So if you have to think, how does your mind work? Because you can't just businesses complicated. You can't just make the decision that you're going to start your own firm. You have to understand the business aspects of it and how things work and and and just [00:26:00] wanting to be free.
It doesn't mean you have a good business mind you, and you don't. There's no reason that an attorney should know if they have a good business mind or not, what you should know, if you, how you're thinking about it. And and and most attorneys, the problem is most attorneys are not a good business people.
I'm gonna talk about that in a few minutes, but and and so a good business person is generally a more of a better business person than a wire. And in business you have and in the practice of law, you have people that are called finders, which are people that go out and find business.
And then you have what are called minders, which are people that watch the people doing the work and watch the people riding in the business. And then you have grinders. There's other people that are doing the work. So it's finders getting the work minders people, watching people doing the work, which are administrators and so forth, and then grinders, which are the people doing the work.
So she will typically will fit into one of those. And and and and so you need understand, where were you in that and businesses even a little bit different cause business evolves [00:27:00] promotion, and it involves all sorts of things. It's just important to understand that.
And the only other thing I would say is that one of the problems with the legal profession, I think the historic legal profession and the and the way that a lot of attorneys are taught to think, and the business side of rings. The a lot of attorneys presume that clients will find them.
If they're very good and do good work, or if they're out of confirm with a good reputation and they shouldn't have to go out, it's demeaning to go out and ask for work. It's meaning to promote themselves. It's demeaning to a hustle and all that sort of thing. And the problem with that is that psychology ultimately will keep you down.
So again, at a firm like Quinn Emanuel, if you become a partner, they will immediately, tell you, you have to and again, I don't know exactly what that firm is doing right now, but they would tell you that's an entrepreneurial firm that you have to sit down and start calling people and trying to bring them business hustle and do all these things where, so a lot of firms, they would just, you would just not be told that, and you would be expected to [00:28:00] your demeanor and more product would be expected to have a miraculously track work.
And and that thought process is a very old thought process where the law was mysterious and we're big firms, or even more mysterious and where there is, and that doesn't work if you're trying to start your own law firm. And and that thinking process, I just want to be clear to you.
We'll keep you down. And so this whole thinking process that I had the experience of working at Different types of law firms, one bear traditional with that thinking process and the other very entrepreneurial and the people that were at the entrepreneurial firm have all had incredible careers.
And the people with that old kind of thinking insulated process I don't know that any of them from what I remember made maybe a couple have had a very good long-term careers. They all ended up doing other things, despite being at a firm that at the time was ultimately much more and the firm actually went out of business, was Dewey, Ballantine.
And I would just encourage you that, anytime someone tells you, it's not good to think about things in a marketing [00:29:00] standpoint or a business standpoint, or that people should come to you and do business with you based on your your smarts or your degrees and that's should be collecting and the quality from your out.
That's just not how it works. You have to learn about this stuff, especially if you want to start your own firm. So I just want to caution everyone. I th that may be one of the most important things you ever hear. Cause I've just seen if you understand what I just said, because that is a psychology and a lot of big firms, and they can afford to do that when they have giant institutional clients.
But if you want to get out there and have a successful business and stuff in career you need to learn how to think about this from a business standpoint and cause it's going to make you more successful and it will give you more freedom. So I I don't know what to say other than that, but you do need to be very careful about how you approach things and and again, you don't, there's nothing that says you have to be interested in business, but you do need to.
Learn about skills about how to bring in clients and make people like you and get repeat work and all that sort of thing. So the other one is a fear in a small town. It will be one of the only attorneys in the town. [00:30:00] And I love this topic for solo practitioners. And I used to take calls at BCG all the time when candidates were calling and looking for positions.
And one of the fun things and was, is and I could talk about this forever, but all the time, every, several months at once every career, four months, we got a call from someone that I used to, this is just when in our California office we get calls from someone that wants to start a new is retiring and there's in a small town.
There's all these desert towns are stuff all over California and there's small towns. I There's, it's a huge state and there's same thing in Texas. And there's just all these small towns. And a lot of times there's no attorneys there and the same and there's, and you talk to these people and you're like how much did what are you making?
A lot of them were making good money. I Hundreds of thousands of dollars a year was the only attorney in town and they don't have a good experience. I had years ago, a small law firm out of Malibu and there would be people that would just walk in the door and and need help.
And and I would give it to a, I wouldn't get talk to the people, but there would be, other attorneys [00:31:00] here that would walk in. And they certainly would not work in a law firm of this law firm. And I don't have this law firm anymore, but they wouldn't.
The ever interested in a big matter, but they wouldn't be definitely do small things. So if you are, if you opened a practice in an area where there's not a lot of attorneys, meaning you open a practice in an area like in a smaller town or a smaller market, and you're the only person in that market that does the work you can have a very successful practice.
And but that, that, it could be all sorts of areas. It could be I don't know. I've seen people do things like during the shale oil, boom there are people that move to places like North Dakota and fantastically successful practices in those areas. If you're the only attorney in town you can do very well.
I've had, I had one instance, this is a few years ago. This is, it's a funny story, but I had this attorney that contacted me four or five years ago. And and maybe about five years ago, maybe six years, five years ago. And he had a. No, some sort of trust in the states practice [00:32:00] in California in orange county though, it was it was a real niche of trusts in the states.
And he was making over a million dollars a year running this practice and wasn't even doing the work. He had other four or five other people in the firm that were doing all the work and he wanted me to find a buyer for it. And I was like, I don't know if anyone, and that, and then he wanted me to take it over, he's oh, I like you.
You're going to take it over. There, there literally are these sort of opportunities everywhere. And if I was, if you, and this is just another piece of business advice, but if you want to open your own practice, you might consider because there are serious numbers of attorneys out there and trust in the states and all sorts of different fields that have their own practices that want to get rid of them.
And some of them are very pro I'm talking a million dollars a year. This guy's practice was, he was making that's what he was taking at home. So it was doing a lot more than that. When you're the only person in town, that's doing a certain type of thing a lot of times they will use you for the only option.
And I receive these calls all the time. So if you were to write [00:33:00] these attorneys or this is just a very easy business opportunity. If you were to write attorneys that are solos and ask them if they want you to take over their practice and so forth or tell them you'd like to come work for them for a couple of years and buy their practice out for some nominal fonts, some those opportunities are there.
And outside of major cities there's, it's like being the only doctor in town. There's not a lot of attorneys. There's a there's towns where. There's one attorney and there's another one, like 30 miles away. And then they do all the divorces together on opposite sides and you can do very well.
In a small town and you can definitely succeed even in larger cities. You can maybe find people to sell you the practice or to even give it away. The law firms typically do not have a lot of value just as freestanding businesses. So you can often times find people to do that.
It can be very difficult for solos sometimes to survive in larger markets, but not always. And then another reason to start your own practice. If you have a very wealthy family or friends and you're competent for continually send you work. I had not too long ago someone I went to law school with was a partner at a big firm.
I don't know. I think it was like hunting and Williams or something then [00:34:00] and they let him go because he didn't have any business. And he was devastated. And and then and then he told someone has, I don't know, was brother-in-law who happened to own a giant company? And he said I'm spending, hundreds of thousands of dollars a year on litigators.
I'll just send all my work to you. And suddenly he had a a very successful practice, never thought about it. Never talked to him about sending business that's because he was in this conservative attorney role where he wasn't even hitting up his own family for work. I, when he was, and and.
So that as an example of this the brother-in-law of possibility and yeah, so you got a job and and then he I guess it was a million dollars a year from the location from and he became very successful and was very happy and and it was like for him, the best decision he ever made, and I'm sure he got other work after that.
So that was a good thing for him. So a lot of times, if you have a very wealthy family or friends, or you have people that you're connected with the consent you work, that can be very helpful and you should always think about that. And one of the things I said earlier, that's very important [00:35:00] is to always have a constant source of work.
So what that means is you need to make sure that if you're starting your own practice, that you have some sort of work that you know, that it's coming in the phone has to keep bringing. And it's very important to understand that. The first office I ever rented, which I rented when I was practicing, because I was going to start my own firm had been bought by a, it was a nice office.
The attorney owned building, he's a guy that had worked at a small firm and then started his own personal injury firm or something. And and I think he went to NYU and gotten, LLM there and taps or something after law school, but couldn't find a job. So he started a personal injury firm and I, he used to advertise in the phone book and on the back of the phone book and on TV and stuff, and coming from a major firm, I was always amused by that.
And I made a, some sort of remark to some business guy that was working for him about how I found his ads amusing. A picture of him and crutches or something. It was just funny. And he said the thing you're going to learn, if with your own practices, you always have to keep the phone ringing.[00:36:00]
And that's the big thing. When you see attorneys with ads on the back of buses and on TV and, you may make fun of it if you're in a big farm and don't have to do that. But that's the most important thing is to keep the phone ringing and and the leads coming in, because if you don't do that you have nothing.
And it's very important. So how you should not ever for, if you're at a huge firm right now and watching this and and you think that you're above having to advertise and get business, that's a very dangerous thought process to be in because you could with, you need to have the phone ring.
And that's something that these amount of his personal injury attorneys and other people understand you need to have business coming in, always then the other one that a good reason to start your own practice. If you're interested in hustling you like hustling, Mitch means getting out there and talking to people, bringing in business you could care less what people think of you, which I think is a great characteristic for a lot of attorneys.
You're not afraid to do anything. You're not, you don't care about, you don't care about personal injury. You don't care about representing taxpayers, fighting the IRS. You don't care what you're [00:37:00] practicing. You don't care about Wells. You you're just excited to make money and to bring in business and you want to build your own firm.
And you're just you just have the spirit within you. And you need to know how to do that. That's that now not every solar does that, but most of them do, you have to be prepared and you have to enjoy it, and you have to enjoy the chase. The attorney that had. That was in his, I think he was in this mid eighties, late eighties, or maybe even early nineties that was getting rid of his practice where he's making a million dollars a year and not doing any work.
His favorite part was hustling and. Talking and closing these deals and then other people would do the work for him. So a lot of these attorneys, they have no shame. You can see ads on buses and and these TV ads and websites and south bay they don't care. They're out there hustling.
And again you, this is what businesses do. You have to realize that if you have that skill and you're happy to get out there and hustle, and you don't mind being associated with things that some attorneys would make fun of, which is ridiculous, because all you're doing is surviving. Then [00:38:00] then you know, you may you may be the right person for this kind of work.
One thing that's interesting as when they talk about diversity diversity there's, there's certainly racial diversity and. Religious diversity and sex diversity and all these different types of diversity, but there's also what I would consider diversity of thought.
And diversity of thought means traditional thought in the largest law firms which, some people might term an old boy network and things is it's basically being very conservative and and pushing business around through informal introductions that this person's like us, you should do business with them.
You can trust them. That's one form of thought. And that's a lot of cases. What I think that when people talk about the need for diversity, there's a, almost a rebellion against that kind of old boy, a white shoe type of network or grow culture, or some people call it. There's just all these different words for it.
And the way of thinking about business, which which is the hustling and pitching and being very not being going directly to clients [00:39:00] instead of through referral mechanisms and all this sort of thing, and just getting out there in the street and getting business, that's a whole different thought process.
And one of the thought processes is from people that are established and have, and others for people that necessarily aren't established well, if you want to be a solo practitioner, you need to have that diversity of thought and and be able to get out there and hustle and that's important.
And and that will make you a much better attorney. All right. You should not worry about pride. Certainly, I get on these webinars. I if you're one of my candidates, I just sent you an email about searching our database for jobs just now. It's right before I got on this call, you, you shouldn't, and then people respond, F you and all this stuff sometimes when you mark market and and then people will if you will take your market in the wrong way.
So you just, you have to be you have to want to get out there and you have to not be afraid of being seen. And you have to do all these things because you shouldn't be able to make videos telling people, I wish I didn't make a lot of these videos, but in videos telling people why you should use their [00:40:00] services and why you're great and and you need to want it.
And that's, what's important. So if you're interested in that you're a good person to do it. And you shouldn't care what other people think about you you want to build a business and and you have to be a showman and you can allow people to make fun of you. But that's that's their problem.
I had an interesting experience where I was hired by. A very prestigious law firm to to help build up their LA office and their LA office had I don't know, like two people in it both had incredible qualifications. They went to, I think one went to Yale and MIT and the other, there.
And and then I was hired by another office to build this office. And so I called these two people and they really didn't have any of their own work. And and they started saying, I saw this article you wrote on your blog. It was about I don't know, getting a medical exam or something, how can you possibly be recruiting for us when you're writing that?
And I was hired by the head of the firm is a famous attorney to do the work. So the point is that the you can't necessarily if you're out there marketing, those are the people. Think about if you're very good at marketing, you can become president.
How [00:41:00] else did someone like a Trump compressed? You th this is all important and and it's how businesses are built. And so you need to think that way if you're not able to market yourself, then you're not going to be able to do well. And you have to, I, that's what I do.
I have to do it. And and every successful business does, I have to make videos. I have to send out marketing pieces. I have to Hustle. I have to work all the time and I do it. And and people certainly make fun of and criticize me. And they will U2 if you start doing this. But ultimately do I care?
And no, I don't. I used to care some extent because people would come in. When I've been doing this so long that when I first started the recruiting firms were basically like close. They were like, I'm like this recruiting firm and I am a former attorney and this is how they acted in the market.
And you should use me just because of that. And and there were no, and the first I was the first person, this is incredible, but I was the first person in the legal placement and recruiting industry to put an article about how to interview on our website. And [00:42:00] people were like, what are you doing?
Like my, even my recruiters came in, they're like, this is something our people will steal from us. And it's just, but the point is, as you, a lot of people are critical. And they'll be critical of you if you start at your business building efforts, but you have to be, your heart needs to be in it and you need to be sold that this is what you want to do, and you need to have that passion in you.
And and if you are interested in that and you feel like you have that, you can be amazing. And and it can really help you. And you have to understand that the most successful people out there are never afraid to put themselves out there and and self promoters with whoever it is can do phenomenally well, what are on law firms?
And if you have that drive and you're able to do it, then you should do it. It doesn't matter by the way that you're it's the most important thing. And then there, there are people, and this is, could be you people. That's psychologically for a variety of reasons, cannot get along working with other people or groups.
And they just don't like working for other people or the type of environment law firm or in-house that cause [00:43:00] there, so if you have not done so there's the personality tests and so forth, I think there's at least one on the BCG site that you can take. I think that would be very helpful for you to understand your personality.
There's lots of people that work better alone. There's some people that you know, that if you walk up to them and you try to associate with them while they're while they're doing anything, they will they will the they're just don't get along and you can see them and and they don't last in law firms or they don't last and it could be that you whatever the way you are doesn't matter.
I There's some people that are just not good fits for working with other people and that everyone has their own gifts and everyone has their own type of personality. And there's nothing wrong if you're like that it's perfectly acceptable. You may be someone that wants to sit at home with 10 monitors and I dunno, it doesn't matter, but there's nothing wrong with that.
You may just work better alone and that's fine. You may not, you may have issues with taking orders from other people. You may have issues with having to go to work at a certain time. I th the guy I told you about [00:44:00] earlier that worked for me that was a third graduate thirdness class from university of Texas.
Law school. And then started a successful personal injury firm. He wanted to I was butting heads with him because he didn't want to come into the office and felt more comfortable working on a laptop at home with his dog sitting on his couch. That, that was, and I just didn't think that was acceptable and there's nothing wrong with that.
And that's how he wanted to work. And so people want us to do that and do that. That's fine. And that can work for certain types of people. You certainly became successful with this on, from doing things his own way. It's just, if you are like that and you just dread going into work, you dread seeing people, you drive interaction or you dread having to be dependent on other people for raises, or you dread all this stuff you can do very well.
And some people are just much happier on their own. And and you can certainly get training in large law firms and and, but at some point for your sanity yeah. You need to leave. And that was frankly were when I was working in a a large law firm where I was coming from I couldn't [00:45:00] understand like how you could be sitting in there and then some, one day, even if you're been a partner for 20 years, someone can show up and ask you to leave.
It didn't seem, it seemed insane. Like, why would you invest your time in that? Now that doesn't mean that every law firms like that, and they're certainly not, but but not everybody's suited for that and that kind of thing. And then the other reason, this is a big one and and this is something. That you should think about a lot of people just can't find a job.
You may not be able to find a job, right? When you got out of law school, you may not be able to find a job after losing the job. And if you can't find a job, by the way, I just want to make disappoint. Anybody can find a job. You're just, there's stuff you're not doing. I spent some time on this website, spend some time watching webinars that I've given about how to get a job, but anyone can get a job.
It's just ludicrous to think you can't. But but anyway, if you can't find a job and you want something in your resume to give the impression you're still working despite not having any work, you can certainly set up something that says you have your own practice. And that's what a lot of people do.
This is very common. It's I see resumes like this [00:46:00] several times a day. When I say if I'm reviewing if I sit down, like I sat down this morning and reviewed or looking at maybe a couple hundred resumes and I saw, I would say, 10% of them had something like this as the current employer.
People do this many times when they when they want to take time off and they still have a few clients. And and a lot of times it's just a better it's a big, it's a good thing to have. It's, it shows that you're still working and there's nothing wrong with saying you operate a solo practice and you doing some clients is better than just saying nothing or putting down, that you're working at Starbucks right now.
I Which people do. And that does a lot more harm than senior. You have your own practice. There's nothing wrong with having your own practice. And and at least looks like you have your services are in demand and someone who's interested in paying you for work. And and it's better than having a blank on your resume.
So assuming you're doing some type of work it's good. And I don't think there's anything wrong with that. And then the 10th one is that you honestly do not care about how much money I respect and self worth you get, and you just want your own firm doing what you want and how you want to do it.
[00:47:00] And and some people do not care about money, which is great. And and they just want to do their own thing. And many times people reach the conclusion that they just want to do things their own way, and they take this route and it's perfectly fine. You may just do what you want to do, how you want to do it.
And and that means you're just, you people give you work, that's fine. If not, they don't, and that's a fine way to be too. And and you can figure things out on your own pace. So these are the top 10 reasons. Those are the top 10 reasons to start your firm. The only other thing I would like to add about starting your own firm that I think is important is It does give you a tremendous amount of financial flexibility, meaning you can become very successful, excuse me, in the long run having your own firm, if you want.
And it puts you really in control of your own destiny, which is which is which for me and it's not one of these lists, but having control of your own destiny is hugely important because if you can't rely on others and you [00:48:00] don't want to rely on forces outside of your control, if you start your own firm suddenly you're dealing with forces that are only within your control.
Okay? So these are the top 10 reasons not to start your own firm. And and and I think these are extremely important and something to think about. I tried to emphasize the positive reasons to start but the big thing to understand going into it is most businesses fail. Every time I leave the house and I go out I don't, I can't believe, when I go to where I go to local malls and things, how many businesses, you can't rely on, anything really staying open, even things you would think stay would stay open or closing.
So every business has fail all the time and franchises, fail, everything fails. And it's one thing to operate a business and work there, but it's another to operate them and they fail all the time. And being just because you are professional basketball coach doesn't mean you can play professional basketball just because you're played professional basketball doesn't mean you can be a professional basketball coach.
So those are [00:49:00] things to, just doing work as an attorney is not the same thing as being someone that general, that brings in business. And and that's very important because they may like basketball. They may both may understand the game, but that doesn't mean they can do each other's jobs.
And so sometimes it works most of the time. It doesn't. So these are the main reasons. But I've seen that that solo practitioners fail and the reasons really not to start. A law firm. So the first thing is solar practitioners fail because operating the businesses is very different than practicing law.
When you start a business you have to understand that that whatever you're making in your law firm is probably pretty good. And I'll tell you why in a second, but if you make, let's say you make $200,000 a year. The, an attorney figures that if they bill, they were able to go out and market and bill $400 an hour and bill 500 hours a year, they'll make just as much money.
And that's one of the things that people think but there's so much, so many [00:50:00] flaws. So that, to that logic if you think, if you're in a major law firm right now, and billing a thousand dollars an hour, I'm making $400,000 a year or whatever you're making. And you think that you can go out into a law firm you can start your own practice and bill out of the same amount of money and stuff you're missing a lot of stuff.
So whatever your salary is you're probably in, you may be working at home, but you're probably going to in an office. You're probably getting a group of other attorneys to bounce ideas off of each day and who is work and stuff, and their billing and their competition with you motivates you to operate at a higher level and keeps you on your toes and keeps you attractive to clients and things.
You're probably have a phone and internet system and other electronic support. You have secretaries, paralegals, and other people were processing that free you up to build those hours because you're not working on those things. You have other people that are going on and gathering work. And the reviews that the staff is getting that keep their quality up, the reviews that you're getting, that keep your quality of the reviews that you're in the, [00:51:00] the attorneys you're working with are getting the they're keeping and the raises, and people being asked to leave that aren't carrying their weight and so forth.
These are real, then there's a lot that goes into it. You're getting a name from the company or the law firm that gives you credibility in the marketplace. You're getting a paid vacation, other benefits that would allow you to take time off. You're getting bonuses and health insurance. And and then the other thing is management to make decisions.
Things like who to hire, who to fire, where to get office pace, what phone system you use, how to review people, how many people to hire, where to open and close offices, how to pay people when to slow down the law firm and grow it and where to get clients more. So obviously like from my point of view, like what I do, like this is what I love, like practicing legal placement and talking about it and so forth.
But, again, I spend a lot of my time doing things like finance and HR and all these sort of things. And you're missing a copy room, H toner, fax machines people that are going on negotiating, a weapon, Lexis and Westlaw law library, research support it staff to run servers monitor emails, keep the computers [00:52:00] running payroll tax and people that do payroll and 401k and all this stuff.
And, I can list for pages, how much support the average law firm or a business provides you if you work there. But these are a huge number of things. So you're not just the money that comes in from the billing that you're doing. If you're a lot of you're an attorney is not just for money, that's showing up, it has to be paid to manage all this.
And the management systems alone have a huge value that the law firms got. If a law firms paying you $200,000 a year, the law firm and you're bringing in whatever it may cost the law firm four to $600,000 a year to provide the support, to provide, even pay that. And even law firms will lose money.
So even a law firm. You may be billing bringing in $800,000 a year and paying $200,000 may lose money on you. So it's just that the point is that a law firm in all businesses are th they need a lot of business acumen. There's