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The Solo Practice and Small Firm Section of the Contra Costa County Bar Association presents
How to Open a Law Firm:
Tips and Tricks for Solos
Speakers
William A. Hickey
Ann M. Dalsin
Law Office of William A. Hickey
Dalsin Law LLP
David S. Pearson
Heidi Coad-Hermelin
Law Offices of David S. Pearson
Hermelin Law Firm
Andrew J. McCall
Law Office of Andrew J. McCall
The Solo Practice & Small Firm Section evolved from the recognition that many sole and small
firm practitioners desired and at times needed the camaraderie, intellectual stimulation and
informational exchange that attorneys generally find in larger law firms. By having consistent
networking and fellowship opportunities, the Section has evolved into a collegial organization
resembling a "firm," with specialists in various fields both willing and capable to offer assistance
to other Section members.
Topics
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Office location
Staffing (contractors vs. employees)
Sources of intellectual content
Filing and records retention
Insurance (E&O, health)
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Financing
Marketing
Billing
Time Management
Technology
Friday, November 22, 2013
Walnut Creek Marriott
2355 North Main Street  Walnut Creek
MCLE Credits
1.0 Hours General
1.0 Hours Ethics
Written Materials Prepared By
Nicole A. Davidson
Law Office of Nicole A. Davidson
CCCBA Solo Section
How to Open a Law Firm
November 22, 2013
Page 2 of 10
How to Open a Law Firm:
Tips and Tricks for Solos
I.
OFFICE LOCATION
A.
II.
Initial Considerations
1.
Affordability
2.
Comfortability
3.
Accessibility
4.
Prestige
5.
Security
Fish
Where the Fish Are?
B.
Ethical Considerations of Office Sharing
1.
Prepare an office-sharing agreement
2.
Inform and educate clients
3.
Avoid partnership-like actions or appearances
4.
Protect client confidentiality
C.
The Home Office
1.
Personal needs: Self-discipline and control of daily life
2.
Professional needs: Client comfort, staffing compatibility, interaction
3.
Security and privacy concerns
4.
Zoning restrictions
D.
The Virtual Office
1.
Neutral ground: Courthouses, libraries, bar associations
2.
Rented space: Conference rooms, vacant offices
FINANCING
A.
What Will it Cost?
1.
Setup
2.
Location
3.
Type of practice
B.
Financing Options
1.
Personal savings or retirement accounts
2.
The family fortune (loans or gifts)
3.
Credit cards
4.
Local bank
Minimum Average Investment?
CCCBA Solo Section
How to Open a Law Firm
November 22, 2013
Page 3 of 10
C.
II.
Types of Loans
1.
Line of credit / revolving line of credit
2.
Term loans (equipment, furniture, leasehold improvements)
FINANCING (continued)
D.
III.
How to Get a Loan
1.
Determine how much you need
2.
Bank requirements: The 4 C’s
a.
Character – Does the bank want to do business with you?
b.
Capacity – Does your cash flow suggest you can repay?
c.
Capital – What will the funds be used for?
d.
Collateral – If all else fails, how will the loan be repaid?
3.
Paperwork you may be required to provide:
a.
Business plan and/or partnership agreement
b.
Annual fiscal year-end statements (2-5 years), quarterly statements
c.
Aged accounts receivable schedule
d.
Cash flow projection (2 years)
e.
Personal financial statement
f.
Personal and/or law firm tax returns (2-5 years)
g.
Insurance: business interruption, disability, life
4.
Be prepared to discuss:
a.
Financial statements
b.
Capital adequacy and financial strength
c.
Hidden assets: billable hours, ripe settlements, promising winners
d.
Billing practices: rates, industry comparison, frequency, collection
e.
Litigation risks
f.
Cost controls
g.
Client base: types of clients, general vs. specialized practice
STAFFING: CONTRACTORS VS. EMPLOYEES
A.
Before You Hire
1.
Know what you are looking for
2.
Test skills and check references
3.
Commit to training and planning ahead
4.
Prepare formal, written office policies
5.
Keep temptation to a minimum (i.e., theft)
B.
Contractors
1.
Advantages to using independent contractors
2.
Types of services available
3.
Questions to ask
C.
Employees
I’m looking for someone who is
professional, hardworking,
honest, punctual, organized,
reliable, attentive to detail, and
proud of his work; a motivated
self-starter, working on his own,
but also respectful of others and
able to lead or follow a team; he
must be committed to this firm,
maintaining a positive outlook
while competently multitasking
under pressure.
CCCBA Solo Section
How to Open a Law Firm
November 22, 2013
Page 4 of 10
IV.
1.
Secretaries, paralegals and associates, oh my!
2.
Staff issues: Selection, motivation, retention, delegation
3.
Using staff to multiply resources and increase profitability
MARKETING
A.
Get the Customer
1.
Overcome your fears
2.
Commit to marketing
3.
Define your professional identity
4.
Distinguish yourself: Create a niche
5.
Learn about and target your market
B.
Methods
1.
Self promotion
Newsletter as a Marketing Tool?
a.
Announcements
- Define your purpose
b.
Advertisements
- Target your audience
c.
Brochures
- Keep it simple
- Design to impress
d.
Newsletters
- Mail, email, publish online
e.
Networking
- Determine frequency
f.
Seminars
- Request feedback
g.
Articles
h.
Website
2.
Interpersonal skills
a.
Become a better listener
b.
Offer a value-added service
c.
Create non-pressure sales
3.
Service your clients and they will become your best referral sources
C.
Tips to Improve Your Marketing Skills
1.
Always carry business cards
2.
Be prepared to tell people what kind of law you practice
3.
If you have an office, offer visitors a drink while they sit and wait
4.
Send thank you letters when you receive referrals
5.
Remember that availability or non-availability is the single most important
factor in getting a case after you are recommended
6.
Return phone calls by telephone, email or fax, preferably yourself
7.
Have form conflict letters and waivers on hand
8.
Discuss fees up front and put your agreement in writing
9.
Try to put clients at ease – calm nerves and provide reassurance
10.
Ask clients how they prefer to be contacted & keep them informed
11.
Introduce clients to staff members who will work on the client’s matter
12.
Show clients how your bills can be tax-deductible, if possible
13.
When a case is over, thank the client for the opportunity to work with her
14.
If you have bad news, be simple, direct and honest
15.
Don’t complain about how hard you are working
CCCBA Solo Section
How to Open a Law Firm
November 22, 2013
Page 5 of 10
16.
17.
V.
Get rid of bad cases and clients before they give you problems
Keep a picture of your family on your desk
SOURCES OF INTELLECTUAL CONTENT
A.
Do Good Work: Satisfy the Duty to Perform Legal Services Competently
1.
Attend and/or teach continuing education programs on a regular basis
2.
Subscribe to and read journals in your field(s) of practice
3.
Belong to and be active in bar organizations and committees
4.
Read CEB Practice Guides and Action Guides
5.
Arrange to have research materials in your library or available to you
6.
Create work product systems and models
7.
Join study groups
8.
Establish relationships with other lawyers
B.
Law Libraries
1.
Contra Costa County Public Law Library – Main/Courthouse Branch
1020 Ward Street, 1st Floor, Martinez, CA
Hours: 8:00 a.m. – 5:00 p.m., M – FRI
Tel: (925) 646-2783
http://www.cccpllib.org
Open to the public, with Westlaw privileges
2.
Contra Costa County Public Law Library – Richmond Branch
100 37th Street, 2nd Floor, Richmond, CA
Hours: 8 a.m. – 4:30 p.m., M – FRI (closed from noon – 12:30)
Tel: (510) 374-3019
Open to the public
3.
John F. Kennedy University Law Library
100 Ellinwood Way, Pleasant Hill, CA
Hours: 8:30 a.m. – 10 p.m., M – TH, 10 a.m. – 5 p.m., FRI – SUN
Tel: (925) 969-3120
http://library.jfku.edu
Free access to Solo Section members (no check-out privileges, though)
All others pay $5/day, $45/semester, $150/year
C.
Free Internet Resources
1.
All purpose law sites
a.
Find Law (http://www.findlaw.com): primary documents, news,
commentary, and links to legal and governmental sites
b.
WashLaw (http://www.washlaw.edu): a bare-bones but current
collection of links to web sites, internet and commercial
databases, discussion groups archives, and more
c.
Cornell’s Legal Information Institute
(http://www.law.cornell.edu): original materials and links to
other sites, organized by topic, type of material, and jurisdiction
CCCBA Solo Section
How to Open a Law Firm
November 22, 2013
Page 6 of 10
2.
3.
VI.
State Constitution and Statutes (http://www.leginfo.ca.gov/calaw.html)
Prepare to go solo: My Shingle (http://www.myshingle.com)
BILLING
A.
Setting the Groundwork to Ensure You Get Paid
1.
Discuss fees & costs, services provided (& not provided) at initial meeting
2.
Don’t accept clients who cannot pay, unless you plan to work pro bono
3.
Require a written agreement and retainer from all clients
B.
Fee Setting Methods
1.
Contingency fees
2.
Fixed fees: based on estimate of experienced attorney
a.
Advantage: Most clients prefer certainty in billing
b.
Disadvantage: Underestimate the fee, and work for free
3.
Hybrid fixed fee: used when exact quote is not possible; sets
minimum fee, hourly rate discount, and/or maximum fee
4.
Hourly rate
a.
Advantages:
1.
Sophisticated clients are accustomed to hourly rates
2.
More simple and profitable for attorney
b.
Disadvantages:
1.
Unsophisticated clients will balk at most hourly rates,
prefer predictability
2.
New lawyers will spend too much time and cannot bill it all
3.
Fees are not related to value provided or results obtained
5.
Fee by stages: break work into stages, estimate work, and set a fee for
each stage as you go
Example Fee by Stages Agreement
- I will research the merits of your case and write an opinion. Fee: $350.
- If your case is meritorious and collectible, my fee is 1/3 of the recovery.
I will credit the $350 against my fee.
- If your case’s merit or collectibility is uncertain, you may retain other
counsel with no further obligation. You may also proceed with me, as
set forth below:
- Draft complaint. Fee: $350.
- Law and motion appearances (prior to answer): $375 each.
- Propound or answer written interrogatories: $150 per set.
- Deposition preparation and attendance: $300 per deposition
of less than 4 hours, $650 per deposition of 4-10 hours.
- Trial appearance (5 days estimated): $750 per day.
- All other services: $100 per hour.
- You may stop using my services at any stage by notifying
me. However, if I accept your case on a contingency basis,
CCCBA Solo Section
How to Open a Law Firm
November 22, 2013
Page 7 of 10
and you subsequently discharge me, my fee will be the
any offers received prior to or within 5
$100 per hour.
VI.
BILLING (cont.)
VII.
greater of: 1/3 of
days of discharge or
C.
The Initial Consultation: To Charge or Not to Charge
D.
Charging a Reasonable Fee: Unconscionable Fee Factors
1.
Amount of the fee in proportion to the value of the services performed
2.
Relative sophistication of the lawyer and the client
3.
Novelty and difficulty of questions involved and required skill
4.
The likelihood, if apparent to the client, that accepting employment will
preclude the lawyer from accepting other employment
5.
Amount involved and the results obtained
6.
Time limitations imposed by the client or by the circumstances
7.
Nature and length of the professional relationship with the client
8.
Experience, reputation, and ability of lawyer performing services
9.
Whether the fee is fixed or contingent
10.
Time and labor required
11.
Informed consent of the client to the fee agreement
E.
Know Your Trust Account and IOLTA Rules
FILING AND RECORDS RETENTION
A.
Filing Styles
1.
Alphabetically, by client name
2.
Alphabetically, by adversary name
3.
Numerically, using an internal system
B.
Filing Every Day
C.
Records Retention after the Case Closes
VIII. TIME MANAGEMENT
A.
Manage Client Expectations
B.
Balancing Your Obligations
1.
Meetings: Schedule meetings only 2-3 days per week
2.
Try to coordinate all outside meetings
3.
Case work: Set aside 2 days per week as pure work days
a.
Do not see clients
CCCBA Solo Section
How to Open a Law Firm
November 22, 2013
Page 8 of 10
b.
c.
Accept only essential phone calls
Organize your office, develop templates, expand your skills
VIII. TIME MANAGEMENT (continued)
C.
Managing Telephone Calls
1.
Set specific periods during the day to take and make calls
2.
Encourage staff to answer inquiries when ethically appropriate, otherwise
to schedule an appointment for you and the caller
3.
Put information on your website, including FAQs, to reduce calls
4.
Keep track of calls in and out of the office
5.
Unless there’s an emergency, don’t take calls during meetings
6.
Use voicemail as a message center for you and callers
a.
Encourage callers to leave a detailed message, describing their
inquiry and providing a good time for you to return their call
b.
Leave a daily message outlining your schedule
c.
Link your office line to your pager or cell phone
D.
Managing Your Mail
1.
Outgoing mail: Send it daily
2.
Incoming mail: Date stamp and review daily
3.
Mail client copies
4.
Review mail before it is sent to the client
E.
Managing Your Calendar
1.
Use a law-specific calendaring and docketing program
2.
Develop a procedure to calendar deadlines
3.
Maintain your calendar in two separate locations
4.
Use “to do” lists and carry-forward uncompleted projects
5.
Establish a procedure to review open filings periodically
F.
Preparing for Vacation
1.
Call major clients in advance and ask if they anticipate anything
2.
A month before departure, review practice
a.
Make a list of things that must be done before you leave
b.
Make a list of things that it would be nice to have done
3.
Review your calendar to ensure that statute of limitations will be met
4.
Two weeks before departure, cut down on appointments and appearances
5.
Ensure your files are well organized and filed in the filing cabinet
6.
Bill as much as you can before you leave to avoid cash flow crunches
7.
Arrange for checks to be deposited in your absence
8.
If possible, avoid issuing trust checks during your absence
9.
Advise your clients and opposing lawyers you will be away; give them the
name and phone number of the person they should contact in your absence
10.
Ensure someone will handle urgent mail, notices, court documents, etc.
CCCBA Solo Section
How to Open a Law Firm
November 22, 2013
Page 9 of 10
11.
12.
Do not schedule anything for the first two days after you return
Don’t take work with you, even reading related to work. Relax!
VIII. TIME MANAGEMENT (continued)
G.
IX.
X.
Tips for Improving Your Time Management Skills
1.
Start your day with an action plan
2.
Take one action a day toward achieving your longer-range goals
3.
Prioritize your tasks
4.
Delegate responsibilities
5.
Investment in systems that support your work
6.
Learn to control interruptions
7.
Keep track of your contacts
8.
Learn to communicate - and ask questions now
9.
Invest time in learning to use helpful technology
10.
If you are lucky enough to have a staff, learn to work as a team
INSURANCE
A.
Lawyer’s professional liability (malpractice or errors & omissions) insurance
1.
Prior acts coverage
2.
Coverage limits – per claim vs. aggregate
3.
Deductible – self-insured retention amount
4.
Exposure factors
a.
Danger of personal exposure
b.
Degree of risk in practice areas
c.
Size of transactions and scale of exposure
d.
Individual claims history
5.
Cooperating with insurer
6.
Dealing with clients involved in claims or problems
B.
Health Insurance
1.
State Bar of California
2.
Kaiser
TECHNOLOGY
A.
Assessing Your Needs
1.
Technology you have vs. Technology you want
2.
Set a replacement timetable, budget, and prioritize
3.
Include time and expense of training
B.
What’s New, Smart, and Cost Effective?
C.
Leasing vs. Purchasing
CCCBA Solo Section
How to Open a Law Firm
November 22, 2013
Page 10 of 10
A WORD TO THE WISE:
CLIENTS YOU WILL WISH YOU AVOIDED
1.
His first question is “How much do you charge?”
2.
She tells you that someone else charges less.
3.
He switched lawyers. Unless he has a good reason, he probably won’t like you either.
4.
She insists on telling you her whole story and wants legal advice over the phone or email.
She won’t come in for an appointment. She wants something for nothing.
5.
He balks at paying a consultation fee or fee advance. He wants something for nothing.
6.
She shows up to your office with documents in a garbage bag and wants you to sort them.
7.
He repeatedly makes excuses for failing to provide you with documents, or better yet, he
tells you that he decided you don’t need those documents.
8.
She blames her problems on everyone but herself. You will be to blame someday.
9.
His anger is disproportionate to the wrong committed.
10.
Her primary motivation is revenge.
11.
He is holding out for a miracle. Chances are, you won’t provide it.
12.
She is unwilling to listen to a realistic appraisal of her prospects.
13.
He insists that you predict the outcome or cost when no such prediction can be made.
14.
She degrades attorneys. She has unrealistic expectations.
15.
He will never be satisfied, no matter how good of a job you do.
16.
You don’t like her. She will sense it and come to resent you. You will resent her. Then
she will stiff you.
17.
He says, “It’s not the money. It’s the principle.” Few clients are willing to pay whatever
it costs to pursue a principle.