Toutes nos excuses. Cet article n'est disponible qu'en anglais.
By the end of your first or second year, you may be struggling financially, you may be saddled with clients who don’t pay, you may have an unproductive assistant you’re reluctant to fire, and you may be feeling like a failure because you haven’t been able to make your firm work. At what point do you cut your losses and give up?
A few thoughts to consider before throwing in the towel:
1. Share your difficulty.
Though you may feel embarrassed or ashamed, share your struggles with other practitioners. If you can’t face colleagues, set up a consultation with your law society’s law practice management advisor or send an anonymous SOS to a listserv.
The other day, an anonymous solo posted a “help-me-save-my-practice” e-mail to the solosez listserv. Within hours, list members inundated him with suggestions, encouragement, and — most helpful —marketing and management ideas he had never considered. A week later, he reported having implemented some of the changes, and the tone of his follow-up post was decidedly upbeat. In a few months, I fully expect this solo to report that he’s turned his business around.
2. Evaluate what’s working and what’s not.
Look at the cases you’ve handled during the past year. If you simply haven’t found enough clients to pay the bills and you’re worried about cash flow, consider a temporary contract assignment or other “fast cash” options.
On the other hand, if you’re tied up with clients who’ve promised to pay and haven’t, drop the worst offenders rather than continuing to work without pay. Working for free is demoralizing and saps your will to market your practice. When you fire non-paying clients, your morale will improve and you’ll have more time to engage in marketing to build your practice.
Sometimes, it’s a not lack of clients that account for financial struggles: it’s too much overhead. Scrutinize your costs closely: are you paying for Class A office space when you could save several hundred dollars a month in a less fancy building? Is a big chunk of revenue going to staff salaries without return on investment? For example, if an associate’s salary and benefits cost you $50,000 but the associate only generates $35,000 in revenues, you’re losing money.
Many lawyers are reluctant to downsize because they view their fancy building and staff as a symbol of success. And often, lawyers are too kind-hearted for their own good, and feel badly about laying off employees, even if it’s an economic necessity. At junctures like this, you must evaluate your expenditures from a purely financial perspective, without allowing your personal feelings about status or helping others to intervene. If you can’t make these changes on your own, consult with a practice-management consultant for an objective viewpoint.
3. Have you tried everything?
Perhaps you’ve shrugged aside certain marketing options, thinking “that won’t work for me.” Is this a logical evaluation of a particular marketing technique, or is it an excuse to avoid techniques (like cold calling) that make you uncomfortable, or that involve longer-term commitment (like blogging) than taking out an ad? If this is about avoidance, it’s time to own up and get moving. The future of your firm is on the line; now’s not the time for timidity or procrastination.
4. Set up a plan.
A failing practice takes a psychological toll. You feel trapped or stuck in a rut, powerless to make any changes. To break through, create a list of actions to turn things around, such as making some cold calls or touching base with a colleague. If you can’t muster up the nerve for daily phone calls, then start by sending out e-mails or attending a networking event. Just do something each day. Your actions will help will go a long way towards getting your practice on the right track.
5. Give yourself time.
Realize that your business will generally ebb and flow until you hit your stride, which may not happen until your third year of practice. So unless you’re truly hemorrhaging cash and risk bankruptcy, keep plugging away.
6. Beware the hard sell.
When business is bad, you’re particularly vulnerable from consultants and referral services. If you genuinely believe that a consultant can benefit your practice, seek low-cost options. Some consultants offer reasonable group rates, while others will charge a flat fee of a few hundred dollars for a practice tune-up.
As for for-fee referral services, try to negotiate a limited trial period of two to three months, rather than locking yourself in for a year. The last thing you need now is the added stress of an extra few hundred dollars a month for a referral service that doesn’t generate any clients.
7. You haven’t failed.
Perhaps you’ve reached a point where despite your best efforts, you can’t find enough business to sustain your practice. Or maybe you found work, but you’re not earning enough to support your family. You haven’t failed.
You had the guts to take a leap that few lawyers are willing to take, and you gave it your best shot. Along the way, you taught yourself new skills that you never learned in law school or at your job — drafting a complaint, taking depositions, arguing motions, negotiating contracts. You served clients and solved their problems, perhaps even changed their lives or improved their opinion of lawyers. And you created a something — a law firm — out of thin air, with your law degree and your own two hands.
Perhaps your firm did not survive, but no one can ever take away what you accomplished. Everything you learned in the process of creating and running a law firm will stay with you and serve you moving forward, either in a career in law or another profession. That doesn’t sound like failure to me.
Carolyn Elefant is a sole practitioner in Washington, D.C, who specializes in energy regulation work. She is the owner and operator of MyShingle.com, a leading blog for sole practitioners, and is the author of the new book Solo By Choice: How to Be the Lawyer You Always Wanted to Be, from which this article is excerpted.