Thoughts After Six Years

Law Practice

Six years ago today, my partner and I — fugitives from BigLaw — opened the doors to our new firm. We had rented desks, lots of boxes, phones that occasionally worked, and a ingrained distaste for big-firm practice.

Six years later, we've got more than a dozen lawyers and enough employees that sometimes I don't recognize them all, and they don't recognize me. Some of that is to the good, some is not.

A few things I've picked up about starting your own law firm in six years:

1. When you're at a big firm, and a partner or associate isn't working out, you can find someone else to work with, either on an emergency basis or in the long term. At a small firm, you're stuck with what you've got, unless you want to go through the unpleasant and sometimes expensive business of firing and re-hiring. So: invest a lot of time in interviewing and vetting the people you hire. Follow up on references. Use connections to get the inside scoop on people. In a small shop, you've got no choice but to rely on them.

2. If BigLaw has infected you with school snobbery, it's time to grow up and get over it when it comes to hiring associates and partners. Plenty of fantastic lawyers didn't go to Harvard, Yale, Stanford, or Chicago. Some of our most standout lawyers have been people who would have a lot of trouble even getting an interview at BigLaw because they didn't to a top-50 school. But their "second-tier" or "third-tier" school taught them more about actually doing competent legal work than the ivy-festooned schools, which tend to focus on training people to teach other people about the philosophy of law. They need jobs, they're just as capable of excellent work, and they won't arrive with the entitled attitudes that some ivy refugees get. That's your competitive advantage over BigLaw. Use it.

3. The time you invest in your associates — showing them how to do things right, giving them lots of feedback on their work, and explaining why you are doing what you are doing — pays back tenfold in the long run. If I spend 100 hours this year painstakingly training up an associate, that's about 500 fewer hours I have to spend next year on writing first drafts of stuff myself, because that associate is going to be trained to do things right the first time, and is going to develop into someone whose work I can trust.

4. Turnover is killer, and retention is key. Unless you're in extraordinary circumstances, you're not going to be able to match BigLaw salaries. Don't pretend to try — particularly in this economy. People will stay with you at a fraction of the salary that BigLaw pays if you give them what they can't get at BigLaw: decent and respectful treatment, no bureaucratic bullshit, more reasonable and honest billable hours requirements, and access to significant work. Let them wear jeans, for God's sake. Make it clear that as long as they get the work done and they're available by email and return client calls, you don't care what time they come in or leave. Order in lunch a lot and have the whole firm eat together. Handle minor legal matters for their family and friends for free — because you take care of your people. That sort of decent treatment gets a type of loyalty that BigLaw's ludicrous salaries never will.

5. Small firms and new firms tend to be very nervous about bringing in business. Never lose sight of the fact that the most important way to keep business coming in is keeping your clients happy through quality work and responsiveness. If your economic model depends on high volume rather than satisfied customers, you're running a mill, not a firm.

6. As soon as you can afford it, hire someone to handle HR and office-management crap. You'll be amazed at the number of hours you get back, how much of a relief it will be, and what you can accomplish in those hours.

7. Find friends and colleagues who have opened small firms and take them to lunch to pick their brains for pricing information. The first few times you make a flat-fee offer, you may either price yourself out of the market or take a bath. Ask for help learning the economics of it.

8. Sometimes you'll make more money turning a case down than taking it. Listen to your gut when it tells you a prospective client is a crank, a nut, or a con-artist. If they've cycled through three or four sets of lawyers, and they're bad-mouthing them all, the problem might be with the client.

9. If you can't have drinks in the conference room at 4:30, or close the office and take everyone bowling, or take a pro-bono case just because you want to, why did you start your own shop in the first place?

Last 5 posts by Ken White

23 Comments

23 Comments

  1. TJIC  •  Jun 15, 2011 @12:55 pm

    Great points.

    Nine years running a business in the tech sphere taught me pretty similar things.

  2. Ravious  •  Jun 15, 2011 @1:20 pm

    Loved reading this. Gives me hope.

  3. shg  •  Jun 15, 2011 @1:25 pm

    I just got off the phone with the ECF guy from SDNY because my info was wrong. He asked me if I was Meyer & Greenfield, my firm from 1982 through 1992. Poor Meyer died a few years back. I laughed, as I remembered M&G. Meyer had cocktails in the conference room at 1:00, and ocassionally forgot he was expected back in court at 2:00.

    Good times. That firm will exist in perpetuity in ECF and my memory. Happy 6th Anniversary, Ken.

  4. Grandy  •  Jun 15, 2011 @1:26 pm

    2. I'm almost inclined to call this "recognizing a market inefficiency". I suppose it boils down to whether you are getting access to some of these candidates before Big Law because you tossed aside school-bias (the polite term for it).

    It hits home for me because it affects me. I got my 'puter educating done at a school nobody here has ever heard of except by way of my mentioning it. But I got a quality education there that was probably a little more practically focused than similar curricula at other schools. The benefits of that don't paralell exactly to what you hint at (there are parts of compsci theory I never got much exposure to that I wish I had been exposed to, e.g.).

    4. I can't sing it strong enough (as the poet once said). Treating people poorly is so counter productive. My current job stands in stark and better contrast to my old job. In the old the irrelevant minutiae mattered. Here they do not. And yet I'm more productive at my new job. Imagine that.

  5. Patrick  •  Jun 15, 2011 @1:28 pm

    [NOT THE POPEHAT PATRICK, but don't feel like changing my commenting handle... its so original]..

    "Some of our most standout lawyers … didn’t to a top-50 school. But their “second-tier” or “third-tier” school taught them more about actually doing competent legal work …"

    So you have a bias against 4th tier schools, huh? (Full disclosure, I am a 4th tier grad whose alma mater has since skyrocketed to top 100).

  6. Ken  •  Jun 15, 2011 @1:31 pm

    I didn't remember there were four tiers. But one of my star associates went to a school not in the top 100.

  7. Nathan  •  Jun 15, 2011 @1:38 pm

    Happy anniversary! Excellent points all, advice I hope to follow.

  8. jb  •  Jun 15, 2011 @2:22 pm

    As an accounting student at a solidly 2nd-tier school, I hope the same holds true in my field. My goal is to work for, and later head, the accounting version of your firm, for the reasons you describe here.

  9. b  •  Jun 15, 2011 @2:27 pm

    Beautiful, brilliant advice all around. The small consulting firm I work for has earned my loyalty not via stellar salaries but by techniques similar to what you describe–if not as casual an environment, I admit.

  10. Ken  •  Jun 15, 2011 @2:28 pm

    I don't want to OVERSTATE how casual we are. Let me clarify, lest you worry, that I am currently wearing pants.

  11. Dave  •  Jun 15, 2011 @2:49 pm

    Great read, Ken. It's very impressive what you guys have accomplished!

  12. Scott Jacobs  •  Jun 15, 2011 @3:08 pm

    Sounds like a wonderful place…

    Ya hiring? :)

  13. Piper  •  Jun 15, 2011 @4:34 pm

    Congratulations on making it through the first six years in a (more or less) sane state! I think I recall a post from when you were just starting, so it's kind of fun to see how well it's worked for you. Congratulations!

  14. ElamBend  •  Jun 15, 2011 @6:07 pm

    Congratulations on six years. I have a real estate business and the insights of no. 3 and no. 4 loom large currently. Ironically, come September the two years six months I've had this business will make it the longest lasting job I've had since graduating law school.
    Of the jobs I had, one company let me go [with severance!] only to fail a few months later. Another company let me go after only a year in a cost cutting panic after the chaos of the fall of '08 (they may have been making the right move – but the sunk costs from hiring me must have been tough because it included a fee to a recruiter along with a year of salary).

    Working for myself in a business that I didn't choose has been tough, but any fantasies about a regular job with a steady pay check are tempered by my past experience. I learned as much about what not to do as I did good practices. The biggest were: 1) take care of your people, especially those with special skills because they won't be as easy to replace as you might think, 2) always communicate with your partners, especially the bad news, and 3) if something is failing, accept the failure and try to fix it, don't try to paper over it.

    The last two may seem like no-brainers, but I watched one company with a good reputation ignore those rules right into commercial and personal bankruptcy.

  15. Michael  •  Jun 15, 2011 @6:38 pm

    Thanks for sharing this update, truly inspiring and full of wisdom.

  16. InMD  •  Jun 15, 2011 @6:47 pm

    Someone should e-mail this to my former employer. If anyone could stand a lesson in running a law firm it's him.

  17. Linus  •  Jun 15, 2011 @8:06 pm

    I used to work at a small law firm that did not follow your advice. Trouble was,I was wet behind the ears and didn't know there was another way to do things. After several years of bureaucratic nonsense and insane hour expectations, I wised up. Wish I'd read this 3 years ago.

  18. Ansley  •  Jun 16, 2011 @12:33 am

    Congrats, friend!

  19. RB  •  Jun 16, 2011 @9:55 am

    Nicely said. Having had a business fail for a number of reasons both micro and macro, my hat's off to you for making it work in a tough business.

  20. Tom Patterson  •  Jun 28, 2011 @2:55 pm

    Congratulations on six years. One trick in running a small firm is to keep the bureaucracy away as you grow. Getting and keeping good people is a key to that. Congrats again.

  21. Ken  •  Jun 28, 2011 @3:02 pm

    Someone just linked to this from someplace, but I can't tell where the traffic is coming from. Odd.

  22. Robert Clark  •  Jun 29, 2011 @6:35 am

    TechnoLawyer linked to it.

    Not all people are cut out to be bosses. It sounds like you and your partner enjoy that role and invest your time in it. Being a great lawyer or great anything doesn't correlate into being a great boss/business owner/risk taker. It is a special set of skills that can be learned but probably work best for those that have that natural leadership inclination.

    I salute people brave enough to start a business and cheer when they succeed. As a stickler for rules and the bottom line I can learn from your "take care of the small legal items for employees and their families" etc.

    The only objection I have is that there is a place for firing people. We are not doing society a favor by putting up with "a wrong fit".

  23. Ken  •  Jun 29, 2011 @9:22 am

    Thanks, Robert. TechnoLawyer must have linked on some secret part of the site, since I don't see it.

    I agree that the skills that make a good lawyer don't necessarily make a good boss. We have some lawyers who make great trial lawyers but whom we would not give management duties. They're happier with that.

    Here's the thing about taking care of those small legal matters for employees' families: often it involves a negligible amount of time and expense, but done respectfully and forcefully, it conveys a team spirit more powerful than a bonus in the same amount those hours would have cost.

    Yes, there's a place for firing. We've done it. We'll do it again. But I was in too cheerful a mood to write about it in this post. Another time.