The statistics on net income for solos firms is scarce, but is getting better. Last year CLIO released their 2016 Legal Trends Report based on data generated by its thousands of users. Here is on one their conclusions:
“Out of an eight-hour workday, the average firm collects payment on only 1.5 hours of billable time. These unit economics would be devastating to almost any industry, and they help explain why, despite charging an average of $232 per billable hour, the average small-to-mid-sized firm struggles to make ends meet.”
The Solo and Small Law Firm Compensation Report from Above the Law also reports that a quarter of solo practitioners make less than $50,000.00 a year.
There are many possible causes for the low income reported by solo practitioners. [For a different explanation see blog post by Carolyn Elefant ] .
My own theory is that many solo and small law firm lawyers don’t understand the difference between “doing law” and “running a law firm as a business.” Or as Mark Cohen puts it, there is a difference between “law practice” and “legal delivery.” There is a deficit of knowledge of how to create a sustainable law firm business model with a differentiated competitive advantage in the marketplace.
Help is on the Way
Help for solos and small law firm’s is on the way of consultancies that are responding to this need providing affordable law practice management advice to solos and small law firm that can turn around a failing practice.
Here is a short list of resources that I recommend:
Jared D. Correia, Esq., who runs Red Cave Consulting out of the Boston area has developed a unique approach to providing subscription-based consulting for solo practitioners. Jared A is a former practicing attorney and has been advising lawyers and law firms for over a decade. He is a regular presenter at local, regional and national events, including ABA TECHSHOW, and regularly contributes to legal publications, including his column, ‘Managing,’ for Attorney at Work, and his ‘Law Practice Confidential’ advice column for Lawyerist. Jared is the author of the American Bar Association publication ‘Twitter in One Hour for Lawyers’. He is the host of the Legal Toolkit podcast on Legal Talk Network. Jared also teaches for Concord Law School, Suffolk University Law School and Solo Practice University.
Solo Practice University picks where your legal education left off. For an initial fee of $265.00 plus $65.00 you get access to all courses within the Solo Practice University curriculum, Notable is the extensive curriculum in law practice management and technology for solo and small law firm practitioners. Want to learn more about virtual law practice? Consider taking Stephanie Kimbro’s course on Virtual Law Practice at SPU.
Another interesting resource I recently discovered is: Start Here HQ , based in Portland, Oregon. This advisory service comprises lawyers who practiced so they know firsthand the challenges lawyers face as a profession. The company’s goal is to help lawyers build scalable and sustainable practices and offers 1:1 coaching for individual attorneys. You can schedule a free introductory call at startherehq.com/schedule-a-call.
Another resource I have used are the marketing services of Chelsey Lambert from LawTechReview. Chelsey has developed a curriculum of courseware in law practice management and technology that provides unique insights on how to organize and implement your marketing program. Chelsey has worked with solos and small law firms for over a decade and served as a coach, consultant and trainer at the Chicago Bar Association as a Practice Management Advisor. Her programs and written resources have been shared at bar associations, and law schools across the country.
Law Practice Management Resources from Bar Associations
Don’t overlook bar association resources. Most notable are the products and services of the American Bar Association’s Law Practice Management Division. On demand CLE’s in law practice management can bring you up the learning curve quickly. See also Law Technology Videos.
Many state bar associations have law practice management advisors that provide free advisory services to members and offer educational programs in law practice management and technology. Here is a convenient list of law practice management advisors at state bar associations. See this list also from the ABA.
The Florida Bar’s Practice Resource Institute – has a new venture to train lawyers in law practice management and technology skills. See How to Start a Law Firm courseware. Also check out: Michigan Bar’s Practice Management Resource Center and the New York State Bar Association’s Programs in Law Practice Management.
Law Practice Management Vendor Resources
Vendors of law practice management software offer first-rate free educational resources. See for example:
Clio’s Resource Library
RocketMatter’s Productivity Blog
Free Webinars from MyCase
LEAP Legal Software: Start Your Own Law Firm Guide
DirectLaw’s Digital Lawyering Institute
The path to success for solos and small law firms is paved with learning about new technologies, new business models, new marketing methods, and new ways of delivering legal services. As professionals, lawyers are tasked with re-inventing themselves every decade. Continuous learning makes us “professionals.” Keep learning or die!