Practice Management

What small firms really should not looking to hire staff and space.

I have nothing.  I do not have any of the trappings.  In fact, my diplomas are under my bed.  But, I do not care.

I have learned to hire staff is to lose time, energy and capital on hiring and rehiring people.  You lose money in pay, you lose money in the time you spend managing instead of working, and you lose money in the lost business caused by the confusion of it all.  My point is that the money lost is bigger than your think.

I have succeeded, the the extent that I have, by preparing my small firm to endure the tough economic times.  I look for creative ways to accomplish my goals on a budget that is more than reasonable.  This is because I have learned that staffing, and office space and  the the trappings of a law firm reduce what you actually bring home during good times, and these things will bankrupt you during bad times.

Sure more traditional lawyers will tell you that if business falls they will downsize as needed, but that is not completely true.  Long term lease agreements on office space, copy machines, computer equipment and the like will not allow it.  But, the truth of the matter is that you do not know you are entering tough economic conditions until you are a long way in.  Just because business was not go this month, does not mean business will not be good next month.  My point is that bad economic times are only noticeable from a historical perspective.  By then the credit cards are maxed, and you have already drown in lost money and opportunity.

So, I work from home, because I am going to pay my mortgage regardless of whether I have other office space.  Office space runs between 20% and 30% of most law firms in addition to home mortage of most small law firm owners.

I have no staff and I pay no salaries.  But, I do not work alone.  There are other lawyers, but we do not operate as a law firm per se.  I substitute what I do by breaking my typical case into its component parts and deciding what it is I do best, and the legal talent I need for the rest.  Once the DNA is correct, the case progresses a certain way.  I am not left doing everything, I have some backup, but I do not have the overhead.  The case recovery is broken down as well and when the money goes into escrow it is divided out.  Each person works from their location as a team and we try to get together for fun between every couple of weeks to a month.

Here are some of the benefits.  I have very few management headaches or time wasted.  I do not have to invest in any office space, any furnishing or any tech or any software for any employee.  I pay no salaries, and hence have to do very little reporting or withholding.  Sure, I probably make a little less during the best of time dividing revenues than paying salaries, but I never ever fall into a situation where I am not earning money, but still having to pay overhead.  It is collaboration and it works best because since we only use lawyers, everybody believes they have a stake in the cases and their outcomes.  Everybody believes they have a stake in each other.  And, everybody wants to see me succeed because when I succeed we all succeed.  I, of course, want everybody else to succeed because when they succeed, I succeed.

It is really the best of all worlds.