Practice Management

As Kinky Friedman would say, "Why the hell not"!

Whether you are wanting to go out on your own or in with a few other attorneys, whether you want to start a traditional firm or just collaborate, or whether you wish to establish a Third Wave practice or something more traditional, a downturn in many aspects might be the best solution.  And, let us face facts, it might be the only reasonable solution as other law firms cut jobs and law jobs become harder to find.

But, there are also advantages.

1.  As real estate markets slow, office space becomes less expensive and more competitive.  This is true if you are looking to rent an office directly, or care to find space with a group of attorneys who have an extra space.  In bad times attorneys move out of space that they were renting from other lawyers, which means there is more space available at cheaper prices for you.  And, renting from other attorneys can buy you some referral business.  Also, if you want to consolidate your operation at home, residential properties are becoming cheaper and more competitive as well.

2.  Need employees?  In a downturn layoffs, a soft market, or legal professionals who want to end long commutes which costs money and time make it cheaper and easier for you to find qualified assistance.

3.  Accessories such as office furnishings become both more plentiful and cheaper.  Those expensive ergonomic office chairs that look so cool and sell for hundreds of dollars a unit can often be found for maybe a $100 just slightly used.  Good used office furniture starts to go for pennies on the dollar.  New furniture is more competitive as well.  The same goes for electronics.  Need a new car?  Well, I rest my case on that point.

4.  The biggest obstacle to building a practice quickly is that potential referral sources have other professional relationships.  If you are a real estate closing attorney, for example, you probably need Realtors and bankers to refer you business.  In good times relationships have not a lot of reasons to wither.  When money is good, relationships are tight.  When money is not so good, everyone starts to look for alternatives.  It is easier to establish new relationships that will lead to referrals and business when times are economically tougher.

5.  If you need to market your practice, there is nothing to reduce advertising costs and other marketing costs like the media not having enough business or buyers of its space and time.  Ad rates are going to fall.  There is also less advertising as more establish attorneys and firms fall on harder times and cut back, meaning your message is competing with fewer alternatives.

6.  The other thing is that you really do not have anything to lose.  Your competitors might be losing business and that might be hurtful to them.  But, you do not have business to lose.  You just have everything to gain.  It is more of a zero sum gain for you for every new client that walks in the door.

7.  Downturns are not bad for all areas of law.  Again, if your practice area is real estate closings, there might be less of those.  But, if your practice area is consumer bankruptcy there are likely to a lot more of these.  The same with family law and personal injuries.  So, it depends.

I personally think you need to develop a practice and referral relationships during the down times so you can ride it to the top when the market corrects itself.  It is fun riding to the top.  It is a lot harder starting in good times, in a more challenging market in many ways, only have an opportunity to ride the market down.  Start new and build your cushion going up, and you can withstand the lower markets later.