Everything I Wish I Knew Before I Hung My Shingle!
By Christa Haggai-Ramey
My friends used to tell me that I would certainly “go out on my own” before anyone else did in our law school class. I, on the other hand, did not believe that I had that entrepreneurial spirit. More importantly, it is a scary prospect – keeping up with monthly expenses, having to carry your own insurance and making payroll, just to name a few. I was not sure I had it in me. However, I guess my friends knew me pretty well. I love being my own boss.
Immediately after law school I went to work for a large established Plaintiff’s firm. I was one of two women attorneys in their litigation department. I was also the youngest attorney by a mile. We did not go to trial too often but when we did, the cases were tried, of course, by the partners in the firm, most of whom did not want a “second chair” during trial. Then one day a partner I did a considerable amount of work for told me that one of my smaller cases was mine – really mine, including any trial! I was excited… conventional wisdom be damned. I was a two year lawyer about to try my first case, or so I thought. I was then later told that a more senior attorney with the firm (10 years in practice) would be trying the case with me. He would be the first chair and, I would be “second chair,” basically taking the portions of the trial he did not want. By the way, this was going to be his first trial as well.
Now this case was a dog. The workers’ compensation lien was going to eat up most of any verdict or settlement in the case. However, we were downtown before Judge Elias, who had just recently been named CAALA’s Trial Judge of the Year. The MSC was a disaster. My “partner” and I realized quickly we needed to settle this case or our first trial experience would result in total embarrassment. Certainly not the first trial experience I wanted to have. We lucked out – we got a deal on the comp lien and were able to settle the case! Crisis averted. But, I still did not have my first jury trial.
But, how was I ever going to get my first trial? I am a trial lawyer after all. All I have ever wanted to do was argue a case before a jury. I knew that I needed to go to a smaller firm; surely there I would get an opportunity to try a case. Nope. The lawyer whose name is on the shingle is going to try the case. Darn it.
Soon my husband began to tell me things to inspire my entrepreneurial spirit – “Christa, with risk follows reward.” “Christa, you will never be truly happy until you are your own boss.” “Christa, you can do this.” The day I started on my own, I had no office, no staff, no supplies, no cases, and no prospects! How in the world will I make it? “Christa, if you build it, they will come.” (John’s loves baseball movies!) So now I am here six years later and I am not bankrupt (thank the Lord). So, hopefully I can pass along to you everything you need to know, that I did not know, when you hang your shingle.
My business model is far from traditional. I have set up a Plaintiff’s practice and a “contract attorney” practice – all in one. I wanted to have a significant amount of contract work to “pay the bills.” Also, I marketed myself originally as a “second chair” for trial. In the beginning I worked from home, kept a low overhead, and, somehow, it worked. Then in 2006, my husband left his firm and needed my help. I decided to move my practice in with his new business. The idea of sharing space and some cases with his firm made a lot of sense at the time. At the time, I was in need of setting up a traditional law firm. John was still with his old firm and wanted to start working at the new place on day one! John and his new business partner made the decision at the end of September that everything needed to be ready and fully operational by December 1st. I had very little time to make it happen and no idea how many “people” I would need.
You all know how to practice law. But, most of us do not know how to operate a business well. I am not sure whether I can tell you everything you need to know about hanging a shingle. But, I will let you know what I have learned.
Finding the Right Space
Family is an important part of our lives. We are “work to live – live to work” kind of people. Therefore, we knew that we wanted our business within a few miles from our home. We did not want to add a long commute to our work days. We live in Westchester. So I began my search with buildings in the Howard Hughes Center, along Century Boulevard near LAX, and on Rosecrans and Sepulveda in El Segundo. I was calling numbers on buildings and making appointments to see space. This took up a considerable amount of time. In hindsight, I would recommend using a broker. A broker helps negotiate your lease agreement at no cost to you. They will seek a market commission or standard related fees from building owner as Tenant’s representative from the building selected by tenant. More importantly, they know the market.
When you are looking at space, it is helpful to find space that is already built out and suits your needs, with secretarial bays, offices, conference room, server room and kitchen. However, this may not be available. You will likely need to get tenant improvements (TI) made to your space, and in most cases you can negotiate a TI budget from your new landlord. In today’s market, you should be able to negotiate a substantial TI budget with a longer lease agreement.
You will also have more luck looking in more non-traditional areas, in terms of negotiating the best price and improvements you need. If you are looking downtown, Century City, Beverly Hills or West Los Angeles, you will pay more per square foot for your space. You need to determine if it makes sense for you initially to have that “good” zip code. The money you save on your rent adds up over time. In addition, there are different licenses and taxes for different cities. The difference in costs can be as much as $4.50 per square foot or more! Most personal injury clients do not care if your office is in Beverly Hills or Glendale.
You will also need to set aside money for office furniture, which can be a substantial expense. We ultimately chose to have our furniture made for us, rather than purchasing traditional furniture. You spend most of your waking time in your office and, therefore, will want a nice space to spend this time. Additionally, we ultimately saved a considerable amount of money having our furniture made. Further, we were able to find used cubicles for our support staff and filing cabinets. There are several places that have warehouses full of used offices furniture. You may also check with your building. When places close up or downsize they will have fire sales to get rid of excess furniture.
We ultimately found a place without a broker, by the middle of October. We needed significant TI, building out a conference room with a glass wall, building out a kitchen and a file room. Our people could not come in and begin wiring the place for phones and computers until this build-out was complete. Our new landlords assured us that we would be ready by Thanksgiving, allowing us plenty of time to complete everything else by our December 1stdeadline.
On the Monday before Thanksgiving, I stopped by to check the work in progress. I was surprised when no one was there working. I went to the building office where I learned that the City shut down the construction. Apparently, in order to complete the work on time, the building thought it may be better to skips some steps, such as getting the appropriate building permits. Of course the City found out and construction came to a halt.
When you are making all of the arrangements, you need to make sure you are involved in the entire process. Make sure you insist that no corners are cut. If deadlines cannot be met, they need to be honest with you so that you can make the appropriate adjustments in your scheduling. Be involved and pay attention. If you cannot do this, make sure you hire someone who can. I assure you that opening the firm can amount to a full time job.
Some of you may choose to go a more non-traditional route, like I did initially opening up my business. If you do not have a book of business with either hourly work or significant family wealth, you may look for alternatives to leasing your own personal office space. There are several options in this regard. There is the Fegan Suite (or similar set ups) that have a shared receptionists, copying, scanning and conference rooms. There are many law firms who have an additional office and secretarial bay for lease, with conference rooms available. There are virtual offices available. There is also space for time arrangements that can be made with folks. All of these alternatives can be very attractive to a solo practice.
A Fegan Suite, or similar set up, may be an attractive way to go if it is just you or you and a secretary. However, these arrangements can be expensive when all of the costs are added up. You will pay for your office itself, any storage space you need. In addition, there are usually fees for the use of copying and scanning, which can add up fast. Also in most cases, the use of the conference room is not usually included in your rent. There are additional fees for this. What is more you are often competing with dozens of suite-mates for the use of the conference room. Therefore, last minute appointments and depositions can be problematic.
A better arrangement may be to find space with another small firm or to rent an office from an existing firm. I see postings constantly on the CAALA listserve for office space for lease, and sometimes for as little as $1,000.00 per month. If you move in with a firm with folks you know, this may provide you with a much more pleasant working environment as well as saving you some money.
An alternative to a Fegan Suite or leasing an office from an existing law firm is a virtual office. For a small fee you can have a mailing address and a conference room for meeting clients and taking depositions. In this set up, you will actually work in a home office. Working from home takes an incredible amount of discipline. If you set up from home, you will still need a fully functional office, including a dedicated phone line, dedicated fax line, copier, scanner, and of course computer.
Finally, if it is just you without other attorneys or support staff, it may make sense to look for space for time arrangements. I would not recommend this situation. Rent is not that much and your time is very valuable. It is difficult to determine how much work you should perform for someone for the use of an office. My main concern with
Your building will tell you most of what you need because they will require proof of insurance for general liability. In addition to a general liability policy, you will also need workers compensation, which is required by law if you have employees. I would also recommend employee liability policy. Most importantly, you will need malpractice insurance.
Using a broker will simplify your life – and will help you with all of your business insurance needs. They will help you find the right insurance for your practice. A good broker will be able to find you the best prices and, best of all, it is one stop shopping.
If you are opening up your own space, you will need to set up your own phone and computer lines, the building does not necessarily wire everything up for you. We hired one company, Shafer Computer Solutions, who took care of the wiring for the phones and server. But, more importantly, they set us up with another broker who handled getting the proper phone equipment.
The phones are much more important than you might initially think. Are you having a receptionist answering the phones? Do you need an automated receptionist? Do you need conferencing abilities? Do you want a phone that will track your calls for billing purposes? There are really a lot of things to consider.
We used Budgetel to set up our phones and fax machine lines. We use Broadwing (Level 3 Communications) for our phone and internet. We were able to set up client codes for billing purposes when using the phone. I really cannot tell you what you should or should not get for communications other than to tell you to hire people to tell you what you need that you trust!
Initially, I recommend leasing this equipment because there is no money coming in for a few months. You want to keep your operating expenses down. After you have been established then I recommend purchasing because its more cost effective.
Computers, Server Printers Copiers
We decided to have laptops for our attorneys and desktops for everyone else. We wanted to make sure our attorneys had access to our servers when they are out of the office. The costs of laptops are more than desktops, but it made sense for productivity. We also initially leased this equipment, but have now purchased everything. To lease a laptop you pay $60.00 a month with warranty for 3 years for a total of $2,160.00 as apposed to purchasing one for $1,500.00. Desktop computers are less expensive. You can purchase for $800.00 as apposed to leasing for $40.00 a month.
When I was first thinking about what we needed, I figured I would just go onto Dell’s website and order everything – done! No! I did not realize all I do not know about computers. For instance, servers are much more complicated that you might imagine. You also want to make sure you have the appropriate back-up system. I also needed to set up three server drives, one for my firm, one for my husbands firm and one for administrative. We hired Shafer Computer Solutions. Alan walked me through what we needed, including a server.
We had the computers ordered and delivered several weeks before we opened. Now you may recall that we had some construction issues. Therefore, we had no home for all of our new computers and we needed to get them set up. We brought in several tables to my garage and went to work fortunately my wi-fi connection at home is powerful enough to reach the garage.
I cannot recommend enough that you must hire the right consultant to make sure you are getting what you need. Shafer also set up our remote access so we can log on wherever we are to retrieve documents and programs from anywhere. We do not pay them a monthly charge for their services; rather we pay as we go.
Software and Legal Research Needs
I needed to be able to work with any office, since a large percentage of my practice is just that. Therefore, I needed both Microsoft Word and Wordperfect. I would recommend that you also do this. It is not that expensive to have both. And many firms have Word now as their word processing software. We also did the whole Microsoft Office Business suite, which will include Outlook for your email accounts, Powerpoint and Excel. You should also need to consider is Adobe Professional – not just the document reader. You will need to create and edit PDF files, whether or not you know this now. Any documents I share with opposing counsel, I will convert it to a PDF before I email it.
You also need case management software. We use Abucus to manage our cases and accounting. Scott Crowin, will discuss in greater detail abut accounting software. However, I will say this; I like our accounting software because it pulls from our case management software. This way, I do not have to worry about compatibility issues. It makes sense for us. A good case-management software will manage everything you need. For instance, as soon as we put a case in the system, we automatically have reminders set for everything, including statute of limitations. Once we receive a trial date, it updates with those reminders as well. It cannot be overstated; you should not manage these dates manually, because something inevitably will slip through the cracks.
All of the Judicial Counsel forms are available on line for free. However, we like to manage our documents, save and edit them in ways that you just cannot do when you are using them on the court’s website. Therefore, I recommend ProDoc for this need. Legal Solutions is no longer servicing and updating the software. ProDoc’s automatically saves your forms to a pdf file. The software is fairly intuitive and easy to use.
You no longer need a library of any kind. Everything is available online. The only books I still have are a copy of CACI, for when I am in trial, and an All-In-One Code Book. You will need legal research, including case law, codes, rules practice guides, and jury instructions. Lexis Nexis has all of the jury instructions, codes and rules on disk, which you can load and update on your computer. I highly recommend purchasing this software. It is really easy to create your jury instructions, rather than cutting and pasting. It saves a lot of time for you and your personnel. In addition, it has the added bonus of having all of the rules of court and code section included.
We did have Lexis online legal research, we have purchased all California, plus Supreme Court, Ninth Circuit and Cal Federal cases. At one time we had jury verdict search, but it was too expensive to maintain. Accordingly, we had to drop that service. We have the Daily Journal; therefore, we can get some jury verdict searches through their website. We have not really settled on the best verdict search to suit our needs. This one is still a work in progress. I do think it is important to be able search verdicts.
Now we have Westlaw Next. I am very pleased we made the switch. Westlaw Next even has a iPad application, which makes it very easy to browse jury instructions while in trial, search case law when you are not in your office. It simplified my life for sure when it comes to the needs of having access and being mobile. Westlaw matched or beat or prices on Lexis. To be certain, they are competitors and you should be constantly making sure you have the best deal from whoever your providers for online legal research are.
However, at this point I will tell you if you are not already a member of Consumer Attorney of Los Angeles and of California and American Association of Justice, join if you qualify for membership. All three of these organizations have incredibly valuable listserves for their members. I find that when I am attempting to value cases this is the most important resource you can have in your arsenal.
Once upon a time, I was amazed by some attorneys abilities to easily put their hands on any piece of Rutter’s regarding any issue that one might need. Then I found out his secret! He was using Premise (which was a Thompson West Product). However, they do not maintain this software any longer. Now all Westlaw has all Rutters books online. They are easy to search and you no longer need the hard copies of the books, which need updating. I am not sure I could practice law without Rutters on-line. Every single one of these guides are available through this service. I can enter in a natural language search and find everything I need.
Copiers, Printers, Scanners and Fax Machines
We lease a high end copier, which scans, hole-punches, collates, staples (it may do other things, which I don’t know how to use). We decided to lease because these copiers tend to have problems from time to time and as a result it has been more cost effective to lease because the repair service is included. This lease is about $400.00 a month. The cost for a heavy duty copier to purchase ranges from $8,000 to $10,000.00. We also purchased a lower end copier used from another law firm in our building to have as a back-up. You should also purchase a smaller, color all-in-one, like you would purchase for your home use. You will appreciate the convenience of having this in the office and they are not very expensive. Everything needs to be networked together.
We purchased all the basic smaller printers. These are not very expensive and range in price from $100 to $300 each. We also purchased the fax machine; they range from $200.00 to $500.00. We purchased a used fax machine.
Website and Marketing
Your first opportunity to get you name out there is an announcement – giving friends, family, members of your community and other law firms an announcement that you have “hung your shingle.” I hired Naomi & Matt from insight legal graphics to help with this. I have a good friend who is a professional photographer. He took some pictures in non-professional settings. I think the photographs of attorneys behind their desks on the phone are the silliest photos imaginable. If you cannot use a phone, can you really practice law? Of course everyone knows you have a desk and a phone. Think of having photographs made that show your personality. People want to hire people that they like.
You may also want to do an announcement in any local papers. For instance in my area we have the Daily Breeze and the Argonaut. You may also consider an advertisement/announcement in the Advocate or Forum magazine. These are relatively inexpensive ways to market your services.
My first announcement was more like an invitation. Naomi helped me with the logo, text and design. It was beautiful. Recently, I had Naomi design a new postcard as a friendly reminder about me and my services. This is now attached as a signature line to my email as well.
You will also need a domain and website. You may not need it immediately, but you do need one. So get it right away. I reserved Haggailaw.com almost a year before I went on my own. It was 2004; I was watching the Super Bowl and this GoDaddy.com advertisement came on. This was the first year that they bought ad time during the Super Bowl. It was a controversial ad and it worked on me – bought www.haggailaw.com for a good price, somewhere in the neighborhood of $15.00.
Folks used to look up attorneys in the yellow pages, now they go online to find lawyers. In addition, I think it looks better when you have an email address with your name in it, for instance mine is email@example.com. This looks more professional than a yahoo or gmail account. There are many companies that will set your website up for you, like Findlaw. However, you can also use intuit and do it yourself (and save some $$). In the beginning, I would recommend doing it yourself. GoDaddy is also great for looking up your domain and managing your website. You will save a considerable amount of money.
I personally get most of my work and cases from referrals, professional, community and from my law school connections. I am a firm believer in networking and community involvement. The latter makes you feel good and it has the added benefit of helping your business. My husband and I are involved in Rotary International. Rotary is an international service organization. Most local clubs only have one member from each different profession. This does provide a nice group of folks for referrals.
Once your firm is more established, you can think big in terms of marketing yourself. There are companies that can increase your firms ranking on google. You can have someone set up and maintain a firm facebook page and twitter account. But, in the beginning, when resources are tight, it is all you. Bottom line, being involved in the community in which you work and live is a good thing.
I am not going to discuss herein banking or hiring personnel, Scott Corwin and Jeff Rudman will be handling these topics. I would pay close attention because these are some things I did not know!
So I am sure you are all curious as to how long it was before I had my first trial. It was less than a year and it was a scary and wonderful experience – just has I knew it would be. The case was referred by a member of Consumer Attorneys. I have tried 9 cases since. I truly believe that being my own boss was the best decision I have made professionally. I work harder than I ever had. I take more vacations than I ever did. I spend more time with my family and friends. Life is good when you are a trial lawyer.