Author Topic: Employment Dilemma--Take New Job?  (Read 19389 times)

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #150 on: June 01, 2018, 04:08:20 PM »
A brief financial update, and a question:

I just sent out my first invoices.  Woohoo! Some thoughts:

-Wow, that's a lot of work to do on your own -- creating bills, cover letters, etc.  I might look into software here soon, but I really love my customization. 
-My invoices totaled about $7,900.  That was almost all just May invoicing (very minor work in April), so I'm pretty happy with that invoice amount for the first month. 
-Of course, invoices are much different than receipts, but anyway, I'm happy about the volume of work I had in my first month.

So here's the question: towards the end of the month, I actually found myself pushing to do stuff into June and/or not billing a file with only minor work.  For instance, a corporate client is having me review his contracts (I estimate about 10 hours of work), but he doesn't want them done until mid-July.  Thus, I didn't really do this in May since I had a decent amount of other work already.  My thought was to spread out the work a bit so I have something to do in June. 

I also didn't bill matters that just got started at the end of May.  I thought it was in bad taste to bill when nothing much has been accomplished, but more importantly, I thought I could do more work on these matters, get more accomplished, and then send a bigger bill in July (since June invoices were already a good number).

Is this "spreading things out" idea an okay strategy?  Or should I be trying to churn work in and out as fast as possible?  Hopefully this question makes sense.

Cheers.

shawndoggy

  • Bristles
  • ***
  • Posts: 293
Re: Employment Dilemma--Take New Job?
« Reply #151 on: June 01, 2018, 05:06:43 PM »
RSM I can only say what I do:

a) default rule is to bill regularly and monthly (sounds like you are on track with that)  Definitely DON'T get to a point where you say "oh, I'll just get the billing done next month."  Your collections will suffer on stale invoices.
b) if I start a "big" matter in the last week / couple days of the month, I will "hold" the bill to be combined with time for next month, so that there isn't some piddly time on one invoice when it makes more sense to be combined with next month's
c) same goes for when time runs over into next month (i.e. big time in may but matter doesn't conclude till June 5... if I can I want all that time on a single invoice).
d) where matters have concluded, even though before the end of the month, don't hesitate to get an invoice out.

And in your context, I wouldn't necessarily limit yourself to billing monthly unless that's what your engagement letter/retainer agreement says you are going to do.  There's a very successful family lawyer in my burg who is (in)famous for billing her clients weekly.

lhamo

  • Walrus Stache
  • *******
  • Posts: 8172
  • Location: Seattle
Re: Employment Dilemma--Take New Job?
« Reply #152 on: June 01, 2018, 05:20:45 PM »
WOW -- way to kick it into gear in your very first month!

FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #153 on: June 02, 2018, 08:39:38 AM »
RSM -

I have taken a different path with how I handle my billing. It has a lot to do with my practice and I understand that it might not be something you can fully adopt, but I'll share it anyway so you can consider if any of it works for you.

First, with your billing, you definitely do not want to count billed amounts as anything resembling real income. I've been around attorneys who thought their accounts receivable had value and learned the hard way that it is literally not worth the money they spend printing and mailing. The truth is that nothing matters except money that is received, deposited and cleared the bank. If you choose to continue with hourly billing and monthly invoices you absolutely have to keep your time and send  out your bills regularly.

You will also have to develop a systematic response (a policy) for how you handle people with overdue balances. You have to be firm in telling every client - "If your retainer gets below $1,000 (or 2 or 3 or whatever) then I will stop working." Then, when they break that clear rule, you have to stop working and inform the client immediately and clearly. You might get form letters that get sent out at $1,500 as a warning to them and second letter informing them that you will not continue working until additional funds are received. The bottom line is your clients will expect that you work for free if you don't tell them clearly and explicitly what the deal is at the beginning. I can't tell you how many clients I have heard complain about their attorney (not me!) because, "They only care about the money." They really don't get it that, yeah, you expect to be paid for your time. That doesn't make you a "greedy lawyer" anymore than whatever other person who expects to receive a paycheck.

If anyone tries to throw that bull at you, give them their file and let them hire someone else. Don't get needy for clients, which is hard at the beginning, but letting people who complain become someone else's unpaid bill and walking trash talker about their firm (not yours!) is always a good idea. You want happy, satisfied clients.

Trust me when I tell you that if a person does not want to give you the retainer you request, "Umm, I'm short right now can I pay as I go?" There is a very good chance that person is going to accumulate a balance and never pay. You don't lose anything when you let a non-paying client hire and not pay someone else. Eventually, you'll develop an eye for a future unpaid balance and decline to take the case at the first consult.

Consider every unpaid bill as a continuing education you just paid for! When it's clear you are not getting paid, write it off. Never sue a client to collect. Never get mean with a client who won't pay. If you do that, those people will dislike you and tell everyone about it. On the other hand, if I've had people who don't pay me what was agreed and I know I'm never getting paid, I write a letter stating I am writing off the bill and, in return, I only ask that they send me referrals that will generate enough business to cover the loss. That works. You are converting your unpaid bills from a potentially toxic situation involving collections into a sales force of people saying nice things about you.

Do not get in the habit of taking involuntary pro bono work.

But, I've gone away from monthly billing totally. I don't take any cases on an hourly rate. Everything in my office is paid up front on a flat fee or on a contingency so I do zero monthly invoices. In my opinion, hourly billing creates many distorted incentives that are damaging to the lawyer client relationship. They want to call and talk to you, maybe give you some good information, but they don't want a bill for a $100 half hour conversation or to come to your office to talk for an hour and get billed $200 (or whatever). I think most clients, even small and medium business clients, prefer being charged a flat fee for their legal work. If you set a flat fee then they pay it, money is no longer a part of your relationship. At that point you can just work, cooperatively, on a project.

One other perverse incentive is that hourly billing gives you a motivation to take more time on something which is the opposite of what your client wants. You want incentives aligned between you and your clients. Having a major incentive misaligned and permanently a focus between you and your clients because they will receive and review the bill monthly just does not create positive relationships - in my opinion.

With a flat fee, you are incentivized to do everything in the absolute most efficient manner. Clients respect efficiency when they see it. It gains you credibility and I have never had a client say, "Well, I wish you would have taken longer to get this done to make your hourly rate more reasonable." They don't think of it as an hourly thing, they think they just paid you $750 for an LLC, $2,000 for a probate, $1,000 for a DUI, $10,000 for their compliance work or whatever. They paid you X dollars for Y project. That is all they think.

Hourly billing does not give people certainty about the cost of the project. A lot of times a client would prefer a flat number so they simply have the knowledge of the cost of the project. I don't work with businesses, but I have to think a business person appreciates the certainty on cost so they can go and manage their cashflow. Often they will prefer this flat number even if they know it comes out to a higher hourly rate.

Clients never seem to grasp the idea that the attorney is charging $x00 dollars per hour but that does not all go to the attorney, it covers the cost of running the entire business. They think you are making $250 an hour and they compare that to their hourly rates - which for most have never been more than $50, $60 p/hour and many its $20, $25 or less, and think you are ripping them off! But, they don't think about all the costs you have. I've even been with bigger corporate clients who are my friends (not clients) squawking about their big firm lawyers "$800 hourly fee is ridiculous!" But, they are the ones who want attorneys with fancy offices, expensive degrees, expensive suits, expensive cars, etcetera. What do they think they are paying for?

If big business people don't like it, medium business people don't like it, regular people don't like then why do we keep doing it?

As you are seeing with your billing, you don't like it either! It is a lot of work for you to bill by the hour. Flat fees would be a significant saver of time and resources for you as well. You won't have to write down your .1 and description of everything you do all day, every day for the next few decades, put it into a bill, send it out every month, maintain records of unpaid balances, etcetera. Someday you'll pay someone to do all that and it will not be your problem with time, but it will be your problem with money for a salary, taxes, etcetera for the person who does that job. As MMM has made clear, if you pay someone else you have to spend your time to earn the money for their salary and you get caught in the wheel of needing to earn enough to cover your firm's monthly overhead.

I suggest trying out the flat fee whenever possible. Give the client the option to choose a flat fee or an hourly rate. You will charge too little on occasion and too much on occasion. It all balances out in the end. You also get better and better at it. You can also say to the client, "I'm charging X but, this project is hard to predict so I reserve the right to ask you for more money depending on how the project unfolds." I just do my level best to never ask for more money except in extreme circumstances. Clients always know the case has taken a lot of effort relative to what they paid and are understanding as long as it is an actual fact that you have spent a lot of time relative to the money on the case. I've had clients offer me more money before I even asked! It's amazing how the dynamic between the client and lawyer changes when they don't feel you are fleecing them monthly. They feel like you are their champion and they pay you like it.

Anyway, good luck creating your own philosophy on billing. But, be aware of the fact that you are creating a philosophy on billing. Don't allow it to be by default. Don't just do what you think everyone else is doing. Think about it. Read about it. Talk to other attorneys about it and then choose the best option for you.

lhamo

  • Walrus Stache
  • *******
  • Posts: 8172
  • Location: Seattle
Re: Employment Dilemma--Take New Job?
« Reply #154 on: June 02, 2018, 09:49:40 AM »
I really like  Fireby35's advice!  For things that might get a little trickier you could also offer a tiered approach -- for example, making it clear that your goal is to settle something without having to go to trial, so $xxx for all the work required to get through a mediation, but $xxxx for the trial work if mediation fails.  That also makes it very clear to the client that there will be significant costs if the mediation fails -- I would imagine some people lose sight of this in the heat of the moment.

civil4life

  • Bristles
  • ***
  • Posts: 286
    • My Journal
Re: Employment Dilemma--Take New Job?
« Reply #155 on: June 02, 2018, 12:59:02 PM »
I will share from the client side.  My lawyer bills me in chunks after doing a large amount of work on my case.  I am suing a former employer and it has been a very slow process.  On my end it is stressful, because I am never really sure when I will get a bill, but know that she usually waits until around $5k of work is complete.  I would definitely appreciate having a set fee for each level of the process.  I try to avoid calling or emailing as I know it will cost me about $20 per .1 hour.

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #156 on: June 03, 2018, 10:14:14 AM »
Thanks for the replies.  Some thoughts on the comments and suggestions:

(1) I think billing took so long this time because it was the first bills being sent out.  Now I have a template cover letter, template bill, etc. for each client.  I think this will grow more efficiently over time.  Also, like I said, these bills were extremely customized--the cover letter summarizes what work was done and why it was done; there is an "Update on Your Case" box on the actual invoice; etc.  I sent a sample to two family friends and they said they would pay the invoice in a heartbeat. 

My hypothesis right now (based on my reading) is that taking time to generate good, customized, professional invoices should hopefully improve collections.  This is obviously a hypothesis right now, so I will keep you posted.

(2) My goal is to bill on the first of the month, every month.  I've read in multiple books/articles that having a set date reduces the client's surprise of getting an invoice and helps with collections.

But, as another poster alluded to, I am "holding" bills until something is accomplished.  As a customer, I wouldn't like a $200 bill when I've only retained the attorney for a week and nothing has been done.  Perhaps I should send a "I am withholding your June invoice" letter to remind them that I'm not working for free.

(3) I absolutely love the idea of withdrawing if the past due balance get past a certain dollar amount.  I am going to put this in my fee agreement.

(4) The flat fee billing is something I've been reading about and considering for a long time.  The modern trend certainly seems to tip towards flat fees, and the attorneys tell me that customers love it.  BUT, when I went solo, I asked 3 or 4 of my clients (including my two biggest corporate clients), and they said they wanted to continue getting billed hourly.

I believe the idea of giving the client a choice is a tremendous option.  I kind of did this unintentionally the other day when I entered into a limited scope fee agreement whereby I accepted $500 to just handle this single part of potential litigation, and if it blew up, we would sign another fee agreement.


All good thoughts, though. I felt weird about sending out my invoices--in a sense I was proud of my work, in another, I knew they weren't worth the paper they were printed on unless I actually collected.  I'll keep you guys posted. I guess this is all in the fun of being a solo practitioner.

MrUpwardlyMobile

  • Bristles
  • ***
  • Posts: 396
    • The Upwardly Mobile Life
Re: Employment Dilemma--Take New Job?
« Reply #157 on: June 03, 2018, 10:31:16 AM »
Thanks for the replies.  Some thoughts on the comments and suggestions:

(1) I think billing took so long this time because it was the first bills being sent out.  Now I have a template cover letter, template bill, etc. for each client.  I think this will grow more efficiently over time.  Also, like I said, these bills were extremely customized--the cover letter summarizes what work was done and why it was done; there is an "Update on Your Case" box on the actual invoice; etc.  I sent a sample to two family friends and they said they would pay the invoice in a heartbeat. 

My hypothesis right now (based on my reading) is that taking time to generate good, customized, professional invoices should hopefully improve collections.  This is obviously a hypothesis right now, so I will keep you posted.

(2) My goal is to bill on the first of the month, every month.  I've read in multiple books/articles that having a set date reduces the client's surprise of getting an invoice and helps with collections.

But, as another poster alluded to, I am "holding" bills until something is accomplished.  As a customer, I wouldn't like a $200 bill when I've only retained the attorney for a week and nothing has been done.  Perhaps I should send a "I am withholding your June invoice" letter to remind them that I'm not working for free.

(3) I absolutely love the idea of withdrawing if the past due balance get past a certain dollar amount.  I am going to put this in my fee agreement.

(4) The flat fee billing is something I've been reading about and considering for a long time.  The modern trend certainly seems to tip towards flat fees, and the attorneys tell me that customers love it.  BUT, when I went solo, I asked 3 or 4 of my clients (including my two biggest corporate clients), and they said they wanted to continue getting billed hourly.

I believe the idea of giving the client a choice is a tremendous option.  I kind of did this unintentionally the other day when I entered into a limited scope fee agreement whereby I accepted $500 to just handle this single part of potential litigation, and if it blew up, we would sign another fee agreement.


All good thoughts, though. I felt weird about sending out my invoices--in a sense I was proud of my work, in another, I knew they weren't worth the paper they were printed on unless I actually collected.  I'll keep you guys posted. I guess this is all in the fun of being a solo practitioner.

Bill monthly on every file.  There are tons of reasons but regular billing results in better cash flow and fewer delinquent or slow paying accounts.

NorCal

  • Pencil Stache
  • ****
  • Posts: 605
Re: Employment Dilemma--Take New Job?
« Reply #158 on: June 03, 2018, 10:47:46 AM »
My first job out of school involved Accounts Receivable at an eDiscovery company.  Here's some general advice that would apply to corporate clients, but might not apply to small firms or individuals.

1. Get to know the Accounts Payable people at your client, and don't be afraid to give them a call.  Most payments issues occur because your client (the individual) doesn't know how to properly submit invoices to their own AP department.  Your invoice will end up in a bureaucratic limbo, and no one will think to tell you about it.  This is particularly true of your first invoices to a client.

2.  Call early and call often about late payments.  Typically start with AP, then escalate to your contact if needed.  It's MUCH easier to be annoying about it upfront than to try and collect on unpaid invoices months later. 

3.  Don't be afraid to cut off services to clients that are past a certain delinquent threshold.  Just document it and be consistent about it.  I once threatened to cut off access to a law firms Discovery documents mid-trial due to an extremely late payment.  Amazingly, the 120 day old invoice was paid overnight.

4. Set a late-fee in your contract for new clients.  Consistently charge it, but be willing to negotiate it away for those operating in good faith.

TVRodriguez

  • Bristles
  • ***
  • Posts: 368
Re: Employment Dilemma--Take New Job?
« Reply #159 on: June 04, 2018, 12:17:24 PM »
Nice update!  Congratulations on running your first set of invoices--and for a good amount, too.  Well done.  A few thoughts as I read your update and the responses.

1.  I bill flat rates on some matters and hourly on others.  I explain why in the initial intake call before the first meeting.  Flat fee clients do not receive monthly bills.  They usually pay 50% up front and the balance once I've performed the work.

2.  I bill monthly, on either the last day of the month or the first of the next month (depending on where it falls in the week).  I set the due date 30 days out or by the first of the next month.

3.  I bill a consultation fee for my first in-person meeting because my time is valuable and because I give lots of valuable information during the meeting.  It's not my hourly rate (it's 75% of my hourly rate) and it covers the whole meeting, which can go up to 3 hours.  It's a gate-keeper.  I also credit the consultation fee to any flat fee if they hire me within a reasonable time after the meeting (~a month).

4.  When someone has not paid me for three months, they get a notice that I will stop working on their matter until they bring their account up to date.  I've only had to do this a couple of times, and it works.  I don't have a form letter.  It's pretty short to write that out.

5.  My engagement letter includes the client's specific agreement to be responsive, and it states that I will only begin work once my deposit has been paid and the letter is returned signed by the client or clients.

6.  I bill flat fees when the work depends only on me (and on the client's responsiveness to my need for information).  When I have to depend on the court, I bill hourly.  Judges around here can change the rules overnight, which can literally add thousands of dollars to a matter, and I will not be left holding that bag.  I've known a couple of attorneys in my area who were billing flat fees, and both of them stopped practicing because they were being run ragged.  No thanks.  I don't want a volume practice or to run a factory.

7.  Don't try to be the lowest-billing attorney (or anything, really).  If your biggest selling point is that you are cheap, then your clients will desert you for the newest cheaper guy down the block.  You must have something to offer that is worth paying for.

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #160 on: June 04, 2018, 01:01:51 PM »
Thanks for the additional tips, TVR and NorCal. Some thoughts:

-I actually had two clients email me *thanking* me for the invoice and indicating that payment has been sent.  They really appreciated the updates.

-I had my due date as 14 days from receipt of the invoice.  My assumption was that's plenty of time to pay an invoice.  Maybe I should make it 30?

-I do not charge for the consultation (or a lot of phone calls, so long as the client doesn't abuse it), but I always put this time on the invoice and then write it off as "NO CHARGE" at the end of the invoice.  It reminds the client that my time is valuable and my limited experience thus far is that it makes the client feel like they are getting a discount.

-Per this board's suggestion, I already incorporated the flat fee model today.  This is a "responsible party" on a nursing home collection matter (when the nursing home unlawfully tries to go after the "responsible party" and pretend they are a "guarantor," which is illegal).  I let the client pick between flat fee and hourly and she picked flat fee.  I'm charging $250 to send letters to get these nursing homes off her back.  I may turn this into a pattern of corrupt activity complaint if I get another one of these.

This is fun stuff.
« Last Edit: June 04, 2018, 01:37:18 PM by ReadySetMillionaire »

zygote

  • 5 O'Clock Shadow
  • *
  • Posts: 96
Re: Employment Dilemma--Take New Job?
« Reply #161 on: June 04, 2018, 01:47:15 PM »
From my perspective as a client:

I'd recommend a 30 day due date since you are working with corporate clients. Where I work, 14 days would be tight to get everything through the layers of bureaucracy. (It does not help that some vendors I work with only send their invoices by snail mail and it can take up to two weeks after the postmark date for it to end up in my mailbox, but that's another issue...)

Personal clients, I think 14 days is reasonable.

NorCal

  • Pencil Stache
  • ****
  • Posts: 605
Re: Employment Dilemma--Take New Job?
« Reply #162 on: June 05, 2018, 07:13:58 AM »
Thanks for the additional tips, TVR and NorCal. Some thoughts:

-I actually had two clients email me *thanking* me for the invoice and indicating that payment has been sent.  They really appreciated the updates.

-I had my due date as 14 days from receipt of the invoice.  My assumption was that's plenty of time to pay an invoice.  Maybe I should make it 30?

-I do not charge for the consultation (or a lot of phone calls, so long as the client doesn't abuse it), but I always put this time on the invoice and then write it off as "NO CHARGE" at the end of the invoice.  It reminds the client that my time is valuable and my limited experience thus far is that it makes the client feel like they are getting a discount.

-Per this board's suggestion, I already incorporated the flat fee model today.  This is a "responsible party" on a nursing home collection matter (when the nursing home unlawfully tries to go after the "responsible party" and pretend they are a "guarantor," which is illegal).  I let the client pick between flat fee and hourly and she picked flat fee.  I'm charging $250 to send letters to get these nursing homes off her back.  I may turn this into a pattern of corrupt activity complaint if I get another one of these.

This is fun stuff.

You're doing all the right stuff.  I would consider everything you've listed as "best practice".

I think 14 days is a fine term length to use.  15 days is actually a pretty standard term.  If any client has issues with this (some might), you would want 14 days to be the starting point for negotiations, not 30.  Consider putting the payment terms in your engagement letter as well.

I'm really encouraged by your experience for personal reasons.  My wife has future plans to leave her law firm to start her own practice.  You have a lot to be proud of.

Blonde Lawyer

  • Pencil Stache
  • ****
  • Posts: 711
    • My Student Loan Refi Story
Re: Employment Dilemma--Take New Job?
« Reply #163 on: June 05, 2018, 08:26:04 AM »
Great updates! I haven't read this thread in awhile.  Lots of changes!

I have a couple questions.  How much is your malpractice insurance? Second, did you get a legal research contract with Lexis or Westlaw? Those are the types of costs I worry about if I ever went solo.  My state has Lexis/Westlaw at one of the law libraries where I could become a member. We also have free access to Casemaker which is pretty good but doesn't have all of the unpublished opinions that Lexis/Westlaw have that are important to my areas of practice.

I hate tracking and entering my time more than anything.  I love the idea of all contingency/flat fee.  However, I think in my state I would still have to track it.  Judges can require time records, particularly if a party is awarded attorneys' fees.  I do mostly litigation and it would be really difficult to do a flat fee since it is so unpredictable how the case will go.  We routinely do litigation budgets for corporate litigation clients and those are often difficult too.  I guess those could be a starting point for flat fee.  Something like this flat fee includes up to 5 depositions, one mediation, etc.

Lastly, what are you doing about funding expert witnesses and other litigation costs? Many of my contingent fee PI clients cant afford that stuff so my firm pays it up front and gets paid back from the settlement/judgment.  This can be particularly costly in medmal cases. I guess you could just pick clients that could fund their own expenses but that really limits your pool of contingent PI stuff.

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #164 on: June 05, 2018, 01:33:52 PM »
I'm really encouraged by your experience for personal reasons.  My wife has future plans to leave her law firm to start her own practice.  You have a lot to be proud of.

Thanks for this.  Things are going well so far--but hopefully I start receiving checks in the mail soon.

I know I'm in no place to give advice (being so new at this), but I guess just let her know that I've been working on this for a couple years now.  I've really been able to hit the ground running and that's made my life a lot easier.  Shoot me a PM if you want to exchange contact info outside of this site.

Great updates! I haven't read this thread in awhile.  Lots of changes!

I have a couple questions.  How much is your malpractice insurance? Second, did you get a legal research contract with Lexis or Westlaw? Those are the types of costs I worry about if I ever went solo.  My state has Lexis/Westlaw at one of the law libraries where I could become a member. We also have free access to Casemaker which is pretty good but doesn't have all of the unpublished opinions that Lexis/Westlaw have that are important to my areas of practice.

I hate tracking and entering my time more than anything.  I love the idea of all contingency/flat fee.  However, I think in my state I would still have to track it.  Judges can require time records, particularly if a party is awarded attorneys' fees.  I do mostly litigation and it would be really difficult to do a flat fee since it is so unpredictable how the case will go.  We routinely do litigation budgets for corporate litigation clients and those are often difficult too.  I guess those could be a starting point for flat fee.  Something like this flat fee includes up to 5 depositions, one mediation, etc.

Lastly, what are you doing about funding expert witnesses and other litigation costs? Many of my contingent fee PI clients cant afford that stuff so my firm pays it up front and gets paid back from the settlement/judgment.  This can be particularly costly in medmal cases. I guess you could just pick clients that could fund their own expenses but that really limits your pool of contingent PI stuff.

-Malpractice has limits of $250k/$500k.  I may increase that over time but that seemed like more than enough for now.  Annual premium is $1,184.

-I did not get a contract with Lexis/Westlaw.  As you suggested, my local law library has premium Westlaw.  I use it whenever I have a hearing downtown.  Annual membership for the law library is $20.

-I totally agree on keeping track of time.  I do a lot of CSPA, FDCPA, consumer-oriented statutes where fee-shifting is a possibility.  I've developed a great system for keeping track of time and it's not a big deal for me.

-I have yet to have a big expense case.  My plan for this was to bring in one of the guys here at my office on a referral basis -- he specializes in PI/med-mal, and I think I could give him some of the fee, have him front the costs, and then I could learn a ton from him, making his cut of the fee worth it.  He's referred me a bunch of stuff already, so this could be a great relationship.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #165 on: June 05, 2018, 03:05:41 PM »
RSM - If you get a big case, co-counsel it.

By "big case" I mean something where you can see there is a big recovery. A big contract dispute, major injuries on a med mal, major injuries in a truck accident or something like that. Med mal cases are a great example. They can take tens of thousands or a hundred thousand dollars and years of floating it to effectively prosecute. I've been practicing for 8 years, I manage 100+ PI cases (and another 100+ immigration and criminal) and I've been dutifully mustachian - but I don't have that kind of money to invest in a single case. I max out at about 10k which, in my neck of the woods, can buy a life-care plan, loss of earning capacity report and economist report. Anything over that, I call specific attorneys I researched and interviewed (although, informally and they didn't know they were getting interviewed!) and I believe maximize the recovery potential for me and the client (aligned incentives for clients and counsel on that one!).

Anyway, it depends on the co-counsel attorney but the best deal I have gotten is 50/50 split, they pay costs and do the work. If you think about it, its an offer you can't refuse. That attorney is a former president of our trial attorney association and has won so many cases worth so much money he doesn't sweat the expenses and he doesn't have to negotiate for a good percentage split - he just gets calls from all the other Plaintiff attorneys to work their best cases. If you are plaintiff trial attorney, that is as good as it gets.

On that, I'm sure your office mates are great and you definitely want to reciprocate with people who send referrals. But, if you get "the big one" make sure you take the time to pick your co-counsel partner carefully. Just like the tax strategy and your billing philosophy you want to have a really good reason for why you chose a particular person as you co-counsel partner on a game changer case.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #166 on: June 08, 2018, 07:02:56 AM »
RSM - I was just reading your post to my wife about your malpractice insurance and how much it cost, she said, "Oh man, that's a lot." Check out Minnesota Lawyers Mutual for your insurance. According to my wife (who is a CPA and does all our books) we get at least one million in coverage for two attorneys for about the price you are paying. Just check it out. It might save you some cash.

Also, on the legal research thing, I have found that google gives you most decisions if you find it cited in a brief or something and then, if it is federal, you can pull up the case docket on Pacer and get all the original documents, including briefs filed by both parties in the case. My biggest problem is copying and pasting from PDF's of others great arguments. You can even get transcripts of hearings to really know what is going to happen - usually for a couple dollars! If you do that, opposing counsel is usually not as well prepared and you have the advantage. Our state system is electronic and allows you to see all the filings online as well. So, I do the same thing. I have a statute book that has the criminal statutes, criminal procedure statutes and civil procedure statutes, jury instruction book, evidence book, and a book that is titled [State] Trials and includes all the relevant statutes and cases for each phase of trial. The circuit Court and our state Court put annotated model jury instructions online as well and once you have the case citation, you have it all. Anyway, with all that readily available for no subscription and often for free I rarely need additional research tools. Those books probably cost $500 total. If I do need more, I get a law clerk for the project - which is cheaper than a contract with Westlaw or Nexis which they bring with them as current law student who get it for free. Not to mention the law library if you really need it.

The point is, Westlaw and Nexis are dinosaurs and certainly not needed to run a profitable and aggressive litigation firm.

civil4life

  • Bristles
  • ***
  • Posts: 286
    • My Journal
Re: Employment Dilemma--Take New Job?
« Reply #167 on: June 08, 2018, 09:26:35 AM »
My biggest problem is copying and pasting from PDF's of others great arguments.

@FIREby35 This may help with the copying and pasting... https://pdfcandy.com/


avedaprincess

  • 5 O'Clock Shadow
  • *
  • Posts: 36
Re: Employment Dilemma--Take New Job?
« Reply #168 on: June 08, 2018, 07:15:38 PM »
ReadySetMillionaire,

I've read your post with interest because a few years ago, I did the exact same thing that you did. I am glad that you negotiated to keep  a percentage of cases you originate, because I didn't (I just get a straight salary) and now I'm kicking myself! Good job!

I would try and renegotiate that, but the dynamics of the firm have changed and it would not be well received.



FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #169 on: June 09, 2018, 08:10:52 AM »
My biggest problem is copying and pasting from PDF's of others great arguments.

@FIREby35 This may help with the copying and pasting... https://pdfcandy.com/

OMG! Thanks!

LeRainDrop

  • Handlebar Stache
  • *****
  • Posts: 1845
Re: Employment Dilemma--Take New Job?
« Reply #170 on: June 09, 2018, 08:22:41 AM »
My biggest problem is copying and pasting from PDF's of others great arguments.

@FIREby35 This may help with the copying and pasting... https://pdfcandy.com/

OMG! Thanks!

Ditto! Seriously, I am in the middle of a project right now that involves lots of quoting from pdf-ed letters, and this program is going to be a huge time saver. Thank you!

Edit: Oh, and this is flat fee legal work :-)
« Last Edit: June 09, 2018, 10:26:43 PM by LeRainDrop »

civil4life

  • Bristles
  • ***
  • Posts: 286
    • My Journal
Re: Employment Dilemma--Take New Job?
« Reply #171 on: June 09, 2018, 04:14:27 PM »
Just an FYI...There are numerous pdf editors online for free.  Some you can download others that you can use online.  So if you ever need to manipulate a pdf in someway just Google what you want and usually you can find what you need.  Sometimes the size of the file may be limited or the number of uses in a month is limited.  The other thing you need to watch for is some will watermark the document.

cutepdf - This one is a great pdf driver you can download to print docs to pdf.
pdf escape - This one is good to fill out forms.
pdf995 - This is a downloadable software.  It has annoying ads, but works well.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #172 on: June 10, 2018, 08:07:33 AM »
RSM - If you get a big case, co-counsel it.

By "big case" I mean something where you can see there is a big recovery. A big contract dispute, major injuries on a med mal, major injuries in a truck accident or something like that. Med mal cases are a great example. They can take tens of thousands or a hundred thousand dollars and years of floating it to effectively prosecute. I've been practicing for 8 years, I manage 100+ PI cases (and another 100+ immigration and criminal) and I've been dutifully mustachian - but I don't have that kind of money to invest in a single case. I max out at about 10k which, in my neck of the woods, can buy a life-care plan, loss of earning capacity report and economist report. Anything over that, I call specific attorneys I researched and interviewed (although, informally and they didn't know they were getting interviewed!) and I believe maximize the recovery potential for me and the client (aligned incentives for clients and counsel on that one!).

Anyway, it depends on the co-counsel attorney but the best deal I have gotten is 50/50 split, they pay costs and do the work. If you think about it, its an offer you can't refuse. That attorney is a former president of our trial attorney association and has won so many cases worth so much money he doesn't sweat the expenses and he doesn't have to negotiate for a good percentage split - he just gets calls from all the other Plaintiff attorneys to work their best cases. If you are plaintiff trial attorney, that is as good as it gets.

On that, I'm sure your office mates are great and you definitely want to reciprocate with people who send referrals. But, if you get "the big one" make sure you take the time to pick your co-counsel partner carefully. Just like the tax strategy and your billing philosophy you want to have a really good reason for why you chose a particular person as you co-counsel partner on a game changer case.

PS RSM - I just got a call yesterday that a case I referred a year ago to this attorney settled for 135k and I'll be getting a 22k check in the mail this week (50/50 on 44k fee). After I signed up the client and brought in the co-counsel, I did basically nothing. I went to a couple meetings but had no responsibility for interacting with opposing counsel, filings or anything like that. That is the best way to make money as a lawyer!

Take a minute to think about it from the client perspective. How would they have known to find the most well-regarded Plaintiff attorney in their state for their issue? The person who just spoke at a national AAJ event on exactly that issue? This involved extremely sensitive issues that not just anybody could successfully deal with. It didn't cost them anything extra. Anyway, I think helping non-lawyers navigate the entire system, including finding the right specialist, is a service and you can get paid for it.

Dicey

  • Walrus Stache
  • *******
  • Posts: 8446
  • Age: 60
  • Location: NorCal
Re: Employment Dilemma--Take New Job?
« Reply #173 on: June 10, 2018, 11:45:24 AM »
Wow, great advice and great progress!

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #174 on: June 14, 2018, 08:10:04 AM »
I have received enough checks that it is time for me to go to the bank.  Two of these checks are retainers.  These obviously go into the IOLTA account. 

But what about clients who paid my bill hourly?  I've already earned these fees, meaning they can be deposited straight into the operating account, correct?

This is obviously a red-flag area so I'm trying to be super cautious.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #175 on: June 14, 2018, 11:23:27 AM »
I actually know each state has its own rules on this question. In one of my states EVERYTHING has to go to trust first. In the other state you can deposit earned fees directly into the business account.

The attitude I take is that I ALWAYS want to be able to justify anything I do with money. Rather than be fearful, be prepared to always explain the the "who, what, where, when, why" for any movement. It's actually really easy. Wells Fargo give the opportunity to input a description on their online transfer. So, I put it there. Scan a copy of your bill into your electronic file, write an email to yourself with a certain heading that goes automatically into an outlook folder. Whatever, just keep notes and reconcile your books regularly (or have a bookkeeper do it, eventually).

One idea is to go look at some disciplinary decisions from your state and then do the opposite of what got people in trouble! If you read a couple that involved money, you'll get a feel for what gets people in trouble. You can even call the counsel for discipline and ask what decisions they think a new practitioner should read and then read them. It'll take an hour and save you years of worry.


TVRodriguez

  • Bristles
  • ***
  • Posts: 368
Re: Employment Dilemma--Take New Job?
« Reply #176 on: June 18, 2018, 10:39:35 AM »
Ditto FIREby35:  check your state rules.  Lots of bars offer free CLEs on trust accounting to make it easier to comply.  Check yours.

In my state, earned fees go in the operating account.  Those checks do not represent client money, which is what goes into the trust account.  Here, flat fees can be considered earned and immediately deposited into an operating account as well.

Blonde Lawyer

  • Pencil Stache
  • ****
  • Posts: 711
    • My Student Loan Refi Story
Re: Employment Dilemma--Take New Job?
« Reply #177 on: June 18, 2018, 12:17:43 PM »
Ditto FIREby35:  check your state rules.  Lots of bars offer free CLEs on trust accounting to make it easier to comply.  Check yours.

In my state, earned fees go in the operating account.  Those checks do not represent client money, which is what goes into the trust account.  Here, flat fees can be considered earned and immediately deposited into an operating account as well.

And my state is different on flat fees.  You have to do something to earn it and if it is a large matter, you need to take the flat fee in chunks throughout, not all at the beginning.  So you can take the flat fee as a retainer and pay yourself from it throughout at your discretion but you do not "earn" the whole fee until you have substantially completed the work.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #178 on: June 19, 2018, 07:13:41 AM »
Ditto FIREby35:  check your state rules.  Lots of bars offer free CLEs on trust accounting to make it easier to comply.  Check yours.

In my state, earned fees go in the operating account.  Those checks do not represent client money, which is what goes into the trust account.  Here, flat fees can be considered earned and immediately deposited into an operating account as well.

And my state is different on flat fees.  You have to do something to earn it and if it is a large matter, you need to take the flat fee in chunks throughout, not all at the beginning.  So you can take the flat fee as a retainer and pay yourself from it throughout at your discretion but you do not "earn" the whole fee until you have substantially completed the work.

This is exactly the issue. I am licensed in one state that does it each way. Personally, I think the idea that a flat fee is not earned upon being retained is dumb. For example, if I take a 15k fee on a criminal conspiracy case I am immediately conflicted out of representing co-conspirators and even future people who might be connected to that person. So, I think I should be able to consider it earned upon making my Entry of Appearance. But, whatever. It's not that big a deal either way.

I actually have a sneaking suspicion it is more about the state bar getting more interest from the trust accounts! More money in trust accounts equals more interest payments to legal aid. But, I'm not against that either.

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #179 on: June 19, 2018, 02:32:55 PM »
Thanks all for the advice.  I deposited everything yesterday and it all went well.

FYI if any other Ohio attorneys are reading: flat fees are not earned upon receipt unless specifically noted in the fee agreement.  This wording is complicated, so it's better to just deposit flat fees into IOLTA until the work is completed.



Also, and this is probably the only thing I procrastinated on, but I am sending out my law firm announcement to family and friends.  I couldn't find any templates of these online, so I'll let you guys pick this apart and let me know what you'd change.

I'm eventually going to delete this, so please try to comment/critique without quoting.

06/22/2018

Name
Address Line One
Address Line Two

   Re:   Opening of The Law Office of ReadySetMillionaire

Dear Family Friend:

I hope this letter finds you well, and I hope you enjoyed your recent trip to New York City to see Springsteen on Broadway [personal anecdote of which I was aware, will personalize with each client].

I am writing to let you know that I recently opened my own law practice here at home in City.  The opening of my own solo practice comes after practicing for other firms in the area for approximately four years, but I have ultimately decided to carve my own path so that I can concentrate all of my energy and expertise towards providing clients with straightforward and goal-oriented legal counsel.

My practice largely focuses on real estate litigation (boundary disputes, construction litigation, landlord/tenant, etc.), civil litigation (business law and litigation, employment law, personal injury, etc.), and estate planning.  You can learn more about my firm and its practice areas at www.readysetmillionare.com.

At this early stage, my marketing budget consists of the cost of the stamp on this letter and word-of-mouth referrals.  Thus, if you or anyone you know are in need of professional legal services, I would greatly appreciate if you contacted me or provided my contact information to a prospective client.

Thank you for your time and attention to this letter, and please tell [her friends and relatives, personalized with each client] I said hello.
                  
Respectfully yours,
                  

Adam
« Last Edit: June 19, 2018, 02:34:41 PM by ReadySetMillionaire »

FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #180 on: June 19, 2018, 03:05:09 PM »
Good letter.

Keep an excel spreadsheet with every personal and professional contact. You can send mailed postcards to the same people every quarter or six months. Christmas cards from the firm are good too. Anyway, you are collecting the addresses now so keep them organized for future use.

Another thing you can do is to have a "grand opening." We cut a ribbon with the chamber of commerce and everything. I had mine 6 months after opening the firm. So, there is no hurry. You can wait until things calm down. But, I think it helped people to be like, "Oh, wow, this is real. He has an office any everything." It's just another way to spread the word that you are open for business.

BTW, good job on getting paid and getting the money IN THE BANK! That is a big win.

Dicey

  • Walrus Stache
  • *******
  • Posts: 8446
  • Age: 60
  • Location: NorCal
Re: Employment Dilemma--Take New Job?
« Reply #181 on: June 20, 2018, 10:15:12 AM »
Thanks all for the advice.  I deposited everything yesterday and it all went well.

FYI if any other Ohio attorneys are reading: flat fees are not earned upon receipt unless specifically noted in the fee agreement.  This wording is complicated, so it's better to just deposit flat fees into IOLTA until the work is completed.



Also, and this is probably the only thing I procrastinated on, but I am sending out my law firm announcement to family and friends.  I couldn't find any templates of these online, so I'll let you guys pick this apart and let me know what you'd change.

I'm eventually going to delete this, so please try to comment/critique without quoting.

06/22/2018

Name
Address Line One
Address Line Two

   Re:   Opening of The Law Office of ReadySetMillionaire

Dear Family Friend:

I hope this letter finds you well, and I hope you enjoyed your recent trip to New York City to see Springsteen on Broadway [personal anecdote of which I was aware, will personalize with each client].

I am writing to let you know that I recently opened my own law practice here at home in City.  The opening of my own solo practice comes after practicing for other firms in the area for approximately four years, but I have ultimately decided to carve my own path so that I can concentrate all of my energy and expertise towards providing clients with straightforward and goal-oriented legal counsel.

My practice largely focuses on real estate litigation (boundary disputes, construction litigation, landlord/tenant, etc.), civil litigation (business law and litigation, employment law, personal injury, etc.), and estate planning.  You can learn more about my firm and its practice areas at www.readysetmillionare.com.

At this early stage, my marketing budget consists of the cost of the stamp on this letter and word-of-mouth referrals.  Thus, if you or anyone you know are in need of professional legal services, I would greatly appreciate if you contacted me or provided my contact information to a prospective client.

Thank you for your time and attention to this letter, and please tell [her friends and relatives, personalized with each client] I said hello.
                  
Respectfully yours,
                  

Adam
I just copied this and sent it to myself. I think your letter is a good start, but could be better. To begin with, I would avoid using the same word twice in your opening sentence.

How thick is your skin? know we have some badass writers and editors on the forum, so you might want to ping lhamo, Malkynn, and axecleaver, among others, for more help.

We all want to see you succeed!

TVRodriguez

  • Bristles
  • ***
  • Posts: 368
Re: Employment Dilemma--Take New Job?
« Reply #182 on: June 20, 2018, 11:47:50 AM »
Nice letter.  A bit wordy.  Sorry to quote you, but it's necessary to edit. 

I don't love the 'small marketing budget' line, but I can see the potential chuckle, so keep it if you're attached to it.  I also wouldn't use "focus" twice.  I changed the second one to "mainly handles" and made other changes, too.  I presume your website will be in your letterhead, so I took that out of the body.  Take what you like.


06/22/2018

Name
Address Line One
Address Line Two

   Re:   Announcing the The Law Office of ReadySetMillionaire

Dear Family Friend:

I am excited to announce that I have opened my own law practice here in City.  After practicing at area firms for several years, I have decided to carve my own path.  I will be focusing on providing City area clients with straightforward, goal-oriented, and cost-efficient legal counsel.

My practice mainly handles real estate litigation (boundary disputes, construction litigation, landlord/tenant, etc.), civil litigation (business law and litigation, employment law, personal injury, etc.), and estate planning.  Please visit my website for more information.

At this early stage, my marketing budget consists of the cost of the stamp on this letter and word-of-mouth referrals.  If you or anyone you know needs legal services, I would appreciate it if you contact me or send my contact information to your friends or family.  Feel free to call on any legal matter, and I will let you know if I can help.

Thank you for taking the time to read this letter, and please tell [her friends and relatives, personalized with each client] I said hello.
                 
Respectfully yours,
                 

Adam

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #183 on: June 20, 2018, 02:11:56 PM »
Thanks for the suggestions. Looking to send these out by Friday. And you guys arenít going to hurt my feelings, so comment away.  Per @Dicey 's comment above, pinging @lhamo  , @Malkynn , and @Axecleaver for some constructive critique.
« Last Edit: June 20, 2018, 03:30:42 PM by ReadySetMillionaire »

FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #184 on: June 22, 2018, 08:37:35 AM »
I love "wordsmithing" as much as the next person, but don't forget that the act of sending that letter counts for 95% of its benefit.

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #185 on: June 22, 2018, 09:38:38 AM »
I love "wordsmithing" as much as the next person, but don't forget that the act of sending that letter counts for 95% of its benefit.
Sent this morning.  Next step is sending to other local solo attorneys that I know regarding being available for contract work and hearing coverage.

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #186 on: July 03, 2018, 08:48:05 AM »
Just a brief update:

-Invoices for work performed in June totaled $7,450, which is a little bit under my goal but consistent from May. This included $1,450 just from the appearance work.

-My biggest client didn't pay from May.  June invoice (with May being late) was almost $9,500.  It seemingly always takes them a while to pay, but I'm not sure if/when I should nudge them.  I'm going to dance like an animal when I get their check.

-I've taken a glance at July and I'm expecting worst case scenario to be invoicing about $6.5k.  Add a couple more referrals and it will be another good month. 

-I signed up for Quicken Self-Employed and couldn't recommend it highly enough to other solo practitioners out there. 

-I got on the municipal court appointment lists.  This includes only minor misdemeanors and friends have advised this should be anywhere from $15k-$20k per year.  Add that to my appearance work (should be around $12-15k per year) and I'm doing alright ($27k-35k) without very much effort.  Add doing a couple wills and traffic tickets a month, a couple pieces of litigation, and other miscellaneous matters, and this seems to be going as planned.

-All in all, don't regret my decision for a second and enjoying this so far.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #187 on: July 03, 2018, 03:11:17 PM »
I love it.

I hope you dance like an animal soon. One thought, which you can take or leave, is to call the people who owe you $9,500 and take the attitude that you know everything is all right and they have every intention of paying BUT you want to know who is the person specifically tasked with writing that check and what is the normal process of paying invoices so you can plan accordingly. I would also mention, in a friendly tone, how excited you are about starting your own firm and business and what a great experience it has been and how hopeful you are for the future. People have a way of wanting to help when they don't feel personally defensive. They ought to get the hint that you are patiently waiting to do a $9,500 happy dance :)

If you have to justify your inquiry, just tell them lawyers you know have told you not to let a balance get to big. If not for the repeated advice of more experienced business owners, you wouldn't have even mentioned it.

Glad to hear you are thriving.

BuffaloStache

  • Pencil Stache
  • ****
  • Posts: 697
  • Location: Colorado
Re: Employment Dilemma--Take New Job?
« Reply #188 on: July 04, 2018, 05:19:33 PM »
Glad to hear it RSM! Also, how did the "Law Firm Announcement" letters go? Did you get any new interest or potential clients from them?

Even though I'm not in the law profession at all, this thread is an amazing story of perseverance and turning around what could've been a terrible situation. Definitely inspiring to read/follow, so thanks for that!

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #189 on: July 05, 2018, 07:16:35 AM »
Glad to hear it RSM! Also, how did the "Law Firm Announcement" letters go? Did you get any new interest or potential clients from them?

Even though I'm not in the law profession at all, this thread is an amazing story of perseverance and turning around what could've been a terrible situation. Definitely inspiring to read/follow, so thanks for that!

Haven't per se received any new business, but I certainly raised a lot of awareness that I started my own practice.  I guess I got caught in my own bubble and assumed people knew I went out on my own, but there were a lot of people who texted me and congratulated me, or called my parents and brought up receiving my letter.

This has certainly been eye opening and is nudging me very strongly towards sending out even more letters to both colleagues and "second tier" relationship type of people I know.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #190 on: July 05, 2018, 07:55:30 AM »
RSM - I send out a mailer once a quarter. Even having been out in business for 8 years, I find it is very helpful to give people gentle reminders. If you find a friend or small business person graphic designer then you can have little postcards created and send those. Those have the advantage of being cheaper than paper and an envelope in terms of materials and postage. Also, if they are designed "nice" people start thinking you are running a "real business."

As for second tier contacts, I keep a list of every person I meet. A consult, a business card, everyone. Those people receive my postcards quarterly. That is the most important advertising I do and it is also the cheapest. The next best is Facebook, btw. At least for me. It's the same principle, "once-in-a-while" posts about your business to remind people you are in practice and keeping you "top of mind." You can set up a professional page and pay $15 or $20 to promote your post and it is pretty effective.

It's amazing all the conversations those cards will start and all the minds that will be thinking of you and your business. They will conspire to send you business and it will be awesome!

https://www.google.com/search?q=mailer+postcard+sizes&oq=mailer+post&aqs=chrome.0.0j69i57j0l4.2335j0j7&sourceid=chrome&ie=UTF-8

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #191 on: July 26, 2018, 12:51:04 PM »
I'm going to echo FIREby35 on entity formation over sole proprietorship (although I went with an S-Corp over an LLC).  As a sole proprietorship, I could deduct business expenses, sure, but I would owe payroll tax (Medicare & Social Security) on all of the net income.  As an S-Corp employee, I pay myself a salary and then take a distribution of the excess profit.  The salary is subject to payroll tax, but the distribution is not.  Additionally, starting this year under the Tax Cut & Jobs Act, if my income is below the threshold, then I can take an additional 20% deduction on the distribution.  The biggest caveat is that your salary has to be reasonable--if your net income would be $100,000, you can't pay yourself a salary of $10,000 and take a distribution of $90,000 and avoid payroll tax on 90% of your income that way.  But you could probably pay yourself $70,000 and take a distribution of $30,000, and save the payroll tax on the $30,000, PLUS get 20% of the $30,000 as an additional deduction on your 2018 taxes.

DISCLAIMER:  This is all off the top of my head, so look into it to see if I have the deduction part right from the new law.

So I still haven't paid myself, largely because I still haven't decided how I want to be taxed.  To reiterate, I formed an LLC, which gives me the option to either be taxed as a sole proprietor or s-corp.

The sole proprietorship accounting just seems so straightforward.  Want to contribute to an HSA? Just transfer funds.  Want to pay myself? Just take money out.  Want to contribute to a 401(k)? Just write a check.

The S-Corp accounting just feels so complicated.  I apparently need to sign up for a payroll company just to pay myself a salary.  I also apparently need to go through an accountant for seemingly every last thing I want to do financially.  It's very annoying just thinking about.

Numbers wise, I just feel like the tax difference won't be that great.  I plan on contributing as much as humanly possible to tax deductible accounts -- 401k, HSA, etc. Then I can deduct business and professional expenses.  By the time all that's done, I just don't think the potential savings is worth the hassle.

So I'm honestly leaning toward just doing sole proprietorship.  Might cost me more in taxes but I'm thinking it will be worth the convenience.  I invite @TVRodriguez and @FIREby35 to talk me off my rocker.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 518
Re: Employment Dilemma--Take New Job?
« Reply #192 on: July 26, 2018, 03:45:30 PM »
I have an advantage of being married to my CFO who is an auditor/accountant. So, keep that in mind.

All I can say is to take the time to make the calculations. If you would save 5k in taxes but pay 5k in accountants and book keepers and still have the hassle - not worth it. But, if you are talking about saving tens of thousands of dollars and comparing it to a "hassle" or "inconvenience" then its not different than not taking the time to find the economically efficient car, house, insurance, phone, etcetera. There will be some hassle involved in setting up systems and learning about the most efficient tax strategy. But, it'll save you money in the long run. For what it's worth, it has saved me big money.

What might not be economically viable today, could become economically necessary tomorrow.

What feels like a hassle "one more thing to do" today, might be an interesting project tomorrow.

So, if you decide not to do it now, I'd leave the door open for the future. You actually are doing A LOT of new things right now. Forming a CPA, Book keeper team might be a good task for early 2019 or later. I didn't get to it until 18 months after opening my firm.

How is the rest of it going? Are people paying? Did you get your 10k?

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #193 on: July 27, 2018, 06:26:57 AM »
You've basically summarized my gut feeling thoughts.  Certainly doesn't seem worth it this year, but if my practice gets rolling, then doing things the smart way is probably the best way.  It just seems that I have control over literally everything other than this, so it's been drawing my ire lately.

As for updates:

-I still don't have my $10k--and they are actually the only client that hasn't paid.  I emailed the CFO directly about nine days ago.  I'd be shocked if they didn't pay but it's getting frustrating. 

-But, I basically didn't do any work for them this month, and it's looking like another $7-8k type of month, which means I wasn't entirely reliant on their case.  I will move to withdraw if they don't pay by mid-August.

-Business is good.  I had 9 invoices for April/May billing, and now I have 20 for my July invoices. 

-I'm doing good flat fee, cash-up-front work like license suspensions, traffic tickets, and estate planning.  The license suspension stuff is comically easy but takes time, and people will find a way to pay you to get their license back.  It's easy paying work.

-I got on the criminal appointment list and already got assigned two cases.  I entered into a great plea yesterday arguing an illegal search.  Easy $200-250 there.

-Appearance work this month totaled $1,490, and there's still a couple days to go.  I actually found another great appearance site, so I'm hoping to get this up to $2k in August.


Overall things are going great, minus not getting that big check.  I'm moving ahead, providing a great service/product, and people seem to be noticing. 

BuffaloStache

  • Pencil Stache
  • ****
  • Posts: 697
  • Location: Colorado
Re: Employment Dilemma--Take New Job?
« Reply #194 on: July 27, 2018, 07:21:06 AM »
Congrats! Hopefully you get paid soon, but I'm glad to see you are moving on to other things to ensure you still get income.

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #195 on: July 27, 2018, 09:59:24 AM »
Also, one other big update: I have formed a co-counseling relationship with another attorney who I've known for years.  She mostly handles domestic but those clients eventually get employment related claims. She has brought me on board for two BIG employment law contingency cases. These are her clients, but we are going to split the fee and the work 50-50.  I've known her for years (she represented my mom in her divorce) and I trust her a ton.

The first case involves a veteran who worked for our county's Veteran's Office.  He served in Iraq and has PTSD.  His employer put him through a bunch of tests, ignored his own doctor's reports, and then fired him for having PTSD.  I mean that's the headline -- "Local Veteran fired from Veteran's Office for Having PTSD."  He was making $78k/year.  Should be a great case if I can figure out all the public sector BS that comes with these claims.

Second case involves wrongful termination/age discrimination.  She was making about $30k/year, but she had been there for 16 years and planned to work there until she was 70 (six more years).  Evidence of a hostile work environment seems pretty clear.  Again, could be a big case if we can get a decent front pay award.

I myself have brought on a potential sexual harassment claim.  She began a consensual relationship with a supervisor, which then turned very ugly.  He then began texting her from his work phone calling her a prostitute, calling her a degenerate, etc.  The texts are flat out scary.  She reported him to management and they changed who my client reported to.  Insufficient as far as I'm concerned. The obvious issue here will be tying this to her employment, but I think it's not that far of a leap given that some of these texts do in fact discuss work.


So anyway, three potentially big contingency fee cases.  They probably won't come due this year, but I'm setting up a nice 2019 already.

civil4life

  • Bristles
  • ***
  • Posts: 286
    • My Journal
Re: Employment Dilemma--Take New Job?
« Reply #196 on: July 27, 2018, 03:40:07 PM »
The first case involves a veteran who worked for our county's Veteran's Office.  He served in Iraq and has PTSD.  His employer put him through a bunch of tests, ignored his own doctor's reports, and then fired him for having PTSD.  I mean that's the headline -- "Local Veteran fired from Veteran's Office for Having PTSD."  He was making $78k/year.  Should be a great case if I can figure out all the public sector BS that comes with these claims.

I have a similar case except when I requested ADA Accommodations, I was put through a battery of tests.  I was not fired but faced retaliation and hostile work environment.

TVRodriguez

  • Bristles
  • ***
  • Posts: 368
Re: Employment Dilemma--Take New Job?
« Reply #197 on: July 29, 2018, 06:27:33 PM »
On the tax stuff, do what works for you.  I use Quickbooks online and find it very easy.  I like having direct deposit, payroll taxes paid as I go, and easy bookkeeping at my fingertips.  And it helped when I added employees b/c I pay them by direct deposit, too, and I use the same program.  But I have friends who found it too difficult or were just not interested in learning something else and signed up with a CPA.  You have to decide where to spend your energy and your time.

On the work stuff, it sounds like things are going well.  I'm happy for you.

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #198 on: July 30, 2018, 06:51:13 AM »
On the tax stuff, do what works for you.  I use Quickbooks online and find it very easy.  I like having direct deposit, payroll taxes paid as I go, and easy bookkeeping at my fingertips.  And it helped when I added employees b/c I pay them by direct deposit, too, and I use the same program.  But I have friends who found it too difficult or were just not interested in learning something else and signed up with a CPA.  You have to decide where to spend your energy and your time.

On the work stuff, it sounds like things are going well.  I'm happy for you.

It's sad to admit this, but...I am currently running both Quickbooks Online and Quickbooks Self-Employed because I still haven't made the tax decision.  I mistakenly signed up for the QBSE, which is only good for being taxed as a sole proprietor.  So then I signed up for regular Quickbooks Online, which is a little more complicated but just as straightforward.

I am going to meet with a CPA this Wednesday for lunch to get everything set up and finally make the sole proprietor vs. S-Corp decision. 

I've been playing around with this calculator https://www.incfile.com/s-corporation-tax-calculator/, and the obvious conclusion is this: the lower your income, the more marginal the distinction (if any); the higher your income, then being an S-Corp is very, very advantageous.

***

I guess the strange feeling for me, and I think I've posted about this before, is that I have no intent on turning my firm into a huge multi-attorney firm or working like crazy.  I just want to gross anywhere from $80-120k per year, and that is basically my current trajectory. If I land a couple huge settlements in a year then I will probably just take it easy for the rest of the year and re-charge.

So I don't see myself earning more than $150k per year.  Take away the big 401k contributions you could do with that, HSA contributions, business expenses, etc., and the tax savings seem to be a couple thousand dollars, which I'm sure I'd be paying in accountant fees anyway.

So again, I'm sure you guys see which way I'm leaning, but maybe this CPA will beat me over the head with a frying pan this Wednesday.
« Last Edit: July 30, 2018, 10:17:46 AM by ReadySetMillionaire »

ReadySetMillionaire

  • Pencil Stache
  • ****
  • Posts: 831
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #199 on: August 01, 2018, 01:08:24 PM »
Met with the CPA for lunch today.  He advised sole proprietorship.  Ohio has no state income tax for sole proprietors up to $187,500.  We discussed possible numbers and he said the differences would be so small that the complications of an S-Corp wouldn't be worth it for a long while.

He also noted (correctly) that going from a sole proprietorship to an S Corp is very easy, but going from an S-Corp and dissolving it and all that and back to a sole proprietorship is more difficult.

Finally paying myself this Friday!