Author Topic: Employment Dilemma--Take New Job?  (Read 50614 times)

nedwin

  • Stubble
  • **
  • Posts: 108
Re: Employment Dilemma--Take New Job?
« Reply #100 on: March 30, 2018, 01:37:50 PM »
RSM - I have read through this entire thread and wish you luck.  I would do the same in your shoes.  My only advice would be to sit down with a CPA to determine entity selection and tax structure, which others have suggested and you've agreed.  My dad was a sole practitioner, and he structured his business as FIREby35 and TVR described, except he used a prof. corporation entity.  I think MMM has also structured this blog in the same manner.  Also, you should be very careful doing work on a client's file if there is no signed fee agreement.  I don't know about Ohio, but no signed fee agreement is a violation of the professional rules in CO. 

FIREby35

  • Pencil Stache
  • ****
  • Posts: 676
Re: Employment Dilemma--Take New Job?
« Reply #101 on: March 31, 2018, 09:46:39 AM »
I think both of you (FIRE and TVR) are correct in your summaries.

To FIRE, however, my understanding is that a single member LLC is taxed the exact same as a sole proprietor.  I think the tax benefits there start to kick in when you have a multi-member LLC or have staff/associates working for you, which I don't have yet due to my immediate needs to keeping overhead low.

As for the S-Corp analysis, I believe you are exactly correct, TVR.  My biggest concern in doing that is the "reasonable salary" requirement.  While I am bringing clients with me and I am hopeful that I have relatively immediate revenues, I'm pretty hesitant to commit to an S-Corp and thus require me to pay myself a "reasonable salary" when I'm entirely uncertain about revenues.  If I get this thing up and running and I'm making a consistent income, then I will likely re-organize to an S-Corp.

All that said, I have two meetings with CPAs here in the next few weeks, and I plan on running some of this stuff by them.

And beating a dead horse here, this is why I'm giving myself a couple months before launching.  I want to get all of these ducks in a row so I'm working on getting clients and doing legal work instead of spending a day on entity formation.

Actually, what I was talking about was an LLC where I elect to be taxed as an S-Corp :)

Don't get hung up on the reasonable salary part. Over the years, I spoken with multiple people who just hold on very tightly to opinions they formed without getting all the info. It is frustrating to me to see/hear people get caught on the same problem when it really is not that big a deal and it costs them lots of money they worked hard to obtain. The key thing is to go get enough information to make an informed decision where you accept the risks you can tolerate.

As for a "reasonable" salary, if you have a new business with no demonstrated profitability and a single owner/employee then a salary of $0 could be considered reasonable. After all, it would be literally impossible for you to declare a salary larger than your gross receipts (which are $0!). It would be business suicide to create a payroll expense larger than you receipts (of $0!) or a high percentage of your gross receipts (funded by debt mascarading as a "normal" business practice called a "line of credit" many use to pay themselves heavily taxed "salaries" in an epic misunderstanding of business and money). "Reasonable" depends on many things. I, personally, don't even agree with TV about the percentage proportions he mentioned but admittedly said were just ball park ideas. Don't take offense TV, you can use any percentage you are comfortable with! :)

My personal approach is to pay myself a 55k salary (with full 401k contributions reducing taxability on this salary even further) even while bringing in more than 500k in receipts. How is that reasonable? Well, it is extremely reasonable if you have any experience managing cashflow for a business like this. 500k in receipts but 175k in one case and another 100k on the other top 3 cases during the year. That means I don't have a steady income stream and I need to be very conscious of how I steward the cash I get. I certainly don't want a large recurring payment to myself that does not serve my business model of taking in large  sums at unpredictable intervals. Don't forget, my employees do reasonably demand to be paid their salary regardless of my high or low cash flow situation. I need low recurring expenses to survive the draughts and that includes my salary to myself. Actually, lowering my salary is the best, most flexible lever/tool I have for protecting my cash flow.

Using the above approach, I have never used the line of credit I set up "just in case." That is "good business" and, therefore, highly rational, reasonable and defensible in case of a highly unlikely IRS audit, in my opinion. I accept all risks associated with this plan and receive the benefit of an efficient effective tax strategy every April.

BTW, if the "big risk" is an audit then what are your real dangers/risks? If you make a rational, reasonable plan and use a CPA and then the "big risk" happens (i.e. you get audited) then you certainly won't go to jail or be heavily penalized. You might be told your plan was too aggressive and be required to pay back some money to the government. But, since a tiny, tiny percentage of people are audited this is a small risk. Also, you are a mustachian so you will likely have saved and invested the money for a period of years. You would have funds available to pay any back taxes. So, if that is all true why would you "overpay" the taxes as a protective measure against this risk? The risk is actually small and manageable. I wouldn't pay thousands of dollars a year as a self-imposed insurance against this risk. But, again, that is just me and my risk tolerance.

Much more important than my personal opinion and approach is that you gather information so you can make that determination for yourself. That is why I suggested interviewing multiple CPA's. I talked with 3 and got different variations on the same advice ranging from pretty conservative to pretty aggressive. It was clear to me, there is no "right" answer. I then made my decisions. Take the time to get info straight from a CPA. Weigh it, form a plan and then implement it (using the CPA you liked best).  As long as you do that, any choice you make will save you lots of money over the default - which is half-formed opinions based on little incomplete pieces of information from random people who won't actually be filling out tax forms and writing checks for you to the IRS. You have to become the expert on how and why you do things in your business - including your tax plan.

Lastly, don't let it overwhelm you. Give yourself a year to gather the info and implement the plan. You are doing great by simply thinking and talking about it.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 676
Re: Employment Dilemma--Take New Job?
« Reply #102 on: March 31, 2018, 05:33:57 PM »
RSM -

Sorry for getting tunnel vision on the tax stuff.

As for your plan with the real estate litigation, you have this idea that real estate law will be a good niche. I say, test it out.

"Testing it out" is different than "making it happen." Making it happen implies that you will, come hell or highwater, be a real estate litigation lawyer. I don't think that is the right attitude.

Testing it out implies you will see if there is sufficient demand for this particular service to sustain you and your family in an acceptable economic state. This is how you do it: while out and about, you say, "I just opened my practice, so I'm taking any case that will keep the lights on so please send any friends and family. Even if I can't take it, I'll help them navigate finding an attorney. But, I have experience in real estate matters and I hope I have enough business doing just real estate litigation someday." This statement will direct other people's minds to what you do and they will naturally ask you any relevant questions - if they have them. Then you will begin to see how much of that work exists, if it pays enough and if you like the people that will be your eventual client base, etcetera.

You can learn to see who you need to be talking with! Where you should be to find your clients and other important pieces of information. For example, at a conference for the local chamber of commerce, if you make the above statement enough times you will eventually connect with whoever in the room owns enough properties to enjoy talking with a real estate lawyer over coffee in a conference room to start the last Friday of the month (lol). Trust me, your local chamber of commerce is crawling with real estate agents, mortgage vendors, real estate developers and small time landlords (and lots of insurance salesmen and women!). Then you repeat that process over and over and over again - for years. Eventually you will know many of the people who would be your potential client. If you are paying attention you will be looking for common characteristics these people have so you can find more - if you want or need more clients.

If you get enough real estate business then your plan is a good one. If there is not enough real estate business then your plan is a bad one.

Don't get attached to your plan. Making a good or bad plan has nothing to do with you as a person.

Testing it out implies that you will evaluate the evidence in front of you. If you don't get enough business then you can always make a new plan and test that out.

Eventually, you'll find something that clicks.

That is your niche and finding it is a beautiful thing.

ReadySetMillionaire

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #103 on: April 02, 2018, 09:06:44 AM »
Thanks for the advice and wisdom.  I think your post explains (in much more detail) how I plan to go about marketing like a specialist and practicing like a generalist.

I guess my follow up question for you (and the board) would be how "all in" to go with my marketing plan.  Should my website, business cards, and stationary reflect real estate litigation?  I'm thinking I should have at least a website about being a real estate litigation specialist, and also have a section about civil litigation.  And then, as you suggested, I can tinker this the way I see fit as clients actually come in.

I'm actually going on vacation this Wednesday and am writing my marketing portion of my business plan, and while this is not going to be some concrete doctrine, I will probably post it here so each of you can see more of where I'm coming from and my plans moving ahead.


Embok

  • Handlebar Stache
  • *****
  • Posts: 2332
  • Location: So Cal
Re: Employment Dilemma--Take New Job?
« Reply #104 on: April 02, 2018, 10:24:52 AM »
RSM:

Saw @lhamo 's message, read your entire journal, and as a 30 year real estate lawyer in big firms and now my own small one for the last 7 years, have a few responsive thoughts:

1.  Your decision to start your own practice and get out from your boss from hell is sound.  The way you have described she is running her practice sounds dangerous at best, unethical at worst.  Plus you need to value your own health, including your mental health.  The sooner you can leave, the better.

The practice of law need not be miserable, nor full of emergencies.  Once a litigation is started, organization is key, but there is a fairly straightforward set of deadlines. (I'm a transactional lawyer, and the timing of deals is more variable). Your boss is obviously quite disorganized, and is a hazard, and is looking for a scapegoat. So she is dangerous to you.  (A side note:  in California, it would be unethical to represent a client without an engagement letter, though one engagement letter can cover several matters, as with a big corporate client such as an insurance company.)

2.  Your planning sounds thorough.  I second the advice about finding a great strategic advisor type of CPA.  This may or may not end up being the CPA who does your taxes.

3.  Real estate litigation is a great field.  I work in the area of commercial real estate.  We frequently need litigation help, particularly in down cycles.  There is a lot of work in the area, at least out here.  Most RE litigators start as civil litigators, and gradually specialize.  Good RE litigators are hard to find, as it is a lot of work to learn enough to be a great litigator and to learn real estate.  So it could be a good niche. 

Writing and getting articles published is a great way to start learning the field and gaining credibility.  That then leads to speaking gigs, which build your reputation.  It is quite easy to get published if you can write a decent legal article: most legal and business journals run on the voluntary articles written for free (by lawyers), and need a constant supply of fresh ones.  I *don't* mean law reviews:  I mean the kind of "how to" articles in trade magazines that people in the real estate and finance business read.   

It is easy to find a topic:  whenever you stumble on an issue you have to research, and it is not clear, chances are it won't be clear to other folks and will make a good article.  Keep them short.  Publish 10 and you become seen as an expert. 

Every time you publish an article, try to get it republished elsewhere (twice the exposure for the same work) and add it to your resume and website.  You likely won't get clients directly from publishing but you will gain knowledge and credibility, as when a potential client looks you up, he or she will see you have written on the topic.  And when you have the opportunity to pitch a client, your knowledge will show.

The other advantage to RE litigation is that it is local and unlikely to be replaced by computers. 

Be sure to get a sufficient retainer up front every time, make it evergreen, and do an engagement letter with every client every time.

Find a calendaring system and billing system that works for you;  we used one that was a disaster,  then we moved to Rocket Matter, which is good and has worked pretty well for us.  Get a backup system in place for your computer files and use it religiously or set it up so it runs automatically. Keep your time daily and sent out bills timely -- and cut off clients who don't pay promptly.

If you have any questions I can answer, just let me know, and I'll try.

Good luck!


civil4life

  • Bristles
  • ***
  • Posts: 444
    • My Journal
Re: Employment Dilemma--Take New Job?
« Reply #105 on: April 02, 2018, 10:39:32 AM »
RSM,

Not is the business as stated before.

Why not take a look at your competitions websites?  I know they may not be directly in real estate, but might help address your needs.

Think about who will be looking for your services.  How will they want to seek you out?

I cannot speak for the specialist side, but last year I was looking for legal representation for a civil matter related to employment.  As a consumer my main criteria was experience in the area, affordability, and responsiveness.

Responsiveness ended up being one of the most important.  If they did not respond to my inquiry within 24 to 48 hours they were not even considered.

I look at the quality of their website.  I do not need a super savvy website, but I expect more than a simple wordpress template.  I figure if they do not even take a little time to provide quality information on a website, I am not going to get much better in person.  Also, simple to navigate.  Definitely include a self picture.  People want to know who they are dealing with.  Although we do not want to admit it, on some level we all judge a book by its cover.

I ended up going with a sole practitioner.  Partly because the big firms did not want to give me the time of day.  The lawyer I went with discussed my issue in detail and reviewed some material and provided some feedback prior to me hiring her.  She has been very helpful thus far.  She will be starting depositions this month.


FIREby35

  • Pencil Stache
  • ****
  • Posts: 676
Re: Employment Dilemma--Take New Job?
« Reply #106 on: April 03, 2018, 07:21:14 AM »
As for how to market like a generalist and grow a specialty, I would put on your website, business cards, letterhead and anything else something that says, "General Litigation and Real Estate Law" or something to that effect. "General Litigation" means "I'll take anything." The average customer will assume whatever their case is fits within "General Litigation." The real estate clients will know you "specialize" in their issues.

The best marketing tool I have ever made is an excel spreadsheet with the address of every friend, family member, client who came in for a consultation, client who hired me, professional I met at a chamber of commerce or other community event or any person I have met in anything resembling a professional capacity. I have them organized by category. These are the people who form your "base." They personally know you and, if you are doing a good job, they are neutral about you or they like you. You need to remind them you are open for business periodically. They will hire you or refer their friends.

Your first marketing act can be to create your current list and send them a postcard telling everyone, "I've moved!" or "I've taken the plunge and opened a business!" Once you have your office and everything set up, have a grand opening (it can be six months or a year after you open, btw). Invite your family and friends onto this new journey with you. Let them see, "how it all began." Get them personally invested in seeing you succeed. You have to make sure everyone in your life knows how they can help you. The answer to that question is: by referring a friend or family member to you! All you are asking for is work. Then win their trust by truly serving the person in front of you. If you can't take the case, help them find a good lawyer.

BTW, helping someone find a good lawyer is an actual positive thing you can do. The average customer has no idea how to evaluate an attorney. I see people all the time who are choosing between me and another attorney I know is under review for serious bar complaints (a public order from a judge referring him to the bar for lying on the record about juror and witness tampering in murder case. Yikes.) They literally know nothing. So, if you can direct them to a reputable lawyer in any specialty then your friends and family will feel like they "know a guy" who can connect them to "the best" lawyer in any given area. They will then always call you first which gives you "first look" at all the cases. It is a real win-win. So, start your marketing with a small, strategic acts of kindness :) Even better news, this approach is damn near free.

That reminds me, for more info on how to give in a way that is helpful to others and yourself, read the book, "Give and Take" by University of Penn sociology professor Adam Grant.

ReadySetMillionaire

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #107 on: April 03, 2018, 10:30:15 AM »
Thanks for the detailed response on my real estate litigation idea, @Embok .  I have definitely been thinking about blogging about real estate law in the early part of my practice--and I think the idea to get the content republished is an especially good idea.  I was also going to post free forms on my website (perhaps a free tenant application form and three-day notice form with my name and information on the bottom).  Basically, provide value to people before they hire me, and then hopefully they will call.


Thanks for sharing your experience as a consumer @civil4life .  I will remember your consumer experience when building my website.  Right now I'm probably leaning towards Squarespace due to ease of use and its mobile compatibility, but I'm open to suggestions.


And @FIREby35 , I have already created a spreadsheet of all family, friends, colleagues, and existing clients who will receive my announcement letter.  I'm still working on getting addresses, but luckily I just got married last year and have a spreadsheet with lots of names and information on there.


I also just referred a client to one of my eventual office share attorneys.  I was conflicted out, but this potential new client was very grateful for me steering him to an attorney I trusted.  Furthermore, the attorney I referred him to let me know that he is going to need help with appellate briefs in June.  Hopefully this is just the start of a great referral relationship.

shawndoggy

  • Bristles
  • ***
  • Posts: 322
Re: Employment Dilemma--Take New Job?
« Reply #108 on: April 03, 2018, 11:29:57 AM »
Hey RSM this is a very specific piece of advice so take it how you will... do you have an Avvo profile and/or have you posted any content there?  When things were grim around here economically (say 2010-12) I used a lot of my free time to answer questions posted on Avvo.  You can narrow the questions that you see geographically and by subject matter, and you can set up auto notifications when there are new questions in your chosen area. 

I do transactional work, which in my small burg includes corporate and real estate work (mostly commercial RE), including LL/Tenant (again, skewing commercial).  Anyhow, I ended up posting answers to a lot of questions in corp/LLC and the LL/Tenant fields and low and behold my phone started ringing as a result.  Like a lot of calls, actually, for the amount of time invested (haha, my phone never rings as a result of my MMM posts).  I think I probably answered fewer than 100 questions and none since 2014 or so. 

It took me a while to figure out, but for me the sort of leads that this work generated was not what I was looking for, and I quit posting once I figured out that I was mostly getting consumer-oriented leads.  However, seeing as you seem to be looking to build a consumer oriented practice, I'm throwing this experience out there.  I did (and still do) get quite a few calls... many of which may be the kind of stuff you're actually looking for.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 676
Re: Employment Dilemma--Take New Job?
« Reply #109 on: April 03, 2018, 01:55:05 PM »
I never used square space. But, I did use wix. It was a great, cheap way to have a low-cost website. It worked for many years until I really started doing digital marketing with intention. So, you might make a quick comparison between the two and go with the better option.

Embok

  • Handlebar Stache
  • *****
  • Posts: 2332
  • Location: So Cal
Re: Employment Dilemma--Take New Job?
« Reply #110 on: April 03, 2018, 04:56:26 PM »
RSM:

I'd be careful about blogging, for three reasons:

1.  It is a *lot* of work.  You need to write something at least every week or so. It has to be interesting, pithy and short.  And correct.  Lawyers will come out of the woodwork to leave unanswerable questions on your blog under pseudonyms, asking things they have not figured out, either because they are too lazy to do the work, or the questions have no easy answer.   If you answer, it eats nonbillable time.  If you don't, you look like you are evading questions.  (I blogged for a national online real estate site for several years, and quit for this reason.)

2.  You don't get the reputational value or validation of having your articles published by a third party when you blog.  Most publishers of legal and business magazines won't republish your blog posts.  They want you to publish pieces in their magazines, but will let you copy those articles to your website.  That's the better way to show your expertise.  The article is more impressive if it is published by a real estate magazine, or your state bar real estate journal, or the like.

3.  As you are a litigator, other lawyers opposing you will read what you write, and may try to quote your blog out of context to support their positions.  I've had this happen in foreclosure litigation our firm was handling.  I've never had that problem with an article published in in a business or legal publication as opponents don't want to add to your credibility -- but don't feel they are risking that if they quote or misquote your blog.

TVRodriguez

  • Pencil Stache
  • ****
  • Posts: 773
Re: Employment Dilemma--Take New Job?
« Reply #111 on: April 04, 2018, 09:24:06 AM »
Great points here.  So much good information.  I wrote a reply post the other day but I see it got eaten and never posted.  Oh well.  A few thoughts.

1.  I agree with FIREby35 on the low salary points.  You are not required to pay yourself anything right away.  What is "reasonable" can change year-to-year, heck even month-to-month.  But it starts with what your actual revenue is, if there is revenue at all (hopefully there is).  Some years I've made more money and my W-2 income went up.  Some years I made less and it went down.  In all years, I had some W-2 income and some distribution income.  One good thing about W-2 income is that you can set up a SEP-IRA and put 25% of it into the SEP.  But don't worry about that now.  Focus on getting yourself set up.  Be impatient for profits.  The good news is that you don't need a lot of money to start a solo practice and you have a spouse who can cover your personal overhead at the outset.

2.  I totally agree with Embok on the blogging points.  If you're going to put in the work to write it, get someone to publish it.  There are lots of places to publish.  Personally, I don't do it b/c I don't like to spend that non-billable time.  I've seen some colleagues have some success with email newsletters, but I don't do that either b/c I get so many that I don't read.  But if you do one a month, it is a way to keep your name popping up in people's inboxes.  It needs to be short, well-written, and correct.  And if you manage to write something that you get published, use a condensed version in your newsletter and direct people to the publication. 

3.  I agree with shawndoggy on using avvo.  Their rating point system is driven by an algorithm, so filling out your profile brings your point value up right away.  Getting endorsements from other attorneys also increases your point rating, but client reviews do not.  Still, if you can get some client reviews, prospective clients like to see that.  Published pieces also increase your rating, btw, but blog posts do not.

4.  Networking:  Look at networking within the real property section of your state bar.  Lawyers get conflicted out and pass work to others they know.  Also, if you attend your section events regularly, not only will you learn things but other real estate attorneys will start to see you as someone who keeps up with real estate law.

I network selectively, since I don't like to take time away from my family.  Very rarely am I out of town at an event or attending cocktail/dinner time meetings.  Mornings are full for me with breakfast with my kids and school drop-offs, so I avoid BNI breakfast meetings, too.  I found a good lawyer lunch group that meets once/month and that provides all the CLE I need.  I joined a local estate planning council (my area) that meets for dinner once/month, and I attend about every 2nd or 3rd month.  I joined a local women's professional group that meets for dinner once a month, and I attend that about every 3rd month.  I get business from other lawyers at all three.  I also make a point to have networking lunches one-on-one about 3-6 times per month.  I go to my bar section meeting a couple times a year when it's convenient.  And I attend a once yearly important estate planning conference.  Since I work alone a lot, I enjoy the networking time and learn from other attorneys there.  I've made friends, and friends are good.  Friends who are good lawyers who can help you out are even better.  I also make sure I offer myself as a resource to them--you can't show up and only expect to get business if you're not willing to give.  Oh, and listing different networking groups in your avvo profile can raise your rating, too.

ReadySetMillionaire

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #112 on: April 09, 2018, 10:27:23 AM »
Thanks for the advice @Embok and @TVRodriguez.  I will certainly take that into account.

To update, I just put in a three week notice this morning.  Some backstory, because (per usual) I need somewhere to vent. And I really deliberated telling the entire sequence of events, because it definitely involves a mistake on my part, but I'm not one for being dishonest.  So here it goes.

The Monday prior to leaving for my vacation in Maine, our office received a letter from a subgrogation lienholder on a PI claim we settled two months ago.  I never heard of this subgrogation interest on this file.  So I went back and looked in the file and, there it was, a letter from this lienholder dated 10/12/2016.  This letter was in a completely irrelevant folder (NOT in the subgrogation folder) that I obviously failed to look at thoroughly enough.

My boss, who's been handling this file for almost two years now, reviewed everything prior to settlement and OK'd everything.  Even with that said, and for all the ways I can shift blame (most especially the disorganization of the file after four attorneys worked it), I'm really beating myself up for not catching this.

So I told my boss about receiving this notice, and she seemed to take it well.  Prior to my leaving for my trip, I had my secretary print all emails relating to this file.  This included an email from Subrogration Lienholder A (the one I was aware of) to my boss dated 12/01/2017 (prior to me being here), and this email included an attached chart which clearly shows Lienholder A did not pay for one of the bigger bills.  That obviously leads to an inference of there being a Subrogation Lienholder B.

In my defense, this email and attached chart was not printed or in the file when I inherited it. I had no knowledge of this chart from Lienholder A.  But, I still feel like I could and should have caught this.

Anyway, today was the first day back from vacation.  My boss scheduled back to back meetings with clients at 9:00 and 9:30 at Office Location B on my first day back without asking.   Both of these meetings required some prep on my part, but okay, she's my boss, whatever. 

Before I had sat in a chair for 15 seconds (not exaggerating here), she absolutely lambasted me about this PI file.  Like you guys have been saying for months, she was hellbent on putting the entire blame on me for this. She was screaming with the doors open and her hands were shaking she was so mad.  She was bewildered how I didn't catch this.  Perhaps rightfully so, but again, it was clear she was not taking any of the blame for this mistake.

So I went into my car, called my wife, and told her fuck this, I just wanted to put in my notice now.  My wife gave me the green light. So after driving for a bit, I turned back around, went back to where my boss was, and gave my boss three week's notice.  I left things on good terms and told her it was me, not her (mostly relayed health concerns I've been having since I started).  I told her I thought a lot of her personally and as a lawyer, but that this just wasn't going to work out long term.

And that's that.  I'm going to transition everything professionally and as smoothly as possible.  After April 27, I'm probably going to take two weeks completely off (other than answering new clients--can't let those pass up).  I need to work on my practice before working in it, and I'm looking forward to that.

Thanks again for the ears/eyes.  Cheers.

TVRodriguez

  • Pencil Stache
  • ****
  • Posts: 773
Re: Employment Dilemma--Take New Job?
« Reply #113 on: April 09, 2018, 11:41:44 AM »
Congratulations!  I'm very happy for you.  It does not feel good to be yelled at, whether or not any of it was your fault.  Sounds like you handled it well, and you are leaving on good terms (as good as can be expected here).  That the boss didn't fire you for something that made her that mad tells you that it's more her than you.  You'll do fine.  Good wife you've got there, too.

Embok

  • Handlebar Stache
  • *****
  • Posts: 2332
  • Location: So Cal
Re: Employment Dilemma--Take New Job?
« Reply #114 on: April 09, 2018, 01:36:35 PM »
Congratulations, RSM. Practicing law is very difficult and stressful at the best of times because of the responsibilities lawyers carry.   Taking care of those responsibilities is hard enough without being yelled at by a crazy boss. I know, I've worked for them too. You're much better off out of there. Your wife sounds great, and she probably understands you will ultimately be better off on your own.

Suit

  • Bristles
  • ***
  • Posts: 275
Re: Employment Dilemma--Take New Job?
« Reply #115 on: April 09, 2018, 07:01:48 PM »
RSM, regardless of making a mistake, it's horrible management on her part to react like that. Further evidence of her lack of professionalism. I'm glad you're getting out of there!

LeRainDrop

  • Handlebar Stache
  • *****
  • Posts: 1834
Re: Employment Dilemma--Take New Job?
« Reply #116 on: April 10, 2018, 06:59:43 PM »
Wow, she's got some nerve!  Congratulations on staying level-headed, consulting your wife, and giving your notice with professionalism.  I hope you are feeling excited about the new venture you're about to undertake!  You can do it!

shawndoggy

  • Bristles
  • ***
  • Posts: 322
Re: Employment Dilemma--Take New Job?
« Reply #117 on: April 11, 2018, 06:20:18 AM »
Congratulations, RSM. Practicing law is very difficult and stressful at the best of times because of the responsibilities lawyers carry.   Taking care of those responsibilities is hard enough without being yelled at by a crazy boss.

pardon the thread drift but this is such a great observation.  The one thing that I will add is that lawyers (at least the better ones) frequently blame themselves for not seeing every potential outcome and anticipating every potential pitfall.  We are supposed to be the "experts" after all.

TVRodriguez

  • Pencil Stache
  • ****
  • Posts: 773
Re: Employment Dilemma--Take New Job?
« Reply #118 on: April 11, 2018, 07:10:09 AM »
lawyers (at least the better ones) frequently blame themselves for not seeing every potential outcome and anticipating every potential pitfall.  We are supposed to be the "experts" after all.

Oh this is so true!
« Last Edit: April 11, 2018, 12:27:09 PM by TVRodriguez »

ReadySetMillionaire

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #119 on: April 11, 2018, 12:03:22 PM »
Welp, the boss called me in today and let me know that she thought there was no point in working out a notice.  She asked me to notify my clients, file substitutions of counsel, pack up my stuff and leave.  I was actually happy to hear this and I'm looking forward to just being done.

Looking back, I got the feeling Monday that she was relieved I put in my notice.  My secretary said she's been making a lot of comments when I'm not here about how I'm the first associate to challenge the way she does things.  I can somewhat sympathize with her--I'd be pretty mad if an associate tried to change things.  The key difference, though (and go back to my first post in this thread), is that she promised me I'd have autonomy and management authority.  That clearly wasn't the case, and so on top of everything else, we were butting heads.

So that's that. Time to pack up and start a new chapter.

Thanks for the 50th time to all of you.  Perhaps we should have a MMM attorney get together where we can chug some beers and laugh at the absurdity of this profession.  Cheers!

TVRodriguez

  • Pencil Stache
  • ****
  • Posts: 773
Re: Employment Dilemma--Take New Job?
« Reply #120 on: April 11, 2018, 12:28:01 PM »
This lady is something else.  Good thing you were ready for it. 

FIREby35

  • Pencil Stache
  • ****
  • Posts: 676
Re: Employment Dilemma--Take New Job?
« Reply #121 on: April 11, 2018, 02:24:55 PM »
Also, just want to chime in by saying that missing a subrogation lien is not an error which merits you losing even a moment of sleep or doubting your own competency. Don't get me wrong, subrogation interests and liens are an important part of any personal injury claim. But, it is a fixable problem. The biggest issue is that you have to do more work to correct it than if you had just done it right the first time. Therefore you reduce probability and you probably have to make an embarrassing phone call to the client which limits potential referrals from a satisfied client. That's not good and I wouldn't make it my standard operating procedure, but it is part of practicing law. You will have lots more opportunities to get it right.

Also, the true way to fix a problem like that is to create multiple systems that work in unison to ensure such an error never occurs. As you know, your boss did not have any such systems, the predictable error happened and the attorney was happy and content to let her management failures be blamed on someone else so she could escape the responsibility she has as the owner of the firm to ensure it never occurred again.

One could view all the procedures and systems I have as corrections to mistakes I've made. I have a lot of systems!

It was much easier for her to blame you than look in the mirror. Don't be surprised to see that pattern replay with many different people throughout your entire life and in a variety of contexts. It actually explains a large percentage of all human communication, in my opinion.

Maybe you already knew all I said above but I think its important to be clear about the nature of the error, especially since you felt enough embarrassment about it to consider not sharing it. Many people allow BS negative energy to be spewed at them and enter into their consciousness rather than simply seeing what it is and moving along. You should just move along and let her keep doing whatever she is doing. Again, don't let it cost you any sleep.

Finally, great job keeping your cool and pulling the trigger. Just the other day I was reminiscing on my own experience leaving my prior firm. It really is amazing what you can accomplish when you don't have people draining your energy with nonsense. You will be much better for this entire experience and for escaping it so quickly.

BuffaloStache

  • Handlebar Stache
  • *****
  • Posts: 1036
  • Location: The boring middle accumulation phase
Re: Employment Dilemma--Take New Job?
« Reply #122 on: April 16, 2018, 02:37:30 PM »
Congrats! Just want to remind you to keep us posted and don't be a stranger- let us know how this all works out.

Funny, I started reading this thread because I was also transitioning to a new job from a well-established-but-going-nowhere-job. I'm in a completely different industry and so far my experience has been completely different, but it's been good to learn about how things go sometimes. Best of luck with the new practice!

FIREby35

  • Pencil Stache
  • ****
  • Posts: 676
Re: Employment Dilemma--Take New Job?
« Reply #123 on: May 10, 2018, 01:43:18 PM »
Ok, I'll admit it. I have been checking in periodically hoping to see an update on your adventures while also knowing exactly how much work goes into starting a firm. With that said, someday, sometime, I selfishly want to hear how it's going :)

BuffaloStache

  • Handlebar Stache
  • *****
  • Posts: 1036
  • Location: The boring middle accumulation phase
Re: Employment Dilemma--Take New Job?
« Reply #124 on: May 17, 2018, 01:07:22 PM »
^ditto, hence my post above. I hope RSM gives an update eventually, but I can only imagine how busy the "beginning a new business" time must be.

shawndoggy

  • Bristles
  • ***
  • Posts: 322
Re: Employment Dilemma--Take New Job?
« Reply #125 on: May 18, 2018, 11:18:10 AM »
count me in too.  Looking forward to an update!

ReadySetMillionaire

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #126 on: May 21, 2018, 08:27:50 AM »
Thanks for checking in, everyone.  I thought about providing a bit of an update but haven't been on the forums much lately due to a lot of work and a lot of travel. Here's some bullet points.

(1) My last day at my old office was April 11.  I spent April 12 setting up a bank account, filing everything with the secretary of state, meeting to obtain an office space, and doing all the other behind the scenes things that make a law firm churn.

(2) I am very grateful for the advice here and working on my business plan for the past year.  I knew exactly what I wanted with everything -- where to get business cards, where to set up a bank, where to set up a website, where to look for office space, what computer to buy (Lenovo Thinkpad), etc.  This avoided a lot of "analysis by paralysis."  Everything -- and I mean everything -- is pretty much up and running at this point.

(3) I moved into my new office on April 22 and I absolutely love it.  The other attorneys are great and refer me work.  Granted, my space is about 8.5x9 feet, and it's more of a workspace than an office, but it's well organized and gives me access to internet, two conference rooms, fax line, phone line, receptionist, copier, scanner, unlimited paper, IT support, etc., AND it's in a great location, for just $400/month.  Can't beat it.

(4) All my clients came with me, including a huge trade secrets case that should carry me through the summer/early fall.  I refused to take any clients from my old boss, even though they wanted to come with me, because it just wasn't worth the dispute that I knew would ensue.

(5) Looking back on my previous transition, I think one of the big mistakes I made was going right from my firm job to the job with the solo with zero break.  To avoid making the same mistake twice, I spent most of April just giving myself time to breathe and working on my website, business cards, stationary, marketing strategy, etc.  I am very pleased with how all of this turned out, and I feel mentally ready. 

(If you want to see my website and give me some feedback, feel free to PM me.)

(6) Startup costs were a little more expensive than I anticipated, but not too bad.  Everything has so far been put on a 0% AmEx and my balance is at about $2,100.  I don't see needing to buy anything in the near future.

(7) I did not send out any invoices in April due to the limited work being performed, but I have them ready to be sent out the end of this month.  These invoices total about $10,000, mostly due to that trade secrets case.

(8) The best marketing thing I've done is browse dockets for credit card companies and mail out of town counsel that I am available to cover hearings.  I am covering 2-3 of these hearings per week for $100/hearing.  I've covered 7 so far in May (only started doing this a couple weeks ago), so that's $700.  My fixed expenses are about $700, so this alone covers it.  This is the easiest money there is.

(9) Now that I left my old boss, I can't tell you how many lawyers have said, "Ya, when I heard you left [firm] for [solo lawyer], I knew that was a bad idea."  It's been unanimous.  I only wish people were this candid prior to my leaving, but now I'm here, so oh well.

(10) I'm still debating whether to do appointment work or not.  I may sign up at the municipal courts (minor traffic offenses and misdemeanors), but covering for the credit card companies provides a similar per diem and is way easier.  I'll see how cash flow is here in the first couple months.


Probably the three biggest things:

(1) Living "mustachian" has flat out given me the opportunity to feel quite independent right now.  I live in a small home, drive a used Honda, my wife has a paid off Toyota, we don't have cable, we shop at Aldi's, etc.  Our monthly expenses are about $2,600 for necessities and averaging $3,800 total (lots of travel/weddings so far this year).  My wife earns (net) about $4,000 per month when she's not contributing to retirement accounts, so these couple months have given me the opportunity to get my practice up and off the ground without worrying about money.  My wife gets paid three times in June (so income should be around $6,000), which means that I can focus on big picture things instead of taking everything that goes through the door.

(2) The reason I think this is going so well is two-fold: I'm a control freak and have a short attention span.  The control freak part is obvious (always knew I would like doing my own business cards, website, etc.), but I underestimated how much I'd enjoy the other aspects of running a small business. The law law law law stuff gets old when it's day-in-day-out, so I like days (like today) where I'm focusing on marketing, accounting, and business development.  It provides a great break for me.

(3) Most importantly, my wife is the greatest spouse of all time.  She has been so god damn supportive that it makes my head hurt.  She listens to me babble on during our long walks, she shares in my successes, and she has been working hard and picking up extra hours to make sure we are comfortable.  Hell, this week, we are going on our one-year anniversary trip to DC, and instead of just putting in PTO time for Thursday and Friday,  she worked yesterday and is putting in three 10 hour days M-T-W, thus saving the PTO time in case we need it later in the year.  She's just been so great, and I'm really indebted to her.


So, this went longer than anticipated, but things are going well.  I've spent the last two weeks doing work work work, so this week I'm taking a step back and focusing on finances and marketing again.  I'm really enjoying this so far, and again, I thank you all for the encouragement and advice. 
« Last Edit: May 21, 2018, 08:58:50 AM by ReadySetMillionaire »

BuffaloStache

  • Handlebar Stache
  • *****
  • Posts: 1036
  • Location: The boring middle accumulation phase
Re: Employment Dilemma--Take New Job?
« Reply #127 on: May 21, 2018, 09:35:15 AM »
Congrats RSM! Glad to hear that things are going well.

...
(5) Looking back on my previous transition, I think one of the big mistakes I made was going right from my firm job to the job with the solo with zero break.  To avoid making the same mistake twice, I spent most of April just giving myself time to breathe and working on my website, business cards, stationary, marketing strategy, etc.  I am very pleased with how all of this turned out, and I feel mentally ready.

This is a great piece of advice, and something I didn't follow as well as I should've in my recent transition. Coming into any new opportunity with a refreshed mindset is invaluable to starting off on the right foot.

shawndoggy

  • Bristles
  • ***
  • Posts: 322
Re: Employment Dilemma--Take New Job?
« Reply #128 on: May 21, 2018, 01:58:07 PM »
Agree re decompressing between jobs... especially for a young lawyer upon whose desk the buck will now stop for all things.  You won't get another chance for a "real" vacation like that till you retire or quit practicing law. 

LeRainDrop

  • Handlebar Stache
  • *****
  • Posts: 1834
Re: Employment Dilemma--Take New Job?
« Reply #129 on: May 21, 2018, 07:45:05 PM »
What a fabulous update!  Cheers to your new business, and enjoy your anniversary trip with your wife!

FIREby35

  • Pencil Stache
  • ****
  • Posts: 676
Re: Employment Dilemma--Take New Job?
« Reply #130 on: May 22, 2018, 07:12:07 AM »
RSM -

What a great update. I am so glad to hear you are landing on your feet.

First, that idea for covering hearings is awesome. I have thought about that, but never put it into action. I sincerely think that will be my "retirement" plan. I'll go to court to cover some hearings for a few hundred bucks a week and have an excuse to go to courthouse and talk to everyone without actually having to be involved in serious cases. Even if you eventually stop doing that, never forget about it! That is a great retirement plan. Or, it is even a great way to earn money now while refusing "dogs" and taking on only the interesting cases.

You office share sounds awesome. I wouldn't worry about the size of your office. $400 per month is all I needed to hear!

As for appointments, your hearing covering situation is much better paid. I think misdemeanors in my area get $60 p/hour. I do federal court appointment work and even on that I only get $140 p/hour (and they just raised it). Actually, I took myself off the federal appointment list because it just doesn't pay enough to deal with some of the things you have to deal with doing federal defense work. But, I go back and forth on the federal court appointments. Those can be fun cases.

$2,100 to open a law office. Can you see how many lawyers exaggerate the cost of opening a firm?  It is not a lot of money for all that you are going to receive in terms of keeping a much larger percentage of your income and total and complete autonomy.

Man, they should have told you about the other attorney. Just remember not to hold back your true opinion in a similar situation in the future. What is any lawyer for if not for giving their true opinion about a situation? It's takes a lot of discretion to give your full opinion without "trashtalking" but you have to figure out how to do it. That's the job sometimes!

Hey, you know I love Shawndoggy, but don't buy the idea that "lawyers can't take vacation until they die or retire." I spent two months in Mexico in 2017 and five weeks in Mexico this year. I hear that it "must be nice" from a wide range of attorneys. We manage 236 cases at a time in various practice areas with lots of deadlines and hearings. If you want to know how to set it up so you can have freedom to take an extended absence with mental clarity and no anxiety, read "The E-myth" by Michael Gerber. Set up systems. Start now and in a few years you will have it all ready to roll. Yeah, it takes years of effort. But, it can be done and it is worth it.

Hey, sorry for giving advice. You know, I can't help it sometimes! But, great work. Now that you have crossed the threshold, it will get better and better and easier and easier if you just keep your integrity. Not having to chase every cent to make a high overhead will make it that much easier to do the right thing. After that, its all gravy!

Have fun. It's the ride of a lifetime.


TVRodriguez

  • Pencil Stache
  • ****
  • Posts: 773
Re: Employment Dilemma--Take New Job?
« Reply #131 on: May 22, 2018, 11:22:51 AM »
Woohoo!!  I am so thrilled to read this update.  Supportive spouses for the win!  And I'm with you on loving the shared workspace.  I've been in one for years and it still works for me.  Congrats on a great start.  Looking forward to hearing more great news as time goes on.

shawndoggy

  • Bristles
  • ***
  • Posts: 322
Re: Employment Dilemma--Take New Job?
« Reply #132 on: May 22, 2018, 04:30:36 PM »
Hey, you know I love Shawndoggy, but don't buy the idea that "lawyers can't take vacation until they die or retire." I spent two months in Mexico in 2017 and five weeks in Mexico this year. I hear that it "must be nice" from a wide range of attorneys. We manage 236 cases at a time in various practice areas with lots of deadlines and hearings. If you want to know how to set it up so you can have freedom to take an extended absence with mental clarity and no anxiety, read "The E-myth" by Michael Gerber. Set up systems. Start now and in a few years you will have it all ready to roll. Yeah, it takes years of effort. But, it can be done and it is worth it.

haha yeah I can be a whiner about it sometimes.  I do transactional work.  Average turn for a new matter is about 3 days, and a long matter would take 2-3 weeks.  Right now I have no idea what I'll be working on two weeks from now.  So two months would be the death of my career.  Anything longer than a week (with constant attention to the e-mail inbox and fingers crossed for no fires) is quite dangerous. 

But my litigation and estate planning partners seem to be able to shoehorn in some pretty cool extended vacations (>1 week) without ruining their practices, so I'm sure it can be done.

I'm in the home stretch now, so I've resigned myself to grinding for a a while longer and making hay while the sun shines.  ;-)

chrisgermany

  • Stubble
  • **
  • Posts: 209
Re: Employment Dilemma--Take New Job?
« Reply #133 on: May 22, 2018, 11:27:02 PM »
The e-myth is also available as a special Attorney version.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 676
Re: Employment Dilemma--Take New Job?
« Reply #134 on: May 23, 2018, 06:24:31 AM »
The e-myth is also available as a special Attorney version.

I didn't know that! I just read the original version and it blew my mind (about three years ago). I'm ordering the attorney version now.

ReadySetMillionaire

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #135 on: May 23, 2018, 11:10:48 AM »
The e-myth is also available as a special Attorney version.

I didn't know that! I just read the original version and it blew my mind (about three years ago). I'm ordering the attorney version now.

Per your recommendation in a PM, I read the E-Myth (attorney version) a couple months ago.  I'm going to read it again here soon.  It's a great book, and I should be working on those systems now.

ReadySetMillionaire

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #136 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: 322
Re: Employment Dilemma--Take New Job?
« Reply #137 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.

FIREby35

  • Pencil Stache
  • ****
  • Posts: 676
Re: Employment Dilemma--Take New Job?
« Reply #138 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.

civil4life

  • Bristles
  • ***
  • Posts: 444
    • My Journal
Re: Employment Dilemma--Take New Job?
« Reply #139 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

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #140 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

  • Pencil Stache
  • ****
  • Posts: 534
    • The Upwardly Mobile Life
Re: Employment Dilemma--Take New Job?
« Reply #141 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: 892
Re: Employment Dilemma--Take New Job?
« Reply #142 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

  • Pencil Stache
  • ****
  • Posts: 773
Re: Employment Dilemma--Take New Job?
« Reply #143 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

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #144 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

  • Bristles
  • ***
  • Posts: 372
Re: Employment Dilemma--Take New Job?
« Reply #145 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: 892
Re: Employment Dilemma--Take New Job?
« Reply #146 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: 754
    • My Student Loan Refi Story
Re: Employment Dilemma--Take New Job?
« Reply #147 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

  • Handlebar Stache
  • *****
  • Posts: 1688
  • Location: The Buckeye State
Re: Employment Dilemma--Take New Job?
« Reply #148 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: 676
Re: Employment Dilemma--Take New Job?
« Reply #149 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.