The conundrum every attorney faces is whether to work for a firm or strike out on his own. While this issue is not specific to minorities and women, I think lawyers in these groups face the question earlier in their careers, for a variety of reasons, ranging from business development to cultural fit.
My light bulb moment came when I realized that every firm partnership structure works on leverage. That leverage is built on associates and young partners working for high-paying clients. I quickly realized that while I might become a partner at a large firm, unless I landed a Fortune 1,000 client, I'd never be a decision maker. That sealed the deal for me, and, at the ripe old age of 28, I left the cosseted big-firm world and jumped off the cliff.
Of course, it is not easy to start a firm. Hurdles will appear, and business may not come immediately (never forget firms are businesses). Looking back over the past 16 years, here are some things every woman or minority lawyer starting his or her own firm should know.
• Choose a niche
Think of ways to stand out from the crowd. That will provide a toehold into the world of client acquisition, which is the key to a successful law business.
There's an old campfire joke that applies to business development: Two campers are hiking in the forest when a bear starts chasing them; the first camper puts on his running shoes, realizing he doesn't have to outrun the bear, he just has to outrun the other camper.
When I left a large Wall Street firm and looked around at the high number of attorneys in Dallas, I noticed that few attorneys were serving the legal needs of the Spanish-speaking market. So, as the old joke goes, I realized I didn't have to outrun every attorney in town. To make a name for myself, I just had to outrun lawyers targeting that clientele. As part of my plan, I decided to advertise for clients on Spanish-language television and in print media.
• Pick a practice area and don't stray, no matter how hungry you get
If a lawyer starting his own firm begins taking on matters in which he has no expertise, he will drown in work. That might seem good to someone just hoping for clients to walk through the door. But venturing outside one's expertise can result in losing -- or, worse, getting sued by -- a client.
• Avoid the temptation to lower fees
Many attorneys who hang out their shingles think they can win business by doing this. After all, their overhead is lower, so why not pass those savings along to potential clients in the form of lower rates? Don't fall for it. Such a strategy is a race to the bottom that leaves the lawyer the loser.
Don't believe me? Let's say contract attorney jobs typically pay $35 per hour. If a lawyer opening her own shop thinks she can build a law practice by billing $35 per hour, she should do the math: 3,000 hours x $35 = $105,000. Need I say more? Instead, think about fixed fees and alternative billing arrangements. Clients are more interested in those deals than typical hourly arrangements.
Another great way to overcome the inevitable hurdles of being a legal entrepreneur is to network constantly. Include legal organizations and other groups that provide exposure to potential clients. Choosing a niche practice will help focus efforts to choose these groups.
If the new firm is 51 percent female- or minority-owned, become certified as a Minority or Women Owned Business Enterprise. One never knows when such a designation will help land a client. Also consider joining women and minority bar organizations and chambers of commerce. Get involved, preferably in leadership.
Another key skill to develop is marketing. No matter how skinny the budget, a lawyer must market the firm and its practice areas every day.
• Maintain control
If forming a partnership, never, ever, under any circumstances dilute below 51 percent ownership. It is critical to stay in control of your destiny, and this means retaining actually authority.
• Give the new firm time
Don't throw in the towel if business does not build quickly. The longer you hang on, the more likely good things will come.
Angel Reyes III is the founder and managing partner of Reyes Bartolomei Browne in Dallas. He holds a J.D. from the University of Michigan Law School and an M.B.A. from the Texas Tech University Rawls College of Business.