Omair Farooqui sensed that a pink slip might be coming his way.
Work had slowed considerably in the six months before he was laid off in June from the Palo Alto, Calif., office of Manatt, Phelps & Phillips, where he was an associate in the intellectual property practice.
Instead of sitting by and waiting for the inevitable downsizing, Farooqui stepped up his networking efforts with an eye on his post-Manatt future. Then, a month after he was laid off, Farooqui partnered with bankruptcy attorney Javed Ellahie, and the two started their own small firm in San Jose, Calif. — Ellahie & Farooqui.
“I just didn’t want to sit at home, looking for jobs or swatting flies,” said Farooqui, who is now in his eighth month of working for himself. “I’ve always wanted to [have my own firm], but I never had a reason to do it until I was laid off.”
Farooqui is one of a growing number of attorneys going solo or starting their own small firms — many of them recently laid off and unable or unwilling to return to big-firm life.
For some attorneys like Farooqui, getting laid off was the nudge they needed to act on the dream of getting out of the law firm game. For others, it’s an intimidating road they would never take if they had other viable options. Whatever the circumstance, experts say it’s a good time to be in solo practice or at a small firm. Cost-conscious clients are more willing than ever to retain smaller outfits that offer lower rates, and new solos can build their practice on that foundation.
Using ‘survival genes’
“You’ve got to kick in your survival genes right now,” said Susan Cartier Liebel, a legal consultant who focuses on solos and small firms. “Laid-off attorneys can’t look at this as a failing. They have to look at it as an opportunity. You may not voluntarily walk away from a six-figure job at a big law firm, but if that job no longer exists, you can justify going solo because it’s about survival.”
Deb Volberg Pagnotta knows a thing or two about surviving in difficult circumstances. She spent 12 years as a government attorney before she was dismissed from her position as acting general counsel of the New York State Department of Environmental Conservation when then-governor George Pataki took office in 1995.
“I found that it was challenging to be hired,” Pagnotta said. “There was a lot of competition. It’s similar to what is happening right now.”
For the next two and half years, Pagnotta ran a solo practice as an environmental lawyer from a New York office offered by a friend. “It’s very doable, but you have to do it correctly from the beginning,” she said. “The best advice I can give is to develop a niche area. General practice is too broad. A niche area that the person is really interested in is the road to follow.”
Pagnotta had to learn how to maintain the books, bill clients and market her services, all while keeping up with her legal work. Though she enjoyed being her own boss as a solo practitioner, Pagnotta took a job at a firm and later founded Interfacet Inc., a corporate and professional consulting firm based in White Plains, N.Y. She has developed programs to assist laid-off attorneys and attorneys returning to the legal work force after an absence.
M. Katherine Durant didn’t waste any time getting her solo practice up and running after she lost her job. Durant was told in late August that Sept. 30 would be her last day as a staff attorney with the Georgia Court of Appeals — a position she had held for more than 13 years — due to state budget cuts. On Oct. 1, she hung out her shingle and now assists attorneys in drafting appeal motions and provides other appeal-related legal assistance. Although Durant quickly embarked on her new venture, the fact that she had been laid off was something of a shock.
“I took that [Court of Appeals] job because I thought it would be secure. I assumed I would be there until I retired,” said Durant, who was among four attorneys cut from the appeals court last fall. “I learned a hard lesson: You’re never really secure. I decided I didn’t want to work for anybody else. I didn’t want to be in a place where somebody could lay me off again. I had to keep working, so I just closed my eyes and jumped.”
Durant started her solo practice right away because she needed money, but in hindsight she said it would have been smart to take a little time to talk to other solos about how they run their business.
Farooqui, the patent lawyer who started his own firm last summer, said he is highlighting his lower rates to potential clients. “When I sit down with small tech companies, my approach is: ‘Hey, I know you are using a big firm at $600 an hour, so why don’t you give me some of your second-tier work and I’ll do it for half,’ ” Farooqui said.
The pitch seems to be working. Farooqui said business is going well, though he is making about a third of what he made at his large law firm job. Last week alone, he signed up four startups as clients, although he added that he signed up no new clients the previous week.
“This isn’t for the fainthearted,” he said. “You’ve got to be able to keep your chin up. There are days when you think, ‘Wow, I didn’t bill anything today.’ But those are the days you contact five people and focus on networking.”
In fact, Farooqui spends much of his time networking with potential clients, preferably face to face. “I try never to eat lunch alone,” he said.
Of course, not all laid-off attorneys are jumping at the chance to start their own small firm or go solo. Jeffrey Gansberg was let go from his position in October as a corporate bankruptcy associate at Chicago-based Wildman, Harrold, Allen & Dixon. Since then, he has been weighing all of his options, including returning to a large law firm or launching a small firm with several other attorneys. “I’m trying to determine what to do with my future,” Gansberg said. “Whatever it is, it has to be the right thing. I’m not just going to take the first opportunity that comes around.”
Gansberg said he likes the idea of being his own boss and controlling his schedule at his own firm, but he also considers himself “risk intolerant” and is nervous about working outside the large law firm model. Thus, he has interviewed for positions at Chicago firms, while also doing some initial legwork on forming a small firm. With such a tight job market in Chicago, Gansberg said forming his own firm may be the only serious option. “I’m nervous, but I’m cautiously optimistic because I’m in a field that’s purported to really pick up in the coming months,” he said.
Legal consultant Liebel said attorneys should be thinking about their next steps, even if they haven’t been laid off yet. “You should always have a Plan B. If the ax falls tomorrow, you should have been thinking about what you will do,” Liebel said.