South Carolina Tax Attorney

While this doesn’t apply directly to tax law, or IRS resolution, I read an article tonight by the Associated Press (link) that says the U.S. House of Representatives passed a bill today by a count of 341-73 that would pay off student loans for lawyers in the amount of $10,000 per year with a maximum value of $60,000.  The catch is, the lawyer has to serve as a public defender or prosecutor for a minimum of three years.  This should help with high turnover rates in prosecutor’s and public defender’s offices. 

One really difficult hurdle public defender’s offices face is trying to recruit and hang on to attorneys who are graduating from law school is student loans that climb into the six-figures.

I guess I can make this apply to tax law because the total estimated cost for the U.S. budget will be in the neighborhood of $25 million per year.  That money has to come from somewhere - so I can imagine with all of these new spending plans, a new president coming soon, and a switch in political power in Congress either taxes will go up or the IRS will continue their aggressive swing to more collection efforts. 

I wish Congress would give some of that money to poor lawyers who work in private practice with mortgage sized student loans…oh well.

In reading some investment books recently, such as Robert Kiyosaki’s Rich Dad Poor Dad and Cashflow Quadrant, I have been trying to answer some questions that have arisen in my own life. Lawyers, unlike business owners, cannot “inventory” their services. Meaning, if the lawyer is not working, and billing hours, then they are not getting paid. On the other hand, a business owner can spend his days on the golf course and as long as he has developed a profitable system, the business can continue to grow and prosper without his input. This type of passive income can provide for the business owner long into his “retirement” years. What does a lawyer do when he is ready to retire? What does a young lawyer do to prepare for his retirement down the road?

In general, the strongest part of being a lawyer is the ability to practice in a large amount of practice areas. Within many of these niches there is a strong opportunity to make a lot of money. In order for lawyers to build this passive income, they will not be able to become a senior partner at a firm and then do nothing until they die and expect the checks to keep coming. The key will be to live below their means - to be read: not spending all that they have earned, and converting this earned income into passive income as efficiently as possible.

How do you turn that earned income into passive income? That’s the question? Real estate? Developing your stock portfolio? Purchasing a small business that provides passive income? These are all answers, but I imagine that it depends on your personality and what works best for your situation.

More on this to come…

One thing I’ve noticed in the last few months while I have been running the law firm by myself, is that the amount of responsibility I have really takes a toll on the time I have for “life” outside of working. I am curious to hear what other solo practioners (and other small business owners, in general) do to separate work from life. Another problem that I have is that I know and understand that I have to take a vacation at some point to get away from work, but I dread the thought of coming back to a pile of messages, e-mails, and files on my desk.

For example, I was out of my office for four hours last week at a mediation and by the time I returned, it seems like every emergency that could have happened did. Not only did this happen when I only had half the day left to sort it out, but I was supposed to be preparing for a full day trial that started the next morning. Needless to say, it was a long night. I guess it is also needless to say that there aren’t too many eight hour work days either. It seems to take much more time to practice law, manage a law firm, budget, pay the bills, etc., etc.

I imagine the “practicing law” part of the equation gets easier as you get more and more experience, so that can reduce the amount of time spent “working,” but how does an attorney go about automating his practice where time can be spent doing other, more important, things and the firm still continue on to make more and more money? Is this impossible? I know it works in other businesses? Possibly the small law firm is not a compatible business model.

My goal? A low overhead, autopilot-capable, profit-mining, work from almost anywhere business model. Does such a thing exist?

In my prior posts, I laid out my 10 steps for lawyers becoming better salesmen.  The first step is to find out what the client wants.  The second step in the process is to figure out how to provide the service your prospective client wants.  Since you did such a good job listening in the first place, you now know most of the details you will need as you progress through your representation.  There are always several potential solutions to your client’s problems and being able to navigate through all of the possibilities to provide the best outcome for your client is essential. 

I think this is the step where you need to actually know the law - or be able to learn it.  Being a new lawyer, I come into contact with areas of law that I am unfamiliar with, or unique situations in my practice area very frequently.  Rather than sending all of these prospective clients away to more experienced attorneys, or attorneys with specific knowledge of a practice area, if I can spot the issues then I can work hard and research the specific problem to represent my clients. 

Since I had to temporarily take over the operations of a law practice due to my boss being temporarily suspended, I have really felt the stresses of operating a small business and the pressures of whether you will make payroll, or be able to pay the bills. For a lawyer, obtaining new clients is what provides the cashflow to pay your bills, your staff, and yourself. For many experienced, or should I say, more well known attorneys, it may be pretty easy to attract new clients and have them retain you. For a young attorney, who probably looks younger than I actually am, I have had a problem convincing some prospective clients to hire me because of my age/inexperience/combination. I’m not sure if it is a lack of salesmanship on my part or just the outward appearance. I have had this discussion with several other, more established attorneys in hopes of trying to curb the problem and have more prospective clients retain my firm.

Here are some of the pointers that I have been given to increase the rate of prospective clients that retain my firm (and ultimately me, a young attorney).

1. Ooze Confidence. Clients can tell if you are nervous or if you don’t know what you’re talking about. Not knowing procedures and trying to provide too much information in the initial meeting was one problem early on in my practice. Once I started looking nervous like I didn’t know what I was doing, I definitely lost credibility when I told them what the fee was going to be.
2. Fake it ’til you make it! This kind of goes back to the first point. You have to look like you know what you’re doing. Eventually you will have to know, but at your intial client meeting/consultation, you just need to make your clients know that you will be able to handle their case competently, effeciently and affordably.
3. Do your initial consultations in your office. My office seems to be much more impressive than the conference room. My law license, undergraduate and law degrees dress the walls along with some other artwork, law books decorate the bookshelves, and there is always a stack of files on my desk. By showing that you have the credentials, and a backlog of work (i.e. the files on your desk) you give your prospective client confidence because other clients have confidence in your handling of their case.
4. Don’t price yourself out of your client’s league. The flipside to this is you don’t want to undercharge either. However, when you are a young, inexperienced attorney, you simply cannot command the same amounts of fees as more experienced attorneys.
5. Don’t give away too much free legal advice. I think I have some prospective clients who when they see a young attorney feel like they can “trick” me into giving them just enough free legal advice to answer all of their questions and handle their issues on their own. I have had to learn, not to be too nice, and try to fully answer all of my prospect’s questions without giving away the tricks of the trade.
6. Dress the part. When I started working, my office dress code was business casual. However, when I became the rainmaker, I had to step up my dress to impress the new clients. Now, a tie is generally necessary. It makes me look older and generally a little more high class. I think clients have the impression that lawyers wear suits and have fancy offices. If they don’t see what they are expecting to see, they may just pack up and go somewhere else and talk to someone who looks and dresses more like a lawyer.

If you have any more tips on how young attorneys practicing on their own can get more clients, please comment on this blog post. Thanks in advance for your participation!

The first step in helping a client is the find out what the client wants. How do you do that? Well, for starts, ask them. But after you ask, don’t assume that because you went to school for seven (at least) years to get your law degree, that you know everything. After you ask, it’s time for you to sit back in your chair and listen…really listen. If you start running off at the mouth, your prospective client is going to have a bad first impression of you. You don’t want to dominate the entire conversation. You want to take in as many facts as you can.

Don’t ask leading questions. You can’t fit every client into a perfect mold. You have to take the cases as they are, warts and all. Ask the client questions like, “tell me what’s going on?” Open then door and then get out of the way. Sometimes the client may just fill you will irrelevant facts that you don’t need to know, especially at this stage of your representation, and this is where you will need to rope them in. I have been very guilty of letting clients talk and talk - too much. However, you really need to find that perfect balance where you can determine the relevant facts that determine exactly what type of matter you’re dealing with. By knowing exactly what services you are providing, you can draft better contracts and charge more exact fees. When you take off into some representation not knowing exactly what you’re doing for the client, you may overcharge, or even worse, undercharge for your services. And once you have that contract with the client, they are not going to want to pay you any more money when the representation has concluded.