Let’s talk workflow (or work-in-process, WIP), money and your stress. Guess what? The three are linked.
When we are not busy enough and there is no money coming in the door, this creates stress. When we are very busy, and we may be neglecting our families and friends — different stress. When we are crazy busy and still not making the kind of money we want — yet another kind of stress.
At the extreme, stress can lead to severe depression, crippling anxiety, substance abuse and relationship breakdowns. But at a minimum, it creates some level of depression and anxiety, job dissatisfaction and frustration, which ultimately carries over to your personal life.
It also opens you up to temptation. The desire or the need for money may cloud your better judgment.
You may take on files outside of your expertise. This could lead to negligence claims and law society investigations.
Or, like too many lawyers I have represented in law society proceedings, the deal looks so good that you may unwittingly became a dupe or pawn of fraudsters because you let your guard down, thinking that you are really helping a legitimate client.
Others still end up working for free, on the promise that there will be a life-altering payoff down the road.
So, if you are a new lawyer starting out on your own, or a more senior lawyer leaving the comforts (and protection) of a larger firm to test the solo or small partnership model, here are five tips learned from 24 years of experience:
1. You are the client’s lawyer, not their business partner. Many dreamers with no money seek out inexperienced lawyers and try to con them into thousands of dollars of legal work for setting up corporations, drafting agreements, IP work, even staving off litigation for some new business venture.
Short on cash, they will promise you five- or 10 per cent of the shares of the business that they are convinced will make millions. You, as a young lawyer, are intrigued, because the return on investment could make you rich. Except it won’t. What legitimate business owner is going to give away what could be hundreds of thousands or even millions of dollars for several thousand dollars of legal work? And why are they asking an inexperienced lawyer they never met before to do this instead of someone more senior if the idea is so brilliant?
Stand firm on your price. Here’s the right response: “If your idea is going to be worth millions, certainly you can find a friend who will put up $3,000 so I can draft a shareholders agreement.”
2. Get a retainer up front.
3. I repeat, get a retainer up front! I cannot overstate this enough. Unless you are practising personal injury or another area where you are acting on contingency (and never do contingency unless the defendant is an insurance company, municipality, or large well known corporation), get some money up front.
We have all had clients tell us they will pay us when their next deal closes or when they get some money. But that doesn’t satisfy your bank or your landlord or your employees, who need to get paid today.
And when the work is urgent, think of it this way: If they can’t find the money today when they desperately need you, what incentive do they have to find the money when the work is done and you have solved (or failed to solve) their urgent dilemma? People who ask for the indulgence of paying at some indeterminate time in the future always tell a long story about all their financial troubles. So, ask yourself: “What will be different three months from now?”
4. Don’t try to bat out of your league. Be who you are. As a young lawyer, there is no need to have a fancy office or expensive car to impress your clients.
I have had clients pay me significant amounts of money as a retainer after meeting me in a coffee shop or at my house while I was in shorts and T-shirt. A friend of mine, who has practised for more than 40 years and sees clients in Roots sweatpants and a T-shirt, is fond of saying “they’re paying me for what’s in my head, not what’s on my body.”
Clients in need want to know that you are competent and that you care. Beyond that, the trappings are for other lawyers, your social circle or your ego, not the clients. If you are starting your own practice, start small, do everything yourself and live modestly. If you want a fancy address, rent an office in an established law chambers. You’ll get the nicer stuff in due time, when you can really afford it.
5. Report and bill frequently, so that your retainers are always replenished. Nothing worse than having a judge refuse to let you get off the record and now you’re stuck doing a week-long trial you’ll never get paid for because you waited too long to deal with the retainer.
I now impart these lessons to all the law students I teach and young lawyers I mentor. My only hope is that they listen to my wisdom better than I did to that of my mentors when they imparted all of the above to me, instead of taking the first two-thirds of my career until I figured it out.
Darryl Singer is a Toronto area litigation lawyer who never dresses up to meet clients.
This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca), part of LexisNexis Canada Inc.