GPSolo Magazine - July/August 2005
All Your Eggs In One Basket:
Boutique Law Practice
Is your practice area one that is able to stand alone and be financially self-sufficient? Are you interested in practicing one area of law without the politics of appeasing other, more valued groups within your firm, or having to carry less profitable ones? Do you want the opportunity to provide high-quality legal services for clients of your own choosing in an intimate environment that a large law firm cannot provide? Can your drive and ambition get you through a potential downturn in the market area upon which your firm is completely dependent? If your answer is “yes” to these questions, then perhaps you should consider setting up a boutique law firm.
First Things First
The basic requirements for establishing a boutique law firm are similar to those for setting up a general practice firm. You form a legal entity (for limited liability purposes, of course); open a business checking, IOLTA, and other trust accounts (as required); establish an office complete with a computer system that has reliable broadband Internet access; implement time-keeping and finance-tracking software; select a telecommunications system and service providers (e.g., fax, phone, voice mail); purchase malpractice insurance and stationery; hire staff (if needed); publicize your new business; and hang out your shingle.
Finding Your Focus
Of course, setting up a boutique firm requires one additional step: You need to decide which area of law will be your primary focus. Sometimes the ultimate decision may not come until after you have set up shop. Five years after she started her solo practice, Robin Page West overheard a conversation at a bar association cocktail party about qui tam lawsuits. Qui Tam is shorthand for the Latin phrase “qui tam pro domino rege quam pro seipse,” meaning “he who sues for the king as for himself.” Under the False Claims Act (31 U.S.C. Sections 3729-33) a private individual or “whistleblower” with knowledge of past or present fraud on the federal government is permitted to sue on behalf of the government to recover stiff civil penalties and triple damages. This area of law intrigued West, and a short time later an existing client happened to bring a qui tam case to her.
Today, West is a shareholder in Cohan & West, P.C. in Baltimore, Maryland, a nationally recognized firm in the representation of qui tam whistleblowers. She is the author of the book Advising the Qui Tam Whistleblower (American Bar Association, 2001) and has been honored by the White House for her representation of whistleblower Terry Fletcher in the case of U.S. ex rel. Fletcher v. MetPath, the fourth-largest qui tam recovery nationwide in 1995. “I like the variety and the challenge of uncovering fraud on the government,” says West. “I like getting to know people who have the fortitude to stand up for what they believe in.” West attributes the satisfaction with her career to choosing a practice area that makes her come alive and surrounding herself with people who inspire her.
Rafael A. Santiago, a past president of the Hispanic National Bar Association, took the advice of his clients when deciding to open a private practice in his specialty. Several of his significant clients assisted him in making the final decision to leave the large firm environment after almost 20 years. Santiago is the founder and managing member of the Santiago Law Group LLC in Hartford, Connecticut. (Previously he had practiced with Robinson & Cole LLP, the second-largest law firm in Connecticut, with more than 200 attorneys.) In his new boutique firm, Santiago says, “I have been able to provide the same level of quality service in a reduced-overhead structure for the benefit of the clients. This is very appealing to entrepreneurs.” He maintains an active legal practice in corporate, commercial, and financing transactions, including representing buyers and sellers in structuring, negotiating, financing, and documenting sophisticated business acquisition transactions. He also represents business entities on matters of governance, shareholder relations, employee matters, and general contract- ing matters.
Writing a Business Plan
Once you have figured out your focus, crafting a business plan will make it easier to set up your boutique firm and ultimately contribute to its success. A business plan can serve as your road map. You can peruse samples simply by typing “law firm business plan” into any Internet search engine; numerous links to sample business plans available for free or for purchase online will appear. You also may purchase a computer program that will craft a business plan based on your specific information. To be of any value, a business plan must be personalized and identify your particular strengths, weaknesses, and goals.
Olu Stevens did a lot of preparation before sitting down to write his business plan. He reviewed “The Written ‘Business Plan’” section of Jay Foonberg’s How to Start and Build a Law Practice (American Bar Association, 2004, fifth edition) and enrolled in a couple of courses about starting a business. Stevens says, “[t]he courses were not directed toward starting a law practice, but the business principles I learned were extremely helpful.” Stevens has a thriving civil litigation practice concentrating on family law and personal injury law and is the president-elect of the Louisville Bar Association in Kentucky.
It is vital to determine whether your business plan is realistic. If you have already handled matters in your selected practice area, you can draw upon your own experience. An experienced attorney will know where her business comes from, can identify trends in the industry, and can anticipate fluctuations in the economy that will dictate workflow. She will change and update her strategic business planning accordingly.
If you are just starting out in your specialty area, however, you will need to do some research. Vivian Hsu, managing member of the law firm of Hsu & Associates LLC in Needham, Massachusetts, suggests you talk to a lawyer with experience in the field, “someone with a similar personal style of business, and someone who will play devil’s advocate.” She also suggests you speak with other mentors outside the field: “People you trust—whose opinion you value and who have good reputations and track records—will help you know if you are thinking about the right things and have spotted all the issues when refining your business plan.” Hsu’s firm specializes in the area of employment law, providing proactive and practical counseling, as well as a customized computer program, to train human resources professionals and managers on all aspects of the employment relationship. Her firm also furnishes mediation services using alternative dispute resolution (ADR), an effective and cost-efficient tool for resolving certain employment disputes, including employee complaints. Prior to starting her own firm, Hsu served as Division Attorney and Division Counsel with Motorola, Inc., a Fortune 100 corporation.
GP|Solo Section Chair Lee S. Kolczun, who has an MBA as well as a JD, will be teaching a course to entrepreneurs this fall. Part of the course curriculum is writing a business plan. When assessing the merits of his own business plan, Kolczun had several of his friends in the banking industry comment on it. But what if you don’t have bankers as friends? To get an outside perspective on your business plan, Kolczun recommends you “[a]pply for a business loan, even if you do not intend to take out a loan. Part of the loan approval process is a review of your business plan. The larger the loan amount, the more thorough the review.” Kolczun has practiced in a solo or small firm setting for more than 30 years. Currently, his solo practice focuses on workers’ compensation, estate planning, probate, and elder law in Lorain County, Ohio. Prior to entering private practice, Kolczun was an assistant attorney general with the Workers’ Compensation Section of the Ohio Attorney General’s Office and an assistant prosecutor for the City of Lorain.
And here’s one more way to get a reality check on your business plan or hear more war stories about setting up your own specialty practice: Join the members of the GP|Solo Section at one of its upcoming events. Who knows, finding your new practice area may be just a cocktail party away.