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Do Legal Incubators Really Work?

Dawn K Young

Do Legal Incubators Really Work?

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Legal incubators have been around for over a decade.  Fred Rooney, at that time, had a vision of creating a program that would support new lawyers interested in launching their own sustainable law practices, while at the same time expanding access to legal representation for modest-means communities.  In 2007, Rooney’s vision turned into reality when he established the first incubator at the City University of New York School of Law.  Since then, incubators have grown in number with over 60 incubators in the U.S. and across the globe.

A couple months ago, I was surfing the net and came across a 2017 Above the Law article, “Are Legal Incubators the Best Way to Start a Solo Practice?” written by Carolyn Elefant, a solo practitioner in D.C. and frequent solo and small firm practice blogger.  In the article, Elefant makes several weak arguments in support of her tagline “the much-ballyhooed concept may not help solos as much as it likes to think.”

And since incubators have a special place in my heart as director of our IIT Chicago-Kent College of Law’s Solo & Small Practice Incubator, I felt compelled to respond (and yes, I admit I’m biased).

But first, here’s the lowdown on what I like about these types of programs:

What Do Incubators Offer?

Incubators provide training and educational programs for lawyers seeking to establish their own firms.

 Although incubators vary in structure and design (most are sponsored by law schools, or are collaborative efforts by bar associations, foundations, legal aid, law firms, and other non-profits), virtually all provide training and educational programs.  Participants may learn about practice management covering basic business issues such as bookkeeping, accounting, and taxes.  They may learn how to brand their firm or how to develop a marketing and business development strategy. They may also receive subject-based training in various practice areas such as immigration, family law, and real estate. 

For example, in Chicago-Kent’s incubator, participants learn how to represent a purchaser or seller in an Illinois real estate transaction, including negotiating a contract and preparing for closing.  Mentoring is a big component of most incubators—providing participants with additional experiential learning via guidance and direction from experienced practitioners.

Incubators help fledging lawyers reduce their overhead. 

Starting a law firm can be difficult especially in the early stages when lawyers are faced with start-up and other necessary costs in running a law practice, not to mention the added challenge of building a client base.  So, incubators do what they can to reduce their participants’ overhead. 

Chicago-Kent in collaboration with Amata, an office solutions company, provides furnished office space in several downtown Chicago locations for its participants at no cost.  Similarly, Loyola University College of Law-New Orleans’ incubator offers free space, housing their participants in the law school’s clinic.  Incubators also provide their participants with free or discounted resources (such as practice management software, online legal research services, and CLE programming) through various legal services vendors.  This provides incubator lawyers with the opportunity to test-drive products to streamline and create efficiencies in their practices.

Incubators advance social responsibility by providing lawyers with opportunities to serve low- and moderate-income populations.  

Over the years, incubators have worked towards expanding access to justice to low- and moderate-income populations.  Strong relationships with legal aid organizations, the private bar, and other non-profits provide participants with opportunities to learn and develop necessary skills while providing legal assistance to our community’s most underserved populations. 

According to the ABA’s 2016 Comprehensive Survey of Lawyer Incubators report, the majority of incubator programs surveyed (69%) require participants to engage in some type of pro bono service.  This could take a variety of forms.  Some programs require participants to spend a certain number of hours (e.g., 20 hours per week for the first 6 months of an 18-month program) on pro bono work.  Other programs may require that participants dedicate a percentage (such as 25%) of their billable hours to pro bono service. 

And then there are other programs that require as little as one pro bono case a year, or no requirement at all, but with opportunities to volunteer at access to justice organizations.

Whatever the configuration, incubator programs encourage new attorneys to get involved with their community—really involved—so that they learn from experienced practitioners, build a network of mentors and, most importantly, provide legal help for individuals and families in need. 

Incubators provide a safe place of camaraderie, community, and innovation among lawyers. 

In recent years, incubators have also become a creative hub of innovation—where participants can share novel ideas on building better, cost-effective ways to deliver legal services.  As more firms are moving away from the billable hour, incubator lawyers are dabbling in flexible pricing options, such as flat fees, contingency fees, fee-shifting, subscription fees, and prepaid legal services. 

Chicago Bar Foundation’s incubator, the Justice Entrepreneurs Project, offers a “pricing toolkit” and “limited scope toolkit” that provides rules, forms, sample engagement letters, checklists, and a fee arrangement matrix to help participants provide more transparency and affordable pricing for their clients. Incubators also help participants figure out how to use technology to increase efficiency and decrease their clients’ bottom line.  From automating routine, time-consuming tasks to incorporating cloud-based products in their firms to increase accessibility, incubator lawyers are experimenting with ways to benefit their clients and their practices.  

They are also taking advantage of the connections their sponsors have with the legal tech community—infusing innovation and technology into their own firms.  After some market research, Nick Bartzen, a condo/HOA lawyer and Chicago-Kent incubator graduate, discovered that of the 18,000+ Illinois condo and homeowners associations, only a small percentage have the budget for legal assistance, despite the fact that most associations have similar legal needs (e.g., navigating corporate governance requirements, collections, financing projects, etc.). 

So, Nick decided to act.  He was on a mission to come up with a way to deliver legal services differently.  Nick obtained advice and guidance from his incubator mentor Scott Weisman, an attorney turned tech-guru/CEO of LaunchPad Lab (a software company that develops mobile and web apps). Through the incubator, Nick developed relationships with faculty and others from Chicago-Kent’s Law Lab (an interdisciplinary teaching and research center dedicated to legal innovation and technology) and its Center for Access to Justice & Technology (a center that conducts research and supports projects on access to justice and technology). 

As a result, Nick developed a self-help legal guidance tool called DecSpeak for those falling within that gap–associations that need legal help but can’t afford large firm prices–providing them with self-help style guided interviews that produce regularly used documents and immediate answers to their FAQs based on Illinois law.

Nick’s next project? Providing a subscription-based offering to associations that want more in-depth, customized legal assistance through an app that incorporates the association’s own governing documents (bylaws, rules, regulations).  Associations would pay a monthly subscription and, in return, they would have the ability to speak with an attorney through the app and obtain answers to hundreds of their board’s questions for a fraction of the cost of a traditional monthly retainer.

So, What’s Not to Like?

According to Elefant, she has three reservations about the efficacy of these types of programs.

First, can an incubator that couldn’t figure out how to pay for office space when it lost its free digs teach students how to run a profit-making practice?

That incubator Elefant referred to was Florida International University College of Law’s two-year LawBridge program, which provided free space in a downtown Miami office building, educational training, opportunities to engage in pro bono community projects, and targeted guidance from the program’s director—an experienced attorney. 

Unfortunately, the law firm that was donating the extra space to the program was moving to another floor in the building, and thus no longer had the extra room.  And this left the participants without any office space. 

I agree that this must have been a disappointment, and perhaps something could have been worked out (whether it meant outreach to alumni or other funding sources), but all of that takes time and extensive planning.  From what I gather, it appears that this was an unexpected event and that, despite having to scramble to find space, the participants still obtained a great deal of value from the program. 

After finding space on her own, Mirene Mairena, one of the displaced LawBridge participants, said this: “I felt established enough through LawBridge to do this…[and] I’m not going to work for anyone else ever again.” Another LawBridge participant, Sam Gonas, sung the program’s praises: “The program has been quite instrumental in providing the fundamentals for me to go solo.  I wouldn't have done this without the program. I wouldn't have known how to start. I probably would have gotten in a pickle.”

Also, most incubators are sponsored by law schools, bar associations, and other organizations that may have been in a position to provide no-cost office space simply because they just had the extra space in their building.  Some programs can offer free or highly subsidized space because they have cultivated strong relationships with donors and large law firms, or because they’ve received grant funds. 

Moreover, this was one incubator program Elefant mentioned. As mentioned before, today there are over 60 incubators in the U.S. and globally that have been sustainable and are currently operational.  The last I checked, Florida International University College of Law now has an incubator up and running through their FIU LAW Practice—the law school’s new low bono initiative.

Second, can lawyers starting out in incubators learn how to make the kinds of tough business decisions that work-a-day solos have to make every day?

She argues that an incubator lawyer with subsidized office rent can afford to take on clients who are pay risks—whereas a solo supporting a family cannot.  She goes on to say that an incubator lawyer can justify the 25 hours spent drafting a motion for a protective order for a domestic abuse client with the thought that the work is for a good cause, whereas a lawyer running a real practice would go out of business. 

A couple of thoughts on that.  Incubator lawyers take on all types of clients, risky and non-risky clients, ones that can’t afford to pay or have no problem paying at all.  And even though most incubators encourage their participants to engage in work “for a good cause,” what Elefant is forgetting is that these lawyers still have to eat and pay the bills.  Incubator lawyers have families to support too.  Incubator lawyers are frequently taking in everything they can to effectively represent their clients—learning the substantive law, but also the business side of running a firm.  Many of these lawyers join incubators because they want to learn and help their communities—even if this means putting in pro bono hours with an incubator partner legal aid organization or representing a low-income client.  They’re learning to make tough business decisions every single day. 

Third, are incubators successful in training lawyers to succeed in solo practice while still serving underserved populations?

Elefant says she has not found any information on what happens to lawyers after they leave the nest, and that her guess is that only a few stay in solo practice. 

In 2007, serving underserved populations was indeed a goal of the first legal incubator, but incubator programs have evolved over the years.  It has been a bit of an organic process with the nature, structure, and design of incubator programs varying considerably from one program to another.  One common theme that I’ve seen among incubators is that many of these lawyers are working hard to provide more transparency and affordability in their pricing—reaching low-income populations, but also those individuals from moderate-income populations that may make too little to afford traditionally priced firms, but too much to qualify for legal aid. 

And while her point about not being able to find a ton of data on whether incubator graduates are continuing their solo practices is well taken, strides have been made among incubator programs nationwide in recent years to collaborate, share ideas, and gather more information.  The ABA has been a strong supporter of the incubator community—providing a host of resources, such as a directory of incubators with program profiles and information on incubator demographic statistics.

Three years ago, the ABA and the Incubator Consortium conducted a survey of legal incubators to collect and share data about incubator programs and their participants. According to their 2016 report, 25 programs were able to provide detailed information about the practice settings of their incubator graduates.  Among the 196 graduates for which data was provided 70.4% went into solo or small firm practice after leaving the incubator. 

This year, in efforts to collect even more data to substantiate the positive impact that participation has had and continues to have on participants and the clients they serve, a collaboration involving the ABA, Professor Luz Herrera, and Texas A&M University School of Law is currently studying the effectiveness of incubator programs on a national level.  Thus, there is more to come on the data front. 

In Sum

Legal incubators provide trainings and educational programs to lawyers learning the ins and outs of launching their own practice.  They help bring participants’ overhead down by providing free or low-cost office space and other resources.  Most incubators instill a sense of social responsibility to serve the legal needs of low- and moderate-income populations by providing pro bono opportunities.  They also provide lawyers interested in legal innovation with a safe place to share creative ideas on ways they can deliver cost-effective, more transparent legal services to their clients. 

And so, in my opinion, I’m not sure there really is a downside to these types of programs.