Oregon State Bar Bulletin — JUNE 2003
| Going Small |
By Cliff Collins
Jonah H. Paisner suddenly is solo again. Three years after passing the bar in 2000, Paisner, a criminal defense attorney, saw state budget reductions cut his consortium’s contract by about half. "Pretty much every county has had to lay off public defenders and prosecutors," says Paisner, who now rents a shared office in Lake Oswego. "It was pretty distressing to have the rug pulled out from under me."
Solo, yes, but Paisner is far from alone. Sole practices and small firms are finding their ranks increasing as the economy diminishes employment opportunities. By the end of April, almost 4,000 of the Oregon State Bar’s active membership of 11,822 practiced in firms of five or fewer members, according to Margaret Robinson, staff liaison for the OSB’s Sole & Small Firm Practitioners Section. More than half of those firms — 2,439 — are sole practitioners’ offices.
Five-and-under firms face challenges that lawyers in larger firms don’t have to think about. Paisner and seven other Oregon attorneys shared their viewpoints on what small practice is like, and how and why they ended up there.
During his third year of law school, Paisner got his first exposure to courts and criminal law, through the public defenders office in Multnomah County and also by clerking for criminal defense lawyers. He started his practice by carrying a cell phone and a handheld computer, arranging to use a lawyer’s office conference room when he met clients. Paisner also made a few court appearances for the attorney and got some referrals.
In his second year of practice he worked for a 12-member firm handling public defender caseloads. He got to know quite a few lawyers and acquired a couple of mentors. "If it’s something I’m not sure of, I ask," says Paisner. "I’ve always been the kind of person who is not afraid to ask questions."
He thinks being an extrovert is an asset for sole practice. "Every person I meet is a possible friend, possible client and referral to all the people I know," he says. "I think solos are either a lot like me — outgoing and willing to ask for help — or they worked in an organization for a long time, 15 or 20 years in a firm, and really know what they’re doing in this specific area. They get tons of referrals and live where they want."
Paisner’s survival strategy is to carve a niche market. Growing up, he lived with his family in rural Japan for about six years. He speaks fluent Japanese, so he has targeted a Portland-area Japanese newspaper for his monthly advertisements, emphasizing criminal defense and personal injury, adding, in small letters, "I speak Japanese."
Paisner also bought a couple of Yellow Pages ads and sends out letters to "affinity groups," as he puts it. For example, he mailed personal letters to all the other advertisers in the Japanese paper, enclosing his business card. He sent a letter to each poster of business cards on a bulletin board in his yoga studio, and has exchanged referrals, as a result, with a massage therapist. Lastly, every other month he is contributing a law column to the Japanese paper.
"These kinds of connections, as far as money, don’t cost much, just time," Paisner says. "My vision is, five to 10 years from now, if someone who speaks Japanese in the Portland area" needs a lawyer, "I want them or someone to say, ‘That guy in the paper.’ "
Paisner also has received referrals from the other lawyers who share his office space, and he is not worried. "It’s pretty interesting out there; you really have to hustle. Luckily, I have a lot more experience now, so it’s not as frightful or as dangerous" being in a sole practice. "I always want to be small — either solo or, at most, one or two lawyers."
Donna G. Goldian began doing contract work as a certified paralegal in the Bay Area. Then, after finishing law school in Salem in 1995, she continued working as an independent contractor for other lawyers. "Overhead is a problem for people right out of law school," she says. Unlike practicing solo, contracting "is a way to guarantee accounts receivable, in order to make it."
Her overhead was low: She still had the computer she used in law school, and an extra bedroom became her office. "Everything else I had was at the library. I had no secretary or rent. I could really keep my costs down. I think it is a way to kind of break in gradually. ... I tended not to do every piece of work I was offered. I was a single parent; I wanted some control over my life, unlike friends (who worked in firms) did not have."
Goldian, who this January entered into a two-person partnership with Paul R. J. Connolly in the Salem firm Connolly & Goldian, remains an advocate of contracting. But she cautions that that path is not for everyone: "I think the same kind of people who do sole work (do) contract work. Some people are not well-suited to setting up a practice" on their own. Likely to thrive is "a person who is self-directed and motivated, who doesn’t (require) someone looking over their shoulder to comply with deadlines.
"If you’re a member of a firm and working on somebody’s else’s file, all the time your bonus is based on your ability to do billed hours. It depends on your ability to perform for someone else. With sole, you don’t have that. With contract work, you have to be able to set your own deadlines." Instead of billing "a massive number of hours," one has to be efficient or he or she will not make it in contracting, Goldian says.
For her, contracting consisted, for example, of coming in to do research and write a brief for a lawyer who had an appellate case. Mostly she worked on some substantial project related to a large case. Sole and small firms often need contract help, because "it is hard to block out time" needed for large cases, she says. Most of her work was related to business litigation. "Not everybody likes to write; I like to write," Goldian says. "I also made court appearances if the attorney was not available."
Goldian got work through referral and being on Willamette University College of Law’s list of lawyers available for contract work. She also handed her business card to former classmates. Once she started getting work, "I did not have a difficult time," she says. Sometimes, even opposing counsel asked to contract with her. She did contract work for Connolly for over two years, then joined him this year after his previous partner entered the Legislature.
"With a partnership, you still have the ability to offset your strengths and weaknesses," she says. "I’m perfectly comfortable doing semi-academic research and writing in my office. In contrast, my partner likes marketing and brings in more work than he can handle."
Goldian’s final advice on contracting: Study and read about it before jumping in, always get agreements in writing "even if you’re working for another contractor," and learn and comply with Oregon’s independent contractor statutes.
David L. Carlson works with Pierson, LaMont, Carlson & Gregg of Salem, comprised of four partners. Each specializes: Carlson handles estate planning and probate, civil litigation and some family law. The other three respectively specialize in: family law only; business litigation; and small-business work and planning.
"It started to evolve that way anyway," Carlson explains. They decided to formalize the arrangement because of increasing complexity of cases, rather than "trying to be all things to all people," he says. "It allows us to focus on individual areas of expertise and stop worrying about areas we didn’t enjoy. By referring over to other partners, we focus on providing better service to our clients and can be Johnny on the spot."
Carlson knew when he started out that he wanted to stay small, but he is aware that many other lawyers went into sole practice involuntarily. "I practiced solo three or four months and then merged my practice into a firm with the people I was sharing an office with," he says. "We all knew each other and had gone to law school together.
"I have always wanted to have my own business. I wanted to practice and not be beholden to somebody else. When I got out of law school in 1994, the economy stunk, like now. As a result, more people were inclined to hang out a shingle. During the ’90s that changed. Possibly people are going to go back to that (now)."
The present economy has been a mixed bag for his firm. Clients still need legal services, but "they’re putting off things until they become a crisis. That’s good for us but not for the client." Business "is not going as fast as we’d like," but the up side is that conditions force the firm to focus "on who our clients are and how we’re (managing) their cases. It encourages us to be a little more active in how we’re dealing with clients and our business side.
"Out of law school, I didn’t know diddly about running a business," Carlson admits. "A lot of things you’re totally unprepared for." Not taught are such practical matters as trying to make payroll, hiring personnel, setting up a phone service and computer server, obtaining insurance and making collections and billings. "In a small firm, whether a client pays you is No. 2 after serving the client’s needs."
The partners’ solution was to designate one person as managing shareholder and have an office person who reports to him and who hires employees and makes sure bills are paid. That "in turn has freed us up to worry about client matters and keeping computers up to date. It’s been beneficial and given us more breathing room."
Another who consciously chose to be in a small practice is Philip R. Anderson of Eck, Elliott & Anderson of Bend. He finished law school in 1995 and clerked for a federal judge. Anderson worked in a 15- to 20-member firm for two years, then went on his own for two years, and now is part of a three-partner firm. "I wasn’t that happy in the job with the law firm," he says. "I didn’t have the flexibility or ability to just act unilaterally. I’m the kind of person who likes to make my own decisions, not ‘committee’ everything."
Right after he left the firm, he went in with one other lawyer and "it did not work out," Anderson says. Beginning this year, he joined two others in his current firm, and that has worked well, largely because "it’s a good fit personality-wise. Whenever you have a small firm, so much is dependent on the fit of the personalities." He says if you have 50 members, inevitably a few people will not get along, but it is not as significant an issue. "If it’s a small number, you must get along," he says.
Anderson specializes in business and employment law, with his partners all doing business law plus some land use, real estate and personal injury. For marketing, "we’ve tried a lot of different things," including television and Yellow Pages advertisements, but they’ve found that word of mouth works best. "I don’t really make it a point to network per se," he says. "I’m a really social guy; I do good work for my clients. I’m less shy about saying, ‘I’m a lawyer,’ and less shy about asking people for a referral."
Anderson has found that when working on his own or in a small setting, the business part of his practice "wasn’t very hard." He attributes that to having good computer skills and purchasing appropriate software. He uses legal software, accounting systems and office-management programs. "Spend money on good legal software: accounting, legal management, word processing," he advises.
As he has moved into working with others, the need for computer networks makes things a little more complicated and time-consuming. That situation is "one of those ironies," he feels. "As your business grows, clients expect fancier letterhead or a fancier foyer. It becomes more complicated. You have to hire employees to do it for you."
The economy has not had a negative effect on his practice. "The local economy is the relevant economy. There’s been no letup or downturn in the Bend economy," he says. "The national and local economy have not affected us. There is a lot of building, a lot of construction."
Anderson says he "definitely" will remain in a smaller practice and has "no visions of being in a big firm." But he is not blind to one drawback: "One of the hard things about being in your own firm is: Money affects you directly. When you’re directly tied to your monthly collections, it can be a challenge to keep focus on your clients’ needs as well as your own financial needs."
Kelly M. Doyle has been a sole practitioner in Portland for 19 years. He started by clerking for a sole practitioner. Doyle handles wills and estates, real estate work, criminal defense and some court-appointed work. He doesn’t do bankruptcy or workers’ compensation cases and refers out most personal injury cases. "I do a lot of ‘people law,’" as he describes it.
Doyle had an office downtown for 14 years but recently bought a building where he practices in the Woodstock neighborhood and in a satellite office in Hillsboro. He rents out shared office space and owns a few rental investments to supplement his law income. He is active in the neighborhood business association, which sometimes provides him referral sources.
Doyle says indigent defense is "in crisis," and he feels "an obligation to say something. ... A lot of small firms who do indigent defense are just dying. When people come to pay their attorney, we are not up there (on their priority list). I do a lot of pro bono and ‘low bono.’"
Doyle says the beauty of working in a sole practice is that you can work at your own pace: "You have to worry about your own bottom line, but not Fred and Ethel’s." Being in his own practice allows him more family time: His wife works as his paralegal, and his 14-year-old son often is in the office when he is not in school.
But Doyle says he would not rule out changing his practice setup. "If someone offered me a job in a large firm or a practice in another location, or an academic position, I would consider it. I think life is too short not to try new things, or not to do things I enjoy."
Furthermore, he has advice for attorneys thinking of entering his arena: "I don’t think anyone should get into sole practice without knowing what is involved. It can be lonely." He is a member of the Oregon Criminal Defense Lawyers Association and the OSB’s Sole & Small Firm Practitioners Section, a tactic he recommends: "You have to network. You have to get out. You have to talk to people."
Criminal defense attorney Keith G. Jordan knows all about the effect of Oregon’s state government budget reductions on his practice area. Jordan, who has practiced in Santa Clara, Calif., since 1993, started setting up a sole practice in downtown Portland in January 2003. He says the fact that fewer people are being prosecuted reduces his pool of potential cases by a lot.
"It’s tough right now because there are not as many cases to defend. Criminal cases are not being charged because of court cutbacks. The courts are not in session on Fridays." Santa Clara "is a very conservative county, and tough" in charges and the length of sentences. "I couldn’t imagine (similar cutbacks happening in Santa Clara) no matter how bad it got. That’s why in Oregon it’s so odd."
Jordan has chosen to leave the public defenders office and go into private practice, concentrating on criminal defense and immigration law. He figures he will be more "in control and make more money." Jordan says the cost of living will be less in Oregon, and his plan is to practice part time here and part time in California until he has built a practice here, then move his family to Portland by the end of this year or early next year.
He places ads in the Yellow Pages and is registered with the OSB’s lawyer referral service. He noted that Oregon’s economy is affecting his clients and potential clients. Even when he reduces his fee, many say they still can’t afford to pay. Because more people are out of work, the chances are his client is going to be unemployed, he adds.
Jordan rents a part-time office downtown from an attorney who has office suites. He tries to consolidate court appearances and attempts to limit his travel back and forth between states to two to five times a month. He advises others in his practice area who are starting out on their own not to get tied up with too much overhead.
"When I started out on my own, I spent too much money. Don’t set yourself up where you have such high business expenses" that you are under pressure. "With what I do, I’m always in court. So for me to pay for a full-time office" does not make much sense, he says
ABOUT THE AUTHOR
Cliff Collins is a Portland-area freelance writer and frequent contributor to the Bulletin.
© 2003 Cliff Collins