Carolyn Elefant of My Shingle.com and The Law Firm of Carolyn Elefant discusses the many ways solos and small firms can build their arsenal and business fast on today's GAL Radio.
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Damien Allen: Good morning and welcome to GAL Radio. My name is Damien Allen, and joining me today on the phone is Caroline Elefant of the Law Offices of Carolyn Elefant in Washington, DC, and the proprietor of MyShingle.com. Good morning and welcome to the program, Carolyn.
Carolyn Elefant: Good morning, Damien, and thanks for having me on.
Damien Allen: It’s a pleasure to have you here today. Today we’re talking about how to grow small firms now in contrast bigger firms. You’ve covered the subject on your blog, MyShingle.com. What are some of the things that firms can do to grow themselves?
Carolyn Elefant: I think that particularly now in the down economy there are enormous opportunities. I know that that seems counter intuitive, except that in this economy many large firms are struggling and smaller firms are much more nimble and able to pick up the gaps. In terms of the things that smaller firms or solos can do to grow, I’d say, first of all, one thing they can do is just bring on other attorneys on a part-time basis or outsource work in the short term. That can free up a solo to engage in more marketing and bring in more clients. That’s I think one of the easiest and most flexible ways to grow a practice is through outsourcing or through bringing on younger attorneys and not having to go through all of the hassle that’s involved in bringing on a full-time employee, as well as the risk of not necessarily having work for them down the road.
Damien Allen: Now in today’s economy and also with the advent of the internet and new forms of technology, are the new business models coming up in small law firms and solos that allow them to do these things easier?
Carolyn Elefant: Yes. One thing that I think is very bullish right now, to use a stock market expression, is the idea of solos entering into virtual affiliations with other practitioners, either in their community or in other parts of the country. It can happen in a number of different ways. For example, you might have a bankruptcy practitioner in the middle of the country who might enter into an affiliation with somebody in California and somebody in New York. They could engage in joint marketing, and they wouldn’t necessarily face competition since their clients are in different locations. I think another opportunity, another terrific opportunity for a traditional brick and mortar firm, is to affiliate with a completely virtual firm. You could market to the virtual unbundled services population, and you could also continue to serve your clients in your bricks and mortar office. I think a final way or a final suggestion for a new business model is for, and this is something applicable to people right out of law school, is to identify some of these hot new areas where lawyers and new ideas are really in demand, issues relating to cloud computing to green energy, new emerging issues like that, and just start a niche practice that’s really focused on it. Gain a small client base and then either outsource or service of counsel to a larger practice and perhaps even down the road negotiate an acquisition of, have the larger firm actually buy you out. I think that those are just some suggestions. There are so many different varieties, and I think that as long as lawyers think creatively instead of just thinking in the traditional partnership/associate leverage model, these ideas will just be very apparent to them very quickly.
Damien Allen: Now in your blog at MyShingle.com, you’ve spoken about some of the new business models and you’ve spoken about outsourcing, but you’ve also mentioned licensing. What is licensing about, and how’s a solo or small practice go about that?
Carolyn Elefant: Well, the idea of licensing came from you, and I read an article on growing regular businesses. What it talked about was how some computer companies or biotech companies can’t necessarily attract enough venture capital, and so what they’re doing to get money in the short term is licensing some of their products to larger companies, and that creates a stream of revenue. The way it would work in a law firm model, at least the way that I’ve thought of it, is in some ways almost like an of counsel arrangement. A law firm would develop some type of expertise and offer it to a larger firm through a flat fee arrangement. You might say for $5,000 a month, you’ll have me on call to do x, y, z tasks relating to negotiating leases or advising on bankruptcy restructuring. I think is one way it could look. Similar to an of counsel relationship, but with a little bit more certainty for the attorney or the firm that is providing the service. I think another way that you could have licensing would be along the lines of a smaller firm might develop a very specialized product. In the electric utility industry, compliance is a very big issue. There are a number of firms that have developed compliance products to help clients follow the various regulations that apply to them. A smaller firm might develop a compliance product and then license it to several different larger firms, who might then repackage it and sell it to their clients. Those are the two thoughts that I had on how a licensing model from the business world might apply to law firms.
Damien Allen: Now with the smaller firms and solos, is there more of a shift from the billable hours model to a flat fee or an alternative fee?
Carolyn Elefant: Well, I’m not so sure that that is actually a shift. For the past five to seven years, it seemed to me that most of my solo and small firm colleagues have offered some type of alternative billing arrangement, whether it’s a flat fee agreement or some type of hybrid with a lower hourly rate up front and a success fee triggered based on results. In terms of solos and smaller firms, at least, from my perspective, it seems as if they’ve been doing that already. Having said that, I have noticed literally in the past six to eight months, inquiries have been coming in to my own firm from clients who are saying, “I don’t care what it costs. Just make it a flat fee. I can’t have the uncertainty.” So there is a huge client demand for flat fees, and solos and small firms, because their nimble and they’re flexible and they have lower overhead, are able to accommodate those requests.
Damien Allen: Other than the things we’ve currently discussed, are there other things that solos and small firms can do to increase their arsenal?
Carolyn Elefant: I think that one of the things that’s most important is to just, this is a time when many solos and small firms, again, some would counter intuitively, are finding themselves very busy because matters are coming in from larger firms. I think that as you get busy, it’s still important to keep your eye on the long term. I think that, because we’re going through a lot of technological changes, and also a lot of political changes more focused on green economy, more focused on consumer protection and privacy issues, more focused on social media, we’re going to encounter a whole range of novel legal issues over the next five to ten years. I think that solos and small firms really have to keep their eye on that ball and find ways to keep themselves ahead of that curve, keep themselves educated and learning about those issues and what they can do to facilitate transactions in those areas so that they can continue to grow steadily. I think it’s a matter of not getting caught up in all the work that they have to do, and if they get very busy now, to outsource it and bring on the help that they need. They can keep ahead of the game. That’s the way I think that solos and small firms can continue to grow moving forward.
Damien Allen: As technology has become such a huge boom to the industry, what pieces of technology do you see are most helpful to a smaller firm or to a solo as opposed to the bigger firms?
Carolyn Elefant: Well, I’m not sure if these technologies are easier or more amenable to a small firm practice, but I think that, first of all, a lot of the cloud based softwares, anything from practice management tools like Rocket Matter or Clio to collaborative tools like BaseCamp, there’s so many of them, they come out so frequently. I always test them all, so I can’t keep track of them, but anything that operates in a cloud that’s collaborative and facilitates communication and coordination between solo and small firms I think is very important. Any type of product, and again these tend to be cloud products that are conducive to mobility, because those can allow for a lot of flexibility. If you can access your files anywhere, then even if you’re practicing in one jurisdiction, if you have a case that comes a couple of states away or your expertise is required there and you have to travel there, again, that type of technology would enable you to go and you mostly bring your practice with you. I think another thing that’s really important for solos and small firms in terms of marketing is a lot of the webinar based platforms that are available and also the free conference calls, because what you can do to market your firm is you can offer a free half hour conference call on the latest rule from x agency or a recent decision that might affect businesses. I think it’s also very easy to do that for webinars. I’ve used free or very inexpensive platforms like DimDim, which allows me to have a webinar online. People can call up and see the slides and listen to the webinar and then I can send them a copy of the slides at the end of the presentation. I have seen some recent statistics that say that one of the most powerful client development and retention tools are the educational ones line webinars and teleconferences.
Damien Allen: Thank you for joining us to day, Carolyn, and explaining how to grow your small firm or solo practice.
Carolyn Elefant: Thank you. Thank you for having me. I really enjoy talking about these topics, and I will continue to write about them at MyShingle.com, and I hope that anybody who has any other thoughts will feel free to comment at the blog.
Damien Allen: You’ve been listening to GAL Radio. My name is Damien Allen. We’ve bee speaking with Carolyn Elefant of the Law Offices of Carolyn Elefant in Washington, DC, and MyShingle.com. You’ve been listening to GAL Radio. Thank you very much for joining us today. Everyone have a great afternoon.
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