Susan Liebel over at the Build A Solo Practice blog poses a very interesting question in her recent post titled “Is Now The Perfect Time To Start Your Solo Practice?". I agree with Susan that it is time for lawyers to start a solo practice and/or small practice groups. Solo practitioners and/or small practice groups will have a far better chance of survival in the coming months, as I previously posted here. Here’s a excerpt from Susan’s post:
The short answer: Yes. I'm totally aware of the inner hysteria most people are feeling about our economy, needing to take a Valium before they open their 401k statement this month. Watching your property taxes increase while your home value drops like an elevator with broken cables. You've either been laid off or can't get your first job. I get it. Trust me, I do.
History tells us when economic times are their shakiest, it is the perfect climate to start a new business. (No, I'm not insane :-) The following is information collected from disparate sources:
Did you know that 16 of the 30 companies which make up the Dow Jones Industrial Average were started during a recession or depression? These little companies include Disney, McDonalds, Proctor and Gamble, Alcoa, General Electric and Johnson & Johnson.
Fast forward to 1973-75 when the U.S. was captained by an unpopular president, embroiled in the infamous Watergate scandal AND at the hind end of the Vietnam War, a highly controversial and expensive war which polarized the country. Within two years gasoline prices had increased by more than 50%. Credit was very tight. And, you guessed it, consumer confidence was at historic lows. (Does this sound painfully familiar?)
And in these terrible times a few entrepreneurs you may know figured 'what the heck.' Those tumultuous early 1970's saw the beginnings of Famous Amos Cookies, Supercuts, Chili's, Cablevision, Oakley and the start of a fairly well-know company (their products you might be using as you read this) called, that's right, Microsoft. (wonder where Bill Gates is expanding to right now?)
Other notable businesses launched during recessionary times: Costco, Applebees, J. Crew, Whole Foods and Intuit.
You're asking yourself, 'how is this possible?' Don't most businesses fail? With times so tough starting a new business seems the height of insanity. Not really. It is during these times that entrepreneurs (and very smart business people) realize they have nothing to lose and everything to gain. The world is crashing down around them anyway. The very things which might have prevented those from starting a business before are no longer present - the opportunity cost is low.
Here are the outbound links from Susan’s article:
- Don't Most Small Businesses Fail?
- The Soul of the Solo - What Makes A Lawyer Entrepreneurial?
- In a Weakening Economy Will Clients Trade Big Law for Innovative Small Firms?
- Law Firms Tightening Belts -- By Request
- There is No Competition. That's Right. There is No Competition.
- Rethinking Legal Fees for Lean Times