Chapter 24 - Popular and Misinformed Critiques
Because of some comments and reviews of this book, this chapter was added to address some of the more egregiously erroneous critiques. Here goes….
"This book doesn't acknowledge reality. In the real world, clients don't have money. Clients aren't out there beating your door down to pay you $200 an hour."
The critics who say this missed some of the most salient points. First, a goal of making $100k+ a year for two hours a day of billing is FAR from having to beat rich clients off with a stick. We are talking about two hours a day - not ten hours a day. Big difference. Second, if anything, this book in fact tells the reader - point blank - the world is filled with people who cannot afford you. That is the whole point. Find the ones who can, and bear in mind, you only need enough of them to support billing two hours per day on average.
"People that can afford a lawyer go to a law firm. Sorry to burst the bubble."
False. Very false. There are many people who can afford lawyers. The reason these people can afford lawyers is because they watch their money carefully. Many of these people are scared to go to law firms for fear they will be raped, pillaged and plundered. They are quite happy to think they are not being bent over by the type of solo you are being taught to be - provided they believe that this solo is competent. I rounded up some good business clients and individuals and built up to around $100k or so a year before I decided I wanted to stroke my ego with an office. As a matter of fact, my first office at that point was a deal I cut with a business client who had a nice building. I got free rent, plus a fixed monthly amount of money, as part of a retainer to do the company's legal work. Still, it came with no money out of pocket.
"Yeah, right. The book totally misses the fact that there are just some practices out there where you can't operate without legal secretaries out of your home like some schmuck."
This book never attempted to claim this is not true. Of course, there are various types of practices where this is not going to work. It was never suggested that you can be a major litigator for a half dozen Fortune 500 clients by drafting briefs as you sit at home in your briefs.
I assumed that the reader who is interested in this book decided to read it because the reader has big debt, few to no good-paying clients and very limited resources. If you are making more than $100k (for yourself - NET before income tax), go ahead and find an office if you want. You have cleared a hump, and you have more flexibility. This book is not for you. In that case, I would suggest the book, The Millionaire Next Door, for teaching you how your typical millionaire is a first-generation millionaire, who is self-employed and practiced living well below his means over the course of his lifetime.
On the other hand, if you have your office, your secretary and all that overhead, and you are making under $100,000, sorry…. you are a schmuck. In that case, definitely go read The Millionaire Next Door. I would not take on a business plan that makes me find $130,000 in billable hours to take home $85,000 gross before taxes. That would mean I just gave away $45,000 of my income to pay someone else. $45,000 is a lot of money. Clients are precious and few enough. You are much more secure with a plan for building up to two hours a day than you are with a plan that calls for three or four hours per day - or even two and one-half hours. As I said, if you get up to the $100k range, then you can think about offices or whatever it is that will make you feel you "look" like a lawyer.
The only thing I can tell a newbie is, "The world is flooded with these types." I covered them extensively in Chapter 18. It bears re-reading if the message is not clear.
It is hard enough to find sufficient good-paying clients to even collect a steady $400 a day (two hours), and all these attorneys who are schlepping away for crappy clients to pay overhead before they pay themselves are proof as to how precious a good client is. The funny part is they almost all admit it is just to keep up some appearance. I do not hear them say they are billing and collecting even as much as four hours a day (that would be a gross of $200,000 or more). So, why will they not do their own paperwork, answer their own phones and lick their own envelopes? They cannot be that busy. We are talking about only two hours a day. This fluff overhead is all for looks.
"The book mentions all these practice areas, but it doesn't tell you how to become versed enough in them to build them up."
People who claim this are probably not able to get over the cold, hard truth. Nobody is going to hand this knowledge to you. Probably 40% of this book is drilling into your head the importance of research. It tells you what to research. You learn by research.
"I do take some exception in that you make it sound like you can have a great practice on a home office and no staff, and that may be so if you keep things simple and no more cases than you can personally manage, but working in a solo practice, the whole reason my job (admin assistant) was needed was that if the boss did everything himself, he'd have damn little time for handling cases."
Just how much administrative work is involved to handle a two hour/day practice? How many checks are you going to be writing and receiving and in what volume? How could you possibly not have enough time to keep up with your own administration? You would be lucky to deal with more than one or two bookkeeping entries a day. Of course, you have to track your own billing time. No administrator can do that for you. They can transcribe some dictation. But if you can use a computer and type, do you really need transcription services?
"... the first money in the month goes to expenses - so you're essentially getting a hundred cents on the dollar, while after you've made your nut, you are moving into your tax and paying 16.3% social security bracket. In other words, when business is slow, you're losing money, it's ok to take a case for less when you really need the money instead of seeing it go to someone else after you've spent some time on the phone just setting the next lawyer up to be the better deal. Your competitors in the law will lower their fees in slow times, and you will still need to make your expenses. I'm all for work 2 hours at $200 daily, but sometimes it gets down to will you do an uncontested divorce for $500 when nothing else is happening."
There are compound issues raised here. The first one is about not taking in enough money to pay your overhead. As stated in the critique above, then, "… you're losing money." Unbelievable that a lawyer would work some amount during the month and actually lose money. How much did you have to bring in before breaking even? $3,500? $5,500? More? Think about how much money that went to everyone else but you. This completely reinforces my points.
The second point was about taking cases for less because you really need the money. Well, yeah. Look at what you did. You need money to pay everyone but you. So, what about this situation even if we do not have excess overhead? Why not just take the $500 divorce because you are not doing anything else? Because you are setting precedent with this client. You do not think he tells people he refers what you charged him?
Word of mouth is your #1 referral source, and this is not because you choose to make it that way. It just is, and you have no choice over that. You are pigeon-holing yourself. You will become known as "the lawyer who'll take your case for $500." And if you tell the next guy, "Well, that was then; I don't need the money so bad right now. Today, my fee is $1,500," you still have a problem. This new client knows you represented someone else for $500. Now, you want $1,500. He feels you are trying to rip him off. He is going to shop around. Do you see how you pigeon-hole yourself into these traps where there is no ultimate escape? Again, if it is not clear enough, read Chapter 18 again.
One of my law partners and I used to sit and laugh all the time about how these multitudes of attorneys simply refuse to believe in themselves - especially when it comes to getting retainers. My partner's favorite story is about an attorney in the same practice area as him who was his chief competition in the area. He knew him well, and they got along fine and talked all the time. His competitor would ask him, "So, what's a typical retainer that you are getting for divorces?" My partner told him $5,000 (he gets more than that on more head-ache type cases and will even refuse to accept $10,000 on some). His competitor just flat-out refused to believe him - laughed openly back and said, "I don't believe that. People don't have that kind of money." My partner just said, "Oh, well. It's up to you. Believe whatever."
What else could my partner say? We have this discussion with each other all the time. Why? Because it disappoints us there are so many attorneys out there who lack the guts to demand a good fee. This only harms us all. It would be nice to engage in a little price-fixing, but since that is illegal, at least we would hope other attorneys will listen and get their rates and retainers up where they belong.
We are amazed at how attorneys are so afraid to get good retainers. We are not rich and do not want clients to get away, either. Trust me. But I would rather have one $5,000 case than ten $500 cases. So, you "takes your chances," and 1 out of 10 times, you will get the $5,000 retainer. That way, you are not overloaded working on ten $500 cases.
It is regular practice to get these $5,000 cases and to even have the same client on the same case bring additional chunks here and there for another $3,000, $2,000, $3,000, $2,500, and so on…. It is not atypical to earn $15,000+ on a custody dispute case. But, in so many of those family cases, no matter how much you get, you will work substantially more than what you get paid (thus, my lack of affinity for family law - I rarely do it). I made $165k a few years back (before the above-referenced partner and I joined up). He told me, "You must have worked your tail off." I said I spent probably 4 - 5 hours of an 8-hour day just doing nothing. He appreciated then, what civil practice had to offer, but he will never bother to learn it. He has found his comfort zone, makes decent money and accepts all the pimples that come with it. At least, unlike so many others among the hoards, my partner did not say, "No way! You couldn't possibly make $165k working half-time!" He at least gets it.
The next critique is not really a critique. It is more disbelief. Some just cannot believe a substantial part of billing on a case is billing for research. "Clients aren't going to pay you to research."
In fact, much of what I do involves research, and you can bet I bill for it. The Appendix at the end will show you a real-life set of 3 bills on a short-lived case (you will see how to bill). Following that, you get to see a real-life Response to a Motion for Judgment Nunc Pro Tunc. You will see how all that research pays off.
The next statement is a very sincere one, and I will not bash it like the others. It goes like this: "I like this read a lot, but I am still doubtful about the 'research your way to competency' approach. The author himself had a tremendous resource in his Mentor, Craig. And unfortunately, those positive mentors are extremely few and far between for today's new graduate."
This young attorney is right. I would not trade my Craig for 100 books like mine. You know why? Because Craig MADE me accept the message. It was that, or else.... With my book, many people are not going to take it to heart. I cannot ram the advice down anyone's throat like Craig did for me. If you will not follow my advice, I cannot fire you and put the fear of God into you.
The rest really is true.... Craig's purpose was primarily two-fold: to get me to research my way into competence and to "grow a pair." You really do not need a mentor to tell you this. Deep down, you know it. Those who really think they must have mentors are no different than old, fat people who will not lift a barbell without some young, fit instructor yelling at them to "lift!" If the instructor is not coming, they are going to skip the work-out and stay fat and out-of- shape. Do they really need someone to tell them to do what they already know they need to do?
Did you know that Texas has a Health Spa Bond Act? WTF???? How do I know this? I never had a case involving a health spa in my life. As a young lawyer, when I had nothing to do, I would just pop open the statutes and start with the Property Code, or the Civil Practice & Remedies Code. I would just read down the list of topics covered. If I thought a subject was of interest and might be useful down the road, I read it. So, that is how I know there is Health Spa Act (but I never read it). If I ever get a health spa case (which I will not), I know at least that the act is there. I spent lots of time doing this. I have probably had cases which had subjects in just about every volume in the Vernon's Texas Statutes as a result. There is something to take away from every volume.
© 2015, Jeff M