lowbono.org

How Solos Can Gain Financial Flexibility
Paul Schorn
Texas Lawyer
August 18, 2008

Quick beats big when it comes to linebackers and law practices. One of the solo practitioner's greatest weapons is his nimbleness. Without meetings to attend or committees to persuade, a solo can react quickly to developments in a case or trends in the marketplace.

But this advantage often is wasted by solos who leave themselves without the financial resources to take advantage of new situations. As Benjamin Franklin observed, "There are three faithful friends: an old wife, an old dog -- and ready money." Here are three basic tips for solo practitioners who want to protect their financial flexibility.

Type it yourself. Every solo ought to know how to type well, at least 60 words per minute and better yet 100. I started practicing law in the age of the Dictaphone (obtained by crossing a gramophone with a brontosaurus), but I haven't had anyone type anything for me in years.

My ability to type has saved me tens of thousands of dollars in secretarial wages and just as many hours of reviewing pointless drafts of simple letters. Not a week goes by that I don't think of Mrs. Fleming, my stern, blue-haired, 10th-grade typing instructor. Lawyers who are not lucky enough to have their own Mrs. Fleming can find amazing, interactive computer programs for less than $30 that will teach them to type in a matter of weeks. They will never, never make a better investment in their practices.

Learning to type also expands the hours the solo can work to include evenings, weekends and holidays, when support staff are off leading normal, healthy lives. I love having opposing counsel tell me they absolutely refuse to produce important documents on a Friday afternoon -- and making sure a motion to compel is sitting on their fax machine when they come into work on Monday morning.

If it doesn't plug in, buy it used. The retail markup on office furniture is obscene. Refuse to pay it. According to the U.S. Small Business Administration, about one-third of new employer establishments fail in the first two years and about 56 percent in the first four years. I half-suspect that many of these folks' businesses go under because they overpaid for their conference tables, armchairs and credenzas. Find their furniture, and you'll save a bundle.

Most major cities have stores whose business it is to buy large lots of office furniture from failed operations and resell it. Their stock usually runs the gamut from shabby brown plaids to pristine Herman Miller Aeron chairs. Be prepared to sweat while you shop, as these places usually keep the overhead low by operating out of old warehouses, but the savings are worth it. A large, high-end metal file cabinet can run $900 or more new. The same cabinet, after just a couple of years and perhaps a few small scratches, can be picked up at one of these resale shops for about a third of that. The same goes for desks, chairs, tables, lamps and virtually anything else your office might need.

As an alternative, consider antique furniture. Even good-quality antiques are usually cheaper than the furniture made specifically for businesses. A plain, medium-size conference table can cost $2,500 new, while a little hunting might turn up, say, an 8-foot oak table with barley-twist legs for a quarter of that price. And antiques generally are more than adequate for the light duty they receive in a solo's office.

Keep the money moving. Money is to a law office what blood is to a body: You've got to have enough, and it has to keep moving, or you die.

I fought the idea of a line of credit for a long time. If I liked being beholden to others, I'd have stayed at a firm and never become a solo. But that changed as my caseload grew in volume and value. A small case in my field might require $500 in expenses and take three months to resolve, while a large case can gobble up $25,000 and drag on for two or three years. Carrying 20 or so cases at a time, those numbers can add up. Eventually, I had to accept some occasional debt so as not to be strapped for cash and unable to fly off to Tulsa, Okla., or Topeka, Kan., on short notice for that crucial deposition or to take a good case to trial because of the state of my operating account. Sometimes my line is fairly burdened, sometimes it's paid off, but it's always there. That allows me to do what I need to do, when I need to do it.

Another tool in the solo's financial arsenal is the sweep account. This is a type of bank account in which funds are automatically transferred or "swept" into an investment vehicle of some kind (such as a money market or mutual fund) each night or Friday evening and then transferred back to be available when business resumes. This process can pay real dividends over time, especially when a few highly productive months swell a solo's operating account with large amounts of money she doesn't need right now -- but will eventually.

Taking advantage of opportunities for saving money and putting some basic financial know-how into play can put solos in the best possible position to respond quickly to opportunities. And that's just good business.

Paul Schorn is a solo practitioner with offices in Lockhart and Austin, Texas.