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SmallLaw: The Rise of BigSolo: Large Firm Refugees Who Start Their Own Law Firms

By Ross Kodner | Monday, February 23, 2009

SmallLaw-02-16-09

Originally published on February 16, 2009 in our free SmallLaw newsletter.

One of my 2009 predictions was that the pace of large law firm downsizing through layoffs, or even dissolving, would increase.

With Heller, Thelen, and Thatcher unthinkably gone, and the "Valentine's Day Massacre" already legendary despite occurring less than a week ago, the prognosis for "traditional" large firms is about as good as it would be for a Stage 4 cancer patient.

With a long dark winter ahead, according to Punxatawny Phil, Spring may not come at all this year for many BigLaw lawyers. As fallout from the economic chill that is gutting the bread-and-butter corporate business of BigLaw, an increasing number of large firm lawyers are jumping ship, before it sinks. And what are many choosing to do? They're going solo.

Yes. Solo.

From BigLaw to BigSolo ...

But these folks aren't ordinary solo practitioners in the way we've come to think of the category. So many solo practitioners have always practiced either on their own, or in small firm situations. They come up the hard way, fending for themselves, often with literally no staff at all, having to learn how to run a business, which most law schools never teach. Traditional solos not only have their JDs, but also a Ph.D from the University of Hard Knocks.

The lawyers emigrating from BigLaw are different. I call them "BigSolos" as opposed to the traditional "SmallSolos."

BigSolos have pinnacle level substantive knowledge in their single chosen practice area. For example, one of my clients is Nancy Hendrickson, recently a partner at Steptoe & Johnson's Chicago office and now the principal of the Law Offices of Nancy L. Hendrickson in downtown Chicago.

Nancy is an extremely experienced securities litigator. Now how many solos do you know who do any securities work at all, no less spend their time litigating securities matters? By contrast, SmallSolos often have general practices with a consumer focus — estate planning, family law, bankruptcy or personal injury work. Some SmallSolos represent small businesses as their outside counsel.

The BigSolo Paradox ...

But practice orientation is not even the biggest difference between BigSolos and SmallSolos.

Many large firm lawyers have always practiced in a BigLaw setting. They clerked for BigLaw while in law school. After their appellate clerkship, post-graduation, they became associates at BigLaw firms. They've wracked up 10, 15, or 20+ years at these firms. And now they're afraid for their jobs and book of business. They're worried about being laid off. They're worried about their firms suddenly doing a "Heller Ehrman" and announcing dissolution.

And most realize how little they know about running a business.

As Nancy Hendrickson observed, "I was used to having an army of staff available to help with everything — IT people whenever I needed them, paralegals and admin staff, not to mention the perks of large law firm life."

After years of being used to having endless staff to help with everything, and being insulated from the need to run, or the knowledge of how to run a law practice as a business, BigSolos may be ill-equipped to face the sudden and sometimes harsh realities of being a small business owner.

From the perspective of a new BigSolo, Nancy Hendrickson noted "that it's hard for clients in this economy not to be attracted to the same services at the lower rates I can now bill. The reaction has been overwhelmingly positive and I'm busier than I had expected. Clients are not only okay with my move to solo practice, they're thrilled at the lower cost impact on their businesses."

Notwithstanding these advantages, Nancy is the first to admit she needs professional assistance on the administrative side of her practice, especially technology and marketing. She astutely concluded that representing herself pro se on her own technology issues made little practical or economic sense. But will all newly minted BigSolos be so prescient? Hard to say.

The paradox is the gap in knowledge — a BigSolo might be a published, top expert in their specific substantive practice area, but may simultaneously be at the bottom of the curve in knowing how to start and run the mechanical and administrative side of law practice. Many also may not be used to having to make rain. A former colleague, perhaps the department chair while at BigLaw, may have been the rainmaker who showered business upon them. And now, the BigSolo must wear many hats:

  • Rainmaker
  • Firm Administrator
  • Office Supply Manager
  • HR Manager
  • Facilities and Leasehold Manager
  • Public Relations and Marketing department
  • Webmaster/Blawgmaster/Twitterer
  • CLE Compliance Administrator
  • IT Manager or IT Liaison with Outside IT Personnel

Oh yes, and one more, if in fact there's time:

  • Lawyer

BigSolo Versus SmallSolo ...

What does BigSolo mean for the solo and small firm market? Watch out! Your ranks are in the process of swelling as more and more BigLaw lawyers become BigSolos, either by choice or necessity. They'll bring top-notch legal skills and in many cases a potent book of commercial business.

When the economy tightens, and they need to compete for smaller clientele, they'll become arch-competitors — formidable challengers for the traditional base of SmallSolo clientele.

Some BigSolos will fail miserably and learn the hard way that all the grass is not necessarily as green as it might seem on the solo side of the fence. But the BigSolos who get "it?" The BigSolos savvy enough to retain the right outside expertise at the outset of their adventure? Look out SmallSolos because those BigSolos may eat your lunch and make LegalZoom seem like a gnat by comparison.

Just ask Nancy Hendrickson. She has succeeded by bringing in professional help. It's hard to imagine Nancy not running circles around her former practice and colleagues, offering the same top-notch BigLaw expertise at a SmallSolo rate — just what the current economy ordered.

I anticipate high demand and short supply for "do it all" consultants who can create a law practice to wrap around a BigSolo's substantive abilities. I'm thrilled to be among those helping to make this happen and transforming the legal world in the process. We live in interesting times. BigSolo, let's see what you can do.

Written by Ross Kodner of MicroLaw.

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