Mar 3, 2011
In Business, Everything Has a Cost
Adventures of a Gen Y Solo Practitioner
There has been much discussion about how simple it is to start a law practice, or any other business for that matter, from your kitchen table with only a laptop. Recently, Joseph Brown, a solo lawyer and minimalist, wrote a great article about the MicroFirm:
I absolutely agree that this is a great way to get started since that is exactly how I got started – on my couch with my four year old laptop and an internet connection. My startup costs consisted of the initial payment for malpractice insurance. I did not have a website nor business cards but I did have three paying clients so I am not one to poo poo the MicroFirm.
However, I do think its important to point out the following:
In business, everything has a cost.
Using an old laptop that gives you trouble every now and then has a cost. The cost is lost time that could have been spent working and the ensuing frustration that prevents you from being creative. Working from a space that is not conducive to maximizing your creativity and productivity has a cost. In my home office, it takes me at least 10 hours to get 7-8 hours of work done due to the inevitable personal life distractions that invade my business life. And in my case, I’ve taken steps to mitigate this ‘expense’. I am in the midst of negotiating a lease for office space as I write this.
Not purchasing software that makes work flow and management efficient has a cost. Not having staff that can handle certain time consuming tasks has a cost. I recently invested in virtual law office software which has definitely helped me streamline my work flow. And now I absolutely cannot wait to hire a virtual assistant to do some of the things that it drives me nuts to do.
As solopreneurs, we are the lifeblood of our companies. Our finite amount of time, energy and creativity is our company’s greatest asset and without it, our companies do not exist.
I talk with many young entrepreneurs who are unwilling to invest money in the operations of their businesses, whether it be the cost of hiring a lawyer or buying insurance. Many of us young lawyers and entrepreneurs are willing to invest all of our time but are scared to invest our limited funds. The irony of this is that our time is just as valuable, if not more valuable, than our money.
(Note: I know some will say that most of us young entrepreneurs and lawyers truly don’t have the funds to invest in our businesses but I question that since we seem to always have the funds for the latest Apple gadgets. $500 can go a long way in your new business.)
Sweat equity is not necessarily a bad place to begin down the path of entrepreneurship. However, we must recognize when we have reached capacity and begin to use money to build a team around us to pick up the shortfall and spur productivity…and this team can and usually does include technology.
I have heard more than one venture capitalist say that they will not fund a solo entrepreneur. Venture capitalists expect that solo entrepreneurs will eventually fail without a team.
I am not suggesting that all young lawyers begin hiring assistants and paralegals today. What I am suggesting is that it is important to invest in a “team” as soon as you can. A mastermind group of peers, an accountant, law practice management software and dedicated workspace designed in a way that helps you be as productive as you can, may, and dare I say, likely will, lead to additional client development and therefore greater profitability. Isn’t this a significant reason for our efforts?
Carolyn Elefant asked a thoughtful question last December that no one seemed to answer. So I will ask it again and hope that you’ll answer in the comments below:
How far will you go if you don’t grow?
Is your frugality costing you money? In what ways could you spend money to increase productivity and profitability in your practice? Do you want your practice to grow beyond you? What are you willing to invest to spur such growth?
All opinions, advice, and experiences of guest bloggers/columnists are those of the author and do not necessarily reflect the opinions, practices or experiences of Solo Practice University®.