Sep 15, 2011
Deciding Where to Locate Your Solo Practice, Part 1
by Debra Bruce
Whether you are a new law grad or a seasoned attorney, you might be scratching your head about the best place to open up a new solo law office. Some of you are thinking: “That’s easy. I’m going to have a home office until I get enough clients to pay the rent somewhere else!”
That may be a good decision for many of you, but I hope you will make that decision based on a thorough analysis of your options. This series of posts will discuss some of the choices, along with factors to consider.
1. Home Office
Pros: Third Wave blogger Chuck Newton blogged about his decision to cut back his multiple-office practice and move to a home office. He emphasized the importance of keeping fixed expenses low in your practice, in order to be able to adapt more easily to the ebb and flow of business. In addition to saving rent, you’ll save on gas and car maintenance costs when your commute is just down the stairs. You can use some of the equipment you already own, reducing costs for a start-up. You may have more time with family because you don’t waste time commuting, and you are more physically available. You can dress very casually. You won’t lose productivity while waiting for the cable guy to show up or cooking a pot roast. You may be able to get a tax deduction for your home office, covering part of the expenses you would have anyway for utilities, insurance, property taxes, etc. As Chuck demonstrates in his blog post, a home office is a viable option for seasoned lawyers, as well as new ones.
Cons: A home office can feel isolated. You can’t just step over to the office next door to extend an impromptu lunch invitation or discuss a legal issue. If you live in the suburbs, even planned get-togethers can seem too inconvenient. If you need to meet with a client, a home office presents a less professional image. With certain practice areas that involve volatile emotions, it may not be safe for you or your family to meet with clients at your home. You may need to travel to clients’ offices or make other arrangements for client meeting space. If you have any staff, even part-time, it will need to be someone you can trust in your home alone while you go to a meeting, to court, etc. Some lawyers struggle with the distractions of home. Family members may not respect that you are at work, and may interrupt you. Dogs bark, babies cry and junk food calls to you from the pantry. Today it is hard enough have true down-time. You are never away from your work when it is just down the hall.
2. Shared Office Space
Pros: Landlords usually charge a lower price per square foot for larger spaces. Therefore, you can achieve some economies of scale by sharing office space with other lawyers. You can also share equipment, such as copiers, scanners and phone systems. You may share staff costs as well, but that can get complicated pretty quickly. If you choose to share space with lawyers who have different practice areas, but who serve a similar target audience, they can be a good referral source.
Cons: If you share staff, for some reason, differences of opinion about work performance and duties tend to be more irritating in an office-sharing arrangement than in a partnership. In many jurisdictions you will need to take significant steps to make it clear that the office mates are not partners, which can create a less than optimal image. The phone will probably be answered with a generic and rather sterile greeting of “Law Office.” Lease negotiations can be a nightmare because too many people have to read and sign off on the documents. At renewal time, the nightmare can get worse as some office mates waffle and delay decisions about whether they will continue the arrangement. Maintaining client confidentiality and other ethical responsibilities can be more difficult with several law firms under one roof.
3. Subleased Space
Pros: This is another version of shared office space, only you don’t have a direct lease with the building owner. Your landlord is another law firm. In a slow economy many law firms may cut their employee count, but they can’t reduce their office space due to a long-term lease. Sometimes a law firm will offer free or cheap space to new lawyers or laid-off lawyers to give them time to build up some clients. Even if you pay full rent, you’ll get the benefit of amenities, such as a kitchen, receptionist, conference rooms, equipment, and sometimes even furniture, usually at a significant discount to the pro-rata cost. Since you are right down the hall, you stay top-of-mind for referrals. The other lawyers may be more likely to pass on to you a matter that is too small for their firm, or that doesn’t fit their expertise. As they develop familiarity with you and confidence in your work, the relationship might ripen into an employment or partnership situation, if you are interested.
Cons: As a subtenant, your rights are derivative of the rights of the main tenant. If they don’t pay the rent, you can be evicted. In a low cost or free arrangement, the law firm you sublease from will probably reserve the right to kick you out whenever they need the space, on rather short notice. Even if you have a sublease for a set period of time, when their lease ends, your lease ends. At the end of the lease they may move or reduce the size of their space, without regard to your needs or preferences, requiring you to find a new location. As a mere subtenant, you probably won’t have any say over the performance of staff, even though they may sometimes interact with your clients. You’ll still have most of the other disadvantages of shared office space, and it may be even more difficult to distinguish your separate status from the larger firm.
4. Executive Suite
Pros: You have cost efficiencies of shared space, and a full-time receptionist to answer the phone and greet clients. Office furniture may be included. The term of your lease is not dependent on the term of any other tenant’s lease. Professional management deals with most of the equipment maintenance, staff performance issues and problems with other tenants. You have your own direct telephone line, and the receptionist answers with the name of your firm. The other tenants may be non-lawyers who can use your services and make referrals to you. Usually executive suites are located in desirable business locations.
Cons: You have no control over who your suite mates are, and they may change frequently. There may be upcharges for using the amenities, such as the copier or conference rooms. You do not set the policies or operating hours of the larger office. You will need to book conference rooms in advance, and they could be in high demand. While the reception area is usually nicely appointed, the individual offices may be rather small and plain. In an office situation that includes non-lawyers, the personnel may not have proper appreciation for client confidentiality and other ethical responsibilities of lawyers.
5. Home Office + Office Hoteling
Pros: Office hoteling packages allow you to work from a remote location most of the time, while maintaining a business mailing address, a building directory listing and a phone line with reception services. It gives the outward appearance of a brick and mortar office, at reduced cost because you only use it when you need it. You can reserve an on-premises conference room to meet with clients or an office to work in, but you don’t have a specific office assigned to you. Business machines such as printers, copiers and faxes are available. Notaries and administrative services may also be available.
Cons: Since the concept works on the expectation that only some of the tenants will book offices at any one time, an office might not be available to you during peak usage. Office hoteling will also have most of the same issues as executive suites. Because you do not have the same office each time, however, you will not be able to use your own printer or copier. Lawyers should be aware that modern copiers and printers have a buffer that temporarily stores images that are copied or printed. Therefore, copies of confidential client documents could be accessed from a public machine.
Please share your thoughts and experiences regarding these different office arrangements in the comments below. Chime in with additional pros and cons.
In Part 2, I’ll talk about choosing the geographic location of your office.
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®.