When I talk to attorneys thinking about opening their own firms, the cost of office space is almost always their primary concern. Indeed, the fear that they won’t get enough work to even cover the rent is the primary fear of most attorneys who are considering opening an office, and the cost of the office space is the biggest part of that fear. Payroll is actually a much bigger expense at most firms, but the erstwhile solo attorney is not even thinking in those terms yet. They can start with zero staff, but can they swing the cost of the office?
Allow me to eliminate your fears by taking you through some of the techniques I have used, or learned about through others. In fact, you’ll find that choosing your office space is a fun right of passage for starting your own firm.
1. The Free Office
Yes, it’s actually pretty easy to get free office space, at least in the sense that you won’t be paying for it out of your own pocket. When I first left The Big Firm to go off on my own, I had the same fears about overhead. I looked around and found some firms that offered a very good way for an attorney to get their own business going. Here is how it worked at the firm I eventually settled on.
The firm provided associates with their own office and (can you believe it) secretary at no cost. You could work on cases provided by the firm, or you could handle your own cases. If you were working on firm work, you received one-third of whatever the firm was charging to the client. So if the firm billed you at $300 (this was many years ago), you would be paid $100 per hour for every hour you billed.
If you brought your own work into the firm, you would receive one-half of the billing rate, with the other half going to the firm. And finally, if you brought in your own work, but another attorney at the firm worked the file, then the split was three ways. That last tier was really good because it was all passive income, and a win-win for all. I did not do bankruptcy, but I brought in some Chapter 11 bankruptcy cases for another attorney, and made $100 per hour for every hour he worked on them, as did the firm.
Running the numbers shows you just what a good deal this can be. If you work as an associate at a typical firm, you are expected to bill at least 150 hours per month. Assuming a rate of $300 per hour (which is low for my area), and assuming you worked exclusively on firm business, if you worked that many hours at this firm, you would gross $180,000 for the year. Not too shabby.
Now let’s create a mix where you’re doing about one-third firm work, one-third of your own work and one-third of bringing in work that others are doing, and now you’re grossing $270,000. Just so you know, I did not make those kind of numbers, both because the firm could not keep me that busy, and I did not want to work those many hours in any event, but the potential is there. I can say that my first year on my own, I earned more than I was earning at The Big Firm, and I had thought that I was being well paid.
I worked with this safety net for about a year, but my own business grew to the point that the splits were far outpacing what the overhead would cost. The final straw was when I settled my first employment case for a high amount, and the firm’s half of the contingency fee was in the high five figures. I had no issue with cutting the check to the firm because that was the deal, but it did occur to me that I could cover a lot of overhead with that amount. That was when I decided it was time to cut the umbilical cord. Running the numbers again, if you got to the point that you were billing 150 hours per month exclusively to your own cases, the firm’s half of that would be $22,500. That makes for some hugely expensive “free” office space.
This approach would probably not be available to a fresh out of law school attorney. This is not an environment where you can learn how to draft a complaint and discovery. The partners need you to be a profit source from day one to cover the overhead, and if they are having to cut your time to account for the learning curve, that creates issues. If you spent ten hours drafting a complaint but the partner can only bill the client for three, he can’t be expected to pay you $1,000 for the ten hours when the client is only going to pay $900. Even if you agree that he need only pay you based on the hours he bills to the client, he is still losing on the deal. Yes, now he’s only paying you $300 for the $900 he is receiving, but you wasted seven hours that could have made him money on other work.
If you have some experience under your belt from another firm, then this could be a great way to start if you want to assure yourself of almost no overhead (we did have to pay for our own malpractice insurance). And note, if you can’t find a firm that offers this arrangement, then get one to do so. I’ve done informal surveys of attorneys over the years at bar functions and such, asking them if they would be amenable to this arrangement. Many of them said they would jump at the deal if the attorney was the right fit. They probably would not provide you with a secretary, but many firms have extra office space. Why not let you use the space to do work for them, and to get a percentage of whatever work you can bring in? It adds an additional profit center to the firm but without the overhead a new, traditional associate would entail.
The only resistance you will encounter is from firms that have a lot of associates. By hiring an attorney at a set salary, a firm will make six to ten times what they are paying the associate, so why would they give you one-third? Your target firm is a small firm that needs help keeping up with the files, but does not have so much work that it is comfortable committing to a salaried associate.
2. Time for Space
Some might argue this isn’t much different than the prior approach, but I see a distinction, and I don’t like or recommended it. The time for space approach is fraught with issues, and it is too costly.
As the name states, you agree to work so many hours per month for a firm, and they provide you with an office. The number I typically hear is 20 hours per month.
I understand why some attorneys think this is a good deal. Twenty hours per month is only five hours per week, and that’s not a lot of time to be free from the worry of overhead. But is it really five hours per week? What if the attorney has an emergency, and needs you to work on a project for 20 hours in one week? Do you put all your own work on hold to fulfill the 20 hour requirement? Further, how often is a legal project defined to a set number of hours? If you draft a complaint and the other side files a demurrer, then the attorney will probably want you to oppose.
And consider the cost. Using our hypothetical $300 per hour, that 20 hours could be costing you $6,000 per month, assuming you had other work you could be doing. That is a really expensive office.
In the “free office space” arrangement I discussed above, there are two ways to look at it. If you are a glass half full type person, then when I was working on the firm’s projects, I got paid $100 per hour (twice what a new associate at a big firm makes – send me an email and I’ll show you the math), plus I had my own practice and I paid nothing for rent. If you are a glass half empty person then you could say that I was paying money for rent every hour I worked, but therein lies the distinction. The rent came only from my work, and there was no set amount I was required to work.
If you are certain you can keep yourself busy with work, then the time for space arrangement will yield you more income than the “free” arrangement, but then why lock yourself into a 20 hour per month arrangement that is going to cost you $6,000 per month in lost billables? If you are going to use another attorney’s office space, and he wants you to promise a certain number of hours per month to work off the rent, just tell him you want to pay a fair price for the space separate and distinct from what he pays you for the work.
3. The Virtual Office
If you are confident that you will be able to bill at least one or two hours in a month, then your rent is covered with a virtual office. In my area, you can get a virtual office in the most prestigious office buildings for less than $300 per month. To make sure my area is not way out of line with the rest of the country, I just checked the prices for virtual office space in Manhattan, New York, figuring that would be some of the priciest office space, and it goes for $399 per month there. That gets you a phone number, a receptionist to answer that phone, an address for your office and mail, a kitchen, and 16 hours use of the conference room to meet with clients or for depositions (or eight hours use of a guest office if you prefer). You’ll be charged by the hour if you need more time, but that’s not really a problem because presumably if you are spending time in the conference room, you are billing for that time.
This arrangement is becoming so popular that a new expression has been invented – “the untethered attorney”. With the ability to store everything in the cloud and work from anywhere, the option of a virtual office has become more viable to attorneys.
Be forewarned, however, that some clients are not entirely enamored with untethered attorneys. In fact, I’ve recently witnessed a new phenomenon with clients wanting to meet me in my office when there is no reason to do so. I represent many out of state and out of country clients. At any given time, I have probably not met 20% of my clients. However, recently I have had more prospective clients asking to meet with me, and it was not because they wanted to see the face of the attorney they were hiring. Rather, they come right out and tell me it’s because they want to see that I really have an office. A woman who recently hired my firm for a real estate dispute told me that she had spoken to two other attorneys, and when she asked to meet, they offered to meet her at her home. When she said that she would prefer to meet at their office, in both instances they confessed that they don’t actually have an office. She did not hire them, because she found that to be too “fly-by-night”.
For this and other reasons, I would not go with the pure virtual office arrangement, but it seems to work for some. One contract attorney who works for me has had only a virtual office for the past five years, even though he has a number of his own clients, and he would not have it any other way. Partially for my own selfish reasons, I offered to provide space for him in my office. It would have been very convenient for him, and I would have gained the benefit of having him around more to do additional projects. He declined because he is totally happy with his virtual office. He never has to “go into the office” unless he is meeting with a client. Even then, he often just meets with clients at a Starbucks or such so that he doesn’t use up his allocated conference room hours. But if they ask to meet at his office, he meets them at the executive suite.
Of course, presentation is everything. I’m reminded of the (probably dated) story of the two monks. Stop me if you’ve heard it.
The monks live in a monastery, where they are required to pray eight hours per day. One monk approached the head monk and asked, “May I smoke while I pray?”
The head monk responded, “No, my son, you may not smoke while you pray. You should not be distracted with earthly desires while communing with God.”
A second monk, who also wanted to be able to smoke during prayers, and had seen the first monk bomb, instead asked the head monk, “May I pray while I smoke?”
To that request, the head monk answered, “Yes, my son, of course you may pray while you smoke. You should always have a prayer in your heart and be communing with God at all times.”
It’s all in how you sell it. Instead of hiding the fact that you have only a virtual office, or no office at all, own it. Tell clients that you can keep your fees so low because you have no overhead. I know an attorney who started his own practice right out of law school, and then went off to travel the world. His whole shtick with prospective clients is that he does not maintain an office, and in fact he does not even live in America. Instead, he lives in countries with very low costs of living, and because of this, he can charge just $150 per hour.
He has amazingly dedicated business owners for clients who not only put up with this long distance representation, but embrace it and use him over and over for their cases. He’ll call me to tell me about a court victory he had that morning, having appeared telephonically in court from Vietnam. He even builds it into his fee agreement that if a case goes all the way to trial, the client has to pay his return airfare. He uses contract attorneys for any routine court appearances, or attends telephonically. He recently returned for a month, during which time he had scheduled multiple depositions from various cases. If you are going to go the “untethered” route, check out a service called LiquidSpace, which I discuss in more detail below.
I think a virtual office could be a fantastic way to start, but I can’t see it working for a thriving practice. We don’t accept walk-ins from prospective clients, but a number of our existing clients will pop in unannounced. Just this past week, I had a number of potential clients call to retain me, and each asked if they could come over immediately to show me the paperwork, sign a fee agreement and get the process started. How would you handle that with a virtual office? Drive immediately to the office and hope that a conference room is available? Meet them at a Starbucks instead? What if the fee agreement needs to be revised or you want to make copies of the documents they brought?
I have a much better approach, that costs just a little more. If you are considering a virtual office, I suggest you seriously consider the following arrangement instead.
4. The Virtual Office / Real Office Combination
I wish I could say that I came up with this brilliant idea, but I really just stumbled into it. Okay, I’ll take credit for recognizing the opportunity when I tripped over it.
One time when I was in the market for office space, I went and looked at the executive space in one of the most recognizable buildings in town (the Xerox Building in Santa Ana if you happen to be a local). The price of an office in the executive suite was ridiculous to me. Office space was going for about $2 per square foot in the building, but in the executive suite with all the amenities the rate was $5.50 per square foot.
Making matters worse, the only office suites within the executive space were not configured the way I wanted. Instead, I would have had to rent separate, non-contiguous offices for my paralegal and contract attorneys or stick them in cubicles. The regular space in the building would be $3.50 per square foot cheaper, but then I’d have to also rent space for a lobby, conference room, etc., and make arrangements to have my phone answered. It would be a false economy if I had to rent much larger space in order to accomplish what I would have with smaller space in the executive suite.
The solution? For whatever reason, when the company that ran the executive suite rented the space from the building, it decided not to take the entire floor, so about 20% of the floor was still available. I rented space from the building, configured just the way I wanted it, and also rented the smallest office available in the executive suite in order to avail myself of all of the amenities of that space. The office I rented from the executive suite was a small interior office, which I recall rented for about $400 per month (not much more than I would have paid for just a virtual office). I ended up with beautiful, high-end office space for less than half what I would have paid if I had tried to rent it all in the executive suite. Five hours of billable work a month was enough to completely cover the rent in both places, whereas I would have been working 12 hours per month just to cover the cost of less desirable space in the executive suite.
That small office was perfect for meeting with prospective clients, and the kept me from using up my allotted time in the conference room. I furnished the small office with super modern furnishings with high perceived value, so it was very impressive when I brought in prospective clients. However, I did not want them to think that was my working office, so I put this very cool looking engraved sign on the desk that read “Client Intake Room #2”. So, instead of walking in and thinking I had a dinky office, the clients saw a beautiful office suite in the most prestigious building around, and an attorney with so much gravitas that he could devote at least two offices just to client intake. (Because this was, after all, client intake room #2, with the main conference room being client intake room #1).
If you are thinking that this is a really sweet (or should I say suite) deal I fell into that you probably cannot duplicate, in reality you can do much better in any city where executive suites are available. I had my own reasons for getting that small office in the executive suite, but you could eliminate that expense by getting only a virtual office to supplement your real, working office in the same building. I had the added advantage that my offices were on the same floor as the executive suite, but that certainly is not essential.
Consider this amazing arrangement. You rent only the space you need for your working office, and then for just $300 per month or less you get a lobby, kitchen, receptionist, conference room and mail service. I now call this the Virtual Office / Real Office arrangement.
With this arrangement, your “real office” can be configured as an efficient working office without regard to how it will look to clients since they don’t ever need to see those offices. For my part, I created a hybrid, with a small area set up with a table and chairs when you entered the space, so I could meet with clients to go through documents without having to move them all to the conference room of the executive suite.
When scouting for this arrangement, be sure to keep the phones firmly in mind. If incoming calls are going to go to the executive suite, how do they get to you back in your real office? Also, are you going to be using a number assigned by the executive suite, or do you get to use a number you provide?
This last point is a big issue, because when you move you want to be able to take your number with you. The easiest solution is to have your own phone and phone number in your real office, and set it to “delay call forward” to the executive suite. Incoming calls will first come into your office, and if no one picks up it goes to the receptionist at the executive suite. This means you give up the ability to have the receptionist answer the phones and put calls through to you, but as you’ll see in a minute, that may be a feature and not a glitch.
I just slipped in a little test. Did you pass?
I just ran a little test a few paragraphs above, and I hope you spotted it. I wrote, “but then I’d have to also rent space for a lobby, conference room, etc., and make arrangements to have my phone answered.” If upon reading those words you thought to yourself, “you don’t have to have a conference room or lobby, or even have someone answering your phones,” then congratulate yourself. You have the proper mindset. Question everything.
You don’t necessarily need a conference room.
Since I had elected to rent the small office in the executive suite, that gave me the use of the of the lobby, conference room, kitchen, etc., but as it turned out the building had its own conference rooms available to tenants. Hogging one for an all-day deposition was not realistic, but I found out the building’s conference room was seldom used, and I could have used it to meet with clients. As to depositions, every major deposition service now offers free conference rooms for that purpose. Currently, even though our office has a very nice conference room, I often elect to take the deposition at the court reporter’s offices so that our conference room remains available for client meetings. A conference room is nice to have, but a new firm could easily function without one.
You don’t necessarily need a lobby.
The same is true of lobbies. I personally don’t like offices without a lobby, but I have seen many firms that make do without one. They simply situate a staff member’s desk near the entrance, and he or she greets any visitors. If the space for a lobby is not in your budget, you can certainly get along without one. (If you do decide to have a lobby, be sure to read my article, “Some Thoughts on Receptionists and Lobbies”.)
You don’t need anyone answering your phones.
As to having someone answer your phones, I had my own very strong set of biases in that regard for many years, and could not have been more wrong. I had this notion that to come across as a “real” firm I needed someone answering my phones. As it turned out, it is not only acceptable to answer your own phone, but clients love that personal touch.
Nominally, we have a legal assistant who answers the phone, but thanks to our Internet marketing, our phones ring constantly with new clients, so we all must answer the phones to keep up with the call load. My partner and I work on one another’s cases, but who controls a case depends on who brought it in and/or who has the greater expertise on a particular type of case. (For example, we both do employment cases, but she is the wunderkind on pregnancy discrimination cases.) Our phones are all equipped with caller ID, so when the phone rings we glance over to see who’s calling. If it’s one of my cases, I’ll pick up the phone and say, “hello George, are you calling about my email regarding the discovery responses?” What client wouldn’t love that level of attention?
In the past I experimented with using an answering service, and I don’t recommend it. We had our phones set up to ring through to the answering service if we were all on the other lines or out of the office. I like the personal touch of a live person, who could contact me if an emergency arose, but therein lies the problem. How is the operator going to know if it’s an emergency unless your client is providing way too much information? Also, some potential clients just don’t get the concept of an answering service, and get frustrated when they can’t get information about the firm.
Simple voicemail is the way to go. The key to using voicemail is just to be certain to return the calls as soon as possible. Your clients and potential clients will have no issue with leaving voicemail messages, so long as they know they will be getting a prompt return call.
Sometimes I don’t even let it ring through to voicemail. If I’m stuck on the phone with a long-winded potential client, and I see on caller ID that a client is calling, and everyone else is tied up, I just put the caller on hold for a brief second, pick up the second line and say, “George I see you calling but I’m stuck on another call, so I’ll call you back the minute I’m done.” (All my clients are named George; it’s the strangest thing.) Again, what client would not love that attention, as opposed to always going through a receptionist, then the attorney’s secretary, and then maybe finally reaching the attorney, like at so many firms?
Be sure not to turn your voicemail system into a labyrinth that takes 15 minutes to navigate. Opposing counsel in one of my current cases has an automated phone system that answers all incoming calls. It starts with a commercial about how great the firm is, then list all the hours of the firm (”we are open from nine to five, Monday through Friday, but we close for lunch from one to two on Monday through Thursday, and from one to two-thirty on Fridays”) then asks the caller to select the DEPARTMENT they want to speak to and lists all the departments, and then lists all the attorneys in the department you select, so you can pick the one you are calling. After all of that, nine out of ten times I get dumped into voicemail.
Back to the office space, in my opinion the Virtual Office / Real Office combination is the best way for a new attorney to go, if executive offices are available. If you are still nervous, you could begin with just the virtual office, and when you get to the point that you are having to run into the office all the time to meet with clients, then you could rent the real office space in the building. If you decided to pull down 500 square feet to start, along with the virtual office, your rent nut would be covered with just three to four hours of billable time. I use billable hours as the measure because it is likely that your hourly rate will coincide with rental rates in your area. In other words, if the going rate for attorneys in your area is $250 per hour, then your rent is probably cheaper than a location where attorneys are commanding $650 per hour.
One more tip on the Virtual Office / Real Office approach. Virtual offices are a little like gyms. In a perfect world, a gym wants you to sign up for the $50 per month membership, and then never use the facilities. Indeed, they bank on this because they have far more members than the gym could ever accommodate. An executive suite wants you to pay the $300 per month for a virtual office, but never actually use the lobby, conference rooms and kitchen (they will answer your phone and deal with your mail, but they’re betting those won’t be too intensive since you are not actually there). If you have office space in the building, they know you are going to be using the facilities as much as the actual tenants, so they don’t like that arrangement. At the time you sign up for the virtual office, you might be asked if you have space in the building, and if you do, they won’t let you have a virtual office. The solution is simple. Just be sure to set up the virtual office arrangement before you rent space, and confirm that there is nothing in the agreement that would ban you from renting space in the building in the future.
Don’t assume you need to rent space in a legal suite.
There are executive suites designed specifically for lawyers, sometimes referred to as Fegen Suites, after the (now disbarred) attorney who went big with the concept. I’ll refer to them as legal suites.
Legal suites used to be big with attorneys, because of the need for a physical law library. Having access to a legal reference library with all the various case reporters was crucial for a litigator, and most new solos could not afford that big expense. A legal suite was the most practical means by which a new attorney could have access to a law library. It also had the built-in advantages of surrounding the attorney with other attorneys, and most would offer an attorney service that would file documents with the courts.
With the Internet and low-cost subscriptions to Lexis and Westlaw (or the even lower cost alternatives), the need for a physical library has all but disappeared. The same is true of having access to an attorney service. We still pay a monthly fee to have an attorney service come to our office every day, but we are considering dropping it. Most of the courts we deal with now mandate electronic filing, and the others will soon be following suit. The instances of us printing physical documents for filing diminishes day by day.
This leaves as the only advantage of a legal suite being that all the other tenants in the office are also attorneys, who can provide overflow or take your overflow, and be there when you have a question. This is a nice advantage, but I find that a high percentage of the tenants in any executive suite are attorneys.
So, the bottom line for me would be the cost. When I was in the market, I always found legal suites to be appreciably more expensive, and for purposes of this article my research revealed that is still the trend. I think the assumption is that since all the tenants are all attorneys, they can afford to pay more for rent. But if you can locate space in a legal suite that is comparable to other space, then go for it.
Speaking of Lexis and Westlaw . . .
You may well have something equivalent in your state, but here in California there is one practice guide, called Civil Procedure Before Trial, published by The Rutter Group, that is the definitive guide to civil litigation. Every judge in California is provided with the three volume set, and it can be cited as authority in legal briefs. Access to that guide and the entire Rutter Group library is part (at an added cost) of our Westlaw subscription. I get access to 27 guides for what I would pay for about two of the printed versions.
For this reason, I have never explored the alternatives to Westlaw and Lexis, such as LoisLaw, Casemaker and Fastcase. However, if for whatever reason you have no similar circumstance or only occasionally have the need for legal research, I know attorneys who are quite content with these services. LoisLaw, for example, lets you pay as you go. So long as your fee agreement provides for it, you could buy a 48-hour research pass from LoisLaw when the need arises, and pass that cost along to your client like any other expense.
Bottom line on the cost of legal research: There are many options available to you, and the cost can be totally avoided or at least passed along to your clients.
5. The Home Office
If you rent a virtual office, then you’ll most likely be working at home, but here I mean “home office” in the sense of an actual office in your home where you meet with clients.
Before I was an attorney, I had a real home office for a publishing company I was running. I noticed there was a very large home on one of the main roads in Tucson (Speedway if you’re a local) that had become a haven for transients. I could not imagine why such a beautiful home like that was abandoned, so I checked the public records and tracked down the owner. I was thinking that if the owner was willing to let the home sit there with no tenants, they might give me a real deal on the rent because something is better than nothing.
The owner told me that they had no interest in renting the place, but that I could live there for free just to keep it from being destroyed. How’s that for a deal? I anticipated spending the next few weeks getting the house into habitable condition, but when I drove by the next day, the owner had a crew inside getting it into shape.
I tell this story just to show you what can happen if you to keep your eyes open for opportunities.
The house had a main house and two guest houses. I used one of the guest houses, that faced a different street and had it’s own address, as the office for my business. If your home is arranged in such a manner that clients could come in through an entrance for just the office, I suppose you could make something like that work. I can’t picture it though.
As a litigator, I know that no matter how carefully I screen my clients, some crazies make it through. The thought that a client who is so stressed about their case that they call me 20 times a day at the office, would now have access to me at home, makes me shudder. Even with my publishing company, if someone came to the business after hours and found it closed, they would just walk around to the house and ring the bell.
I’m reminded of the story from a criminal appeal attorney I know. To make some extra money, she put herself on the criminal appeal panel. The state would pay her to handle appeals on behalf of convicted criminals. Since she wasn’t dealing with the best of clients, she used a post office box as her address, and communicated with her clients, if at all, by telephone (usually the jail phone). One day she went to pick up her mail, and one of her clients approached her at the box. He had camped out at the post office, waiting for the person who opened that box. The experience left her so shaken that she stopped doing criminal appeals.
I currently have zero experience with the LiquidSpace service, but I’ve heard good things from others. I’m going to test the service soon so I can report back to you. Here’s how it works.
Either on your computer or using the available app on your phone, you search for available meeting space. The space can be a desk, office, meeting room or training space. You are shown the available options and prices, and if you find something you like, you can reserve the space.
I find most of the prices to be crazy expensive, but I suppose it depends on your circumstances. In my area, the conference rooms appear to average about $60 per hour, and offices are about $30 per hour. If you had to meet with ten clients per month, and paid $30 for an hour of office time each month, then you are up to $300 per month. You might as well rent a virtual office and use the allotted conference room time. However, if your practice is such that you seldom if ever need to meet with clients (as in the case of the aforesaid criminal appeal attorney), then you might be able to make use of this service.
But here is what I find interesting with the LiquidSpace service. Apparently, Marriott Hotels is a partner to the service, and it offers a great deal of meeting space for FREE. I’m not sure why that makes business sense for Marriott, but I assume they think it is beneficial to get people into the hotels, where they will buy food and drinks during the meetings. So if you are going to work out of your home but don’t want to meet clients there, with a little planning you could hold all your meetings off-site for free.
6. The Traditional Leased Office
Depending on market conditions, you can get some real steals on traditional space. For the first 15 years of my practice, we either shared space with other attorneys or used an executive suite along with a real office as discussed above. We did rent our own space for a while, but it didn’t have a kitchen, and that was a real drag. It had a refrigerator, coffee bar, microwave and toaster oven, but no sink. Trust me on this. A kitchen without a sink is not a kitchen. What do you do with all the half finished cups of coffee? I will never again rent space that does not have a sink.
About five years ago, we decided to really do it right. We rented space and had it built from the floor up to our specifications. It was in an older building, but the landlord had just had it completely renovated and, frankly, I don’t think he realized what he had. He was no doubt still thinking in terms of the lease rates he received before the renovation, so the price we negotiated was far below market value, and included several months of free rent and about $30,000 worth of improvements paid for by the landlord. Our space is stunning, with a spacious lobby, large conference room with an all glass wall, high ceilings, ten foot high doors, a large kitchen (with a sink!) and multiple offices. The space never fails to elicit a compliment from clients.
I provide this level of detail about our current space because I want you to know that even this incredible space, custom built to our specifications, is fully paid for if my partner and I can each come up with just five hours of billable work per month.
The options for office space are as limitless as your imagination. I know two attorneys who wanted to work from home, but also wanted the image of a real office. They decided to rent space with a single office, and they use a simple Google calendar to reserve the use of the office when needed. When a client calls for an appointment, they check the calendar and set the appointment for a time when the office is available.
None of us like to take on new debt, but if you are contemplating starting your own firm, don’t let any concern over rent money cause hesitation. So long as you act wisely, two to ten hours of billable time will cover the entire range of office space options for a solo or small firm.
Some thoughts on where to locate your office.
The point of all of this, again, is not to be limited by your preconceived notions. Don’t get caught up in all the elitist nonsense that permeates the legal profession. In that vein, question all the assumptions and preconceptions you may be carrying about where you should locate your office.
One of the great things about the practice of law, unlike most other businesses, is that the geographic location of your office is not very important. When a client contacts me and interviews me to determine if I am the attorney they want to hire, the location of my office is almost always the last thing they ask. Even when we then determine that my office is a two-hour drive from their location (or on the opposite coast for that matter), it is seldom a problem. Location has become even less of an issue due to the Internet. Documents can be passed back and forth via email, and face-to-face meetings can take place via Skype. Trust me, if the client is convinced you are the best attorney for the job, they will be willing to drive or fly to get to you.
So, if your location is flexible, then why not chose an office location that will make your days there as enjoyable as possible? This may seem self-evident, but look at where so many law firms are located – high-rise office buildings in urban centers. Do these say fun to you?
I am amazed every time I go to a deposition at a firm located in downtown Los Angeles. No matter the time of day, you fight to get there, you park in a garage (at a cost of $35 or more) where you have to breath exhaust fumes during your long walk to the elevator, which takes you to the lobby where you must stop at security and wait while your right to be there is checked. In a post-911 world, it is assumed that every high-rise in a big city is a bombing target. If you pass the screening, you go to another bank of elevators that finally delivers you to the floor where the office is located. Of course, the firm pays a premium to be located downtown, so the square footage costs dictate that the attorneys’ offices be shoebox small. If during the deposition it becomes necessary to use the restroom, that requires getting a key from the receptionist because all the restrooms are locked against any restroom attackers who may be wandering the halls.
What a great lifestyle. I’m sure it really makes these attorneys want to go to work in the morning. This self-imposed misery fascinates me, so I often ask opposing counsel, in the nicest possible way, “Why the bloody hell are your offices located in downtown Los Angeles?”
I inevitably get one of three answers. They respond, (1) “where else would we be?”, the implication being that any real firm has to be in the downtown area, (2) “this is where our clients are located,” or perhaps the worst, (3) “I don’t know why our offices are here.” In this last case, the offices were located there by committee long ago, but none of the attorneys currently working there can remember why.
As to the clients being located there, such may be the case, but so what? That would be a convenience if it was necessary to spend a lot of time at the clients’ offices, but that seldom happens. When I ask how many times the attorney has left the office and walked over to a client’s office, the answer is almost always “never.” Meetings are often held at the law firm’s offices to prepare for a deposition or review documents, but the client could easily drive to an office that was located outside the downtown area, perhaps on the way to or from his own home or office.
The ability to locate your office where you want is one of the great advantages of the practice of law. Don’t give up that benefit. My offices have ranged from the most “prestigious” high rises in Los Angeles (before I came to my senses) to single story structures in a garden park-like setting. I have never gained or lost a client based on the location of my office.
Here are a few things to consider when choosing a location for your office.
1. Proximity to your home.
Of course you will consider this in the normal course of things, but take it to the next level. In most urban areas, we tend to think of the “bedroom communities” and the business/office areas as separate. So, you might be thinking of a location that is close to your home, but you still probably are thinking of a location within the business/office area and away from your residential community. Where I work in Southern California, for example, the legal culture dictates that “real” attorneys are located in Los Angeles, but if you must have an office in Orange County, then only the cities of Newport Beach or Irvine are permissible. At one time, Irvine was not acceptable, but a major business center opened adjacent to the 405 freeway, and after some major firms located there, that became a limited exception. To locate in the bedroom communities such as Orange or Laguna Beach immediately brands you as a second rate attorney.
What a crock. This snobbery only exists among attorneys; the clients will be unaware of it. Why should you care about impressing other attorneys? My last office was in the City of Santa Ana, which for some reason ranks at the bottom of the snob scale, but happens to be the city where the state and federal courts are located. When a defendant receives a summons, requiring him, her or it to file an answer in the court located in Santa Ana, guess what city they use in their Internet search term? We got new cases every month simply because our office was located in the same city as the courthouse.
On the day that I am writing this I saw another example of how pervasive this attitude can be. On a legal listserv to which I belong, someone asked the other attorneys if they had any experience with meeting clients at their home offices. Someone responded that he likes having a “real” office because even though he might have to work late on given occasions, going home gives him a mental break from the office. He opined that it is probably healthier to separate home from work.
To this observation, another attorney responded, “I think the claim that it’s unhealthy to transform one’s home into one’s office is nonsense! Is it healthier for me to commute 47 miles each way to an office?” In that attorney’s mind, he has only two options: run his practice out of his home, or rent office space in some mandatory location that is 47 miles from his home.
How much better will your life be if you can cut your daily commuting time by an hour or more? I have always located my offices 30 minutes or less from my home, but I located my most recent office just four miles from my home, and four miles from court. My commute to the office is about five minutes, and I can leave my office at 1:15 and be arguing a motion in court at 1:30. My only commuting issue is that if Freebird comes on the radio, I’ll already be the office before it gets to the good part.
Look around your local area to see if you can find space that is acceptable. Think outside the box. I have seen offices created from homes in historic districts that blow away the prestige factor of any office building. There are single-story buildings set up around park areas and fountains that are just breathtaking.
Again, I say all this with the caveat that while your office location is not particularly important, the office itself must project a professional image. This may be my own snobbery coming through, but I would never use retail space as an office. There is something about the connotation of a “storefront lawyer” that bothers me. But that’s just me. There’s something to be said for going where the clients are, and if that’s to your storefront, I support you.
2. Proximity to lunch time activities.
At one time I seldom went anywhere for lunch, preferring to have something at my desk so I could go home that much sooner. I have since decided that leaving the office for lunch provides a needed mental break and makes the day more pleasant. However, I still do not want to take the time to drive somewhere and fight the lunch crowd. Therefore, when I am considering office space, I look for a location that provides some diversions if I want to take a break.
When I worked at The Big Firm, the offices were located in a dining and entertainment complex in Century City, California. Getting to work was horrendous. The complex is not near any freeways, so the commute just from the freeway exit to the office complex would take 30 minutes. Then I would spend 10 minutes looking for a parking place in the massive underground garage (the biggest underground parking complex west of the Mississippi, I was told), walk five minutes to the elevator banks and wait for an available elevator. Thus, I was spending over an hour each day just commuting to and from the freeway. The actual freeway commute was another hour. It’s no wonder that firm has since closed these offices (much to the chagrin of all the partners at that office who had nearby homes).
However, what the complex had going for it was that, once you were finally there, it was very nice. There were probably 15 different places to eat, numerous shops, and live music in the common area during lunch. The 42-story twin office towers were positioned such that they created a venturi effect, providing a cool breeze across the plaza even on the hottest summer day. Our offices were impressive, but often as not I would meet the clients downstairs in the plaza or at one of the many restaurants in order to give myself a break from the office.
I hated the commute but I loved the working environment. I have always looked for a similar arrangement when I pick an office. My last office was 20 minutes from my home and was located in a business office/retail stores complex. It was a two-story building so I did not have to deal with elevators, and my car was parked (for free) just steps away from the entrance. For a break, I could sit outside among waterfalls and fountains and listen to live music. I have a wireless network, so I could take my laptop computer with me and continue working.
My current offices are even better. When you are able to break away from traditional thinking, you not only open up far more options for space, but you often find much cheaper space. For what I was paying for my previous office, I have twice the space, and that affords more design options. I was able to design the space from the ground up, and no client has ever failed to utter a “wow” upon entering (although my partner gets the credit for the impressive color palette – I thought the walls should all be white). The offices are again adjacent to a retail center with several places to eat.
I tell you all this not to invoke envy but to illustrate the difference a pleasant working environment can make. Spend some time exploring all your options and keep your eyes open for even better opportunities. As happy as I am with my current offices, I have long dreamed of offices overlooking the ocean. In fact, I did work in such offices with a view of the ocean during my summer internship at The Big Firm, but that was in a high-rise with sealed windows. I want an office with windows that open so that I can hear the ocean, preferably with a deck or balcony where I can sit and eat a bagel and read the Wall Street Journal in the morning. Doesn’t that sound much more pleasant than the sort of offices that most attorneys seem to opt for – tiny offices downtown with only a view of the other downtown office buildings?
3. Proximity to a law library.
When I first started my practice, Lexis and Westlaw charged by the minute and for every line printed, making electronic legal research very expensive. By comparison, the flat fees now offered by both services make them seem incredibly cheap. We get the basic service, and have added on extras such as the entire Rutter Group library, and the cost is only about $100 per month per attorney. We used to charge our clients a flat fee of $25 per month for research costs, if any such services were provided for them in that month. We have elected not to do that anymore, but at the time it paid for our Westlaw expenses.
Still, as a starting solo, even the flat fee for electronic legal research may appear a little daunting. And even if you do subscribe to a service, there are times that your subscription won’t include what you need, and you’ll want access to a law library. For these reasons, consider the proximity of the nearest law library when deciding on where to locate your office. Think beyond the County law libraries. Most law schools make their law libraries available to attorneys, and at least here in California, it seems like there are law schools everywhere. I recently discovered a law school just a couple of miles from my current office. I haven’t visited the school’s law library, but the fact that the school is not ABA approved will likely have nothing to do with the quality of its library, at least in terms of the research materials that I would ever need.
4. Ease of accessibility by your clients.
Although it is true that clients will not be particularly concerned about the location of your office, you do not want a situation where the client finds it difficult to get to you. Therefore, make certain that the office is close to major streets and freeways. Then, once the client arrives, make sure that he doesn’t have to run some gauntlet to get to you.
I once visited some potential office space that was absolutely stunning. However, when I arrived, it took me a good ten minutes to find a parking place, and the parking garage was a very long distance from the building. Making matters worse, as I walked toward the building there was no indication of the location of the entrance. I approached three different doors, only to find as I got close that they each were posted with a sign that read, “This is NOT an Entrance.” I sadly had to turn down the incredible office space, quite reasonably priced, because I would never put my clients through what I had experienced.
Clients can be very fickle, and can be easily dissuaded from making it to your office. Especially when your client is the defendant, they are outraged that they are going to have to pay you to defend them against what they perceive to be a frivolous action, and are convinced that there has to be some other way to handle the situation. Don’t give them an out by making it difficult to find your office.
I once had a client that set an appointment, then called the day of the appointment for directions. While en route, she called again because she was lost, then called once more to say she had arrived. The final call came from the entrance to the parking garage. She saw the posted rates, and was calling to confirm that we would validate her parking pass. After we confirmed that there would be no charge for parking, she said she would be right up. She never appeared. After all of that effort, she apparently decided to try one more time to resolve the matter without an attorney.
Be creative in picking a location for your office, but don’t go so far off the beaten path that clients can’t find you.
Some thoughts on furnishing and decorating your office.
Having found a fun location to work, next spend a little time and money to make the place you sit more enjoyable. This seems so obvious, but I am amazed by what I see when I visit other attorneys in their offices. I’m not even talking about the stacks of paper and boxes. Clutter can wear you down and you should strive to eliminate it as much as possible, but I’m talking about the very nature of the office.
One of the first indications I had that working for The Big Firm was not a good idea took the form of all the diplomas lying on the floor. In at least half a dozen offices, I saw the associates’ framed degrees propped up against the walls, waiting to be hung. And lest you think the degrees had been taken down so the walls could be painted or something, they were still on the floor years later. The clear message to me was that the attorneys were too busy and/or too beaten down to worry about something as trivial as putting up their diplomas.
My father taught me the expression, “there is nothing so permanent as a temporary measure.” When you move into a new office, you will inevitably create a number of temporary measures. After you get settled, look around your office and see how many “temporary measures” you are living with. Have boxes in the corner become standard? Is your computer monitor sitting on a phone book? Has your couch become the permanent location for pending filing? Are your walls devoid of anything interesting, or worse, bearing the usual generic “art” that only a law firm would hang?
Arm yourself with a pad and pencil, and take an inventory of all the details needing attention in your office. Use this inventory as a checklist, and start fixing all the problems, until you have an efficient and pleasant place to work and visit. Look at it his way. On a typical day, you will spend eight to ten hours sitting in your office. If you arrive home by six and spend the rest of the night vegetating in front of the television before heading to bed (not something I am recommending), that would equal about four or five hours in your family room. Thus, you spend far more time in your office than you spend in any room in your home (time spent sleeping in your bedroom doesn’t count). To me, that means my office should be just as comfortable and inviting as my living room at home.
When we leased our current space and had it built to specification, we also decided to go with a new, very modern theme. Our furnishings always elicit positive comments because they are so unexpected in an attorney’s office. I picked modern because I like the look but, just between you and me (don’t tell my clients), it turns out that modern furniture can be very inexpensive. Look at the black table chairs in the photo at the top of this article. Those could be $1,000 chairs from some ultra chic, overpriced furniture store, or they could be $10 chairs from Ikea. With modern decor, you can’t really tell.
Almost without exception, when I visit another lawyer’s office, the furnishings are very mundane and predictable. Adding some style to your office furnishings is an immediate way to make a good first impression on any visiting clients. I like to think that our modern look creates the immediate perception that we think outside the box.
Think about your own experiences and perceptions. If you visit an attorney with old, worn furniture, and then one with new, impressive furnishings, all other factors being equal, which one are you likely to retain?
One word of caution about shared office space.
One of the most attractive advantages of being solo is being able to run things the way you want to run them. Don’t lose that advantage by deciding to rent space with other attorneys. If your office mates decide they must have a receptionist and you don’t want to incur the cost, how is that going to be handled? If you are sick of the traditional lobby furniture you’ve seen in every law firm and want to go modern, but your office mates all think that a law office must look like a law office, how will that be decided?
For a few years, I rented office space from a much larger firm where a friend of mine happened to work. Yes, I gave up the ability to dictate how the lobby was furnished and what type of coffee would be in the kitchen, but it was a known quantity going in and I could live with it. Since I was paying a set rate for my offices, any decisions the firm chose to make about the library or copy machine did not impact my expenses. I far prefer this type of arrangement over an arrangement where I am sharing expenses with other attorneys. Under that arrangement, I can almost guarantee that they will incur expenses that far exceed what you would have done, or on the other end of the spectrum will not be willing to incur any expenses, leaving your office looking like it was furnished and equipped by Goodwill.
One idea I have long wanted to try but have just never gotten around to pulling the trigger on is to rent far more space than I need, and rent the excess space to other attorneys at a rate that would pay for or at least defray the cost of my space. I came very close in my current office space, because a large amount of adjoining space was available, but I just did not want to become manager of executive space, having to deal with attorney complaints about parking and the air conditioning settings.
Don’t be shy about picking the bones of your fallen brethren.
OK, I intentionally made that sound macabre, but the reality is that you can get some amazing deals from auctions and equipment sales of failed law firms and other businesses. Lest you think that this is contrary to my normal butterflies and unicorns tone when discussing starting your own firm, let me assure you that these sales do not result from solos and small firms. These are auctions and sales of large firms that collapsed under their own weight. (Heck, we small firms don’t have enough stuff that an auction would make sense!) If benefiting from the failure of another makes you feel bad, consider that the stuff is being sold to pay off debts, and you are doing your part to help. Run up the bid if it makes you feel better. My current desk was purchased at such a sale, and it was an incredible deal. It is a huge, all wood, wraparound desk with built-in file draws, and it came with two massive cabinets. I’ve seen similar furniture, although not as good of quality, for $5,000. I paid $500. You can also save huge on electronics, such as computers, copiers, printers, etc. Just proceed with caution so you don’t end up buying computers that are running Windows 98. Do an Internet search for “office equipment auctions” in your area.
Now that you have selected your comfortable and awe inspiring office space, it’s time to fill it with the equipment you’ll need to for an efficient law practice. Click the NEXT button and I’ll show you what I use and recommend.
1 thought on “Starting Your Own law Firm – Choosing Your Office Space”
Well written and thank you.