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Hanging up the solo practice shingle
By Michael Rappaport
Toronto
October 09 2009 issue


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Striking out on your own as a lawyer can be a daunting prospect even for seasoned practitioners with an existing client base and sufficient start-up capital. For lawyers who choose to go solo directly or shortly after articling, the challenge is even greater since they are often saddled with student debt, don’t have any clients and must struggle to master the law while learning the intricacies of practice management. Nevertheless, some fledgling lawyers are undeterred and choose to leave the safety of law firm life and fly solo. The Lawyers Weekly spoke with the following four lawyers in the Greater Toronto Area who went  solo directly or shortly after articling.

Bo Arfai
Articled: Blacks Sutherland LLP, a medium-size insurance defence boutique
Call: 2008
Firm: Bo Arfai Criminal Defence Lawyer
Practice areas: Criminal law, mainly domestic assault and impaired driving cases
Website: www.defendme.ca
Blog: www.soloinontario.ca

Jason Cherniak
Articled: WeirFoulds LLP, a Bay Street business law firm
Call: 2006
Firm: Jason R. Cherniak, Barrister & Solicitor
Practice areas: Primarily real estate law and litigation
Website: http://cherniaklawyer.com

Pei-Shing Wang
Articled:
for a sole practitioner who specialized in administrative appeals
Call: 2008
Firm: Law Office of Pei-Shing B. Wang
Practice areas: About a third business law, a third family law and a third administrative appeals
Website: www.pswlaw.ca
Blog: www.pswlaw.ca/blog

Zeenath Zeath
Articled: Financial Services Commission of Ontario
Call: 2006
Firm: Law Offices of Zeenath Zeath
Practice areas: Mainly family, immigration and criminal law
Website: www.zeathlaw.com

Hanging up a shingle
When Bo Arfai launched his sole criminal law practice in the summer of 2008, Canada was in the middle of a recession, so he was denied a bank loan and instead borrowed $10,000 on his credit card. Initially, to curb operating costs he tried to run a virtual office. He met clients in court or in cafes. However, he says, “It was hard to get clients to sign a $4,000 retainer in Tim Horton’s.” Eight months into his practice, Arfai moved into an office in a law chambers with 12 other lawyers. Besides a place to meet clients, Arfai says having an actual office gives his practice “the air of legitimacy.”

Both Pei Shing Wang, who drew on a $20,000 law school line of credit to start his practice, and Zeenath Zeath opened their offices in law chambers shared with other lawyers in the summer of 2008 and autumn of 2006, respectively. “The fact that I went into a law chambers with five other lawyers, saved me a lot of money, since I didn’t have to purchase a photocopier or fax machine,” Zeath says. She adds that the other lawyers were a source of support and referrals and that “working from home is not very productive… there are too many distractions.”

In contrast, Jason Cherniak, who started his practice in January 2008 with a $10,000 line of credit, opted to work from his home in Richmond Hill, Ont. He pays $200 per month for a virtual receptionist who answers calls and accepts mail and packages. He also rents boardrooms by the hour to meet clients and makes house calls. Although this arrangement has saved Cherniak a significant chunk of money, he says that he is looking forward to having an office and assistant soon.

Beyond office space, which generally eats up about a third of a solo’s budget, other expenses incurred during the first year include law society fees, insurance, practice management software, access to legal research databases and advertising and marketing. While, the law societies and legal insurers websites host guides and resources for lawyers contemplating flying solo, Arfai cautions, “there is no step-by-step book to follow.”

Attracting clients
Most solos are surprised by how much time and money they have to spend on advertising and marketing to attract clients. Wang estimates that a third of his budget in his first year was consumed by marketing. What makes spending on advertising especially tricky is that the results are often hit and miss.

All of the solos interviewed had websites, and Arfai and Wang are active bloggers. But Wang says, “Only about 10 to 20 percent of my clients come from the Internet. Most of my clients come from referrals.”

Of the three solos interviewed who signed up with lawyer referral services — which refer potential clients to lawyers for a free half-hour consultation — not one found it to be worthwhile. “It was a complete and utter waste,” says Arfai. His views are echoed by Cherniak: “I tried the law society’s lawyer referral service. But I found that it cost more money than it brought in. Ninety to 95 percent don’t want to sign up, they just want free advice.”

An even bigger boondoggle for both Arfai and Wang was their decision to pay for Google AdWords to increase their online presence. Arfai says his experience paying for Google AdWords was a “$500 per month fiasco,” and he says that he has succeeded in getting similar traffic to his website through search engine optimization and posting links on Craigslist.

Three of the four solos interviewed tried advertising in ethnic and community publications with mixed results. Arfai placed ads in Persian newspapers, Wang has advertised in the Chinese press and Zeath has advertised in Sri Lankan newspapers and a Muslim business directory. “After I advertised in the Sri Lankan paper, I got a lot of family and friends who said they saw my picture in the paper, but didn’t get any clients out of it,” Zeath says. She adds that advertising in the Muslim business directory did help her drum up business.

By far, networking with other lawyers and at community and political events has proved to be the best source of referrals. Arfai joined the Criminal Lawyers’ Association. Cherniak joined the Richmond Hill Rotary Club and the Richmond Hill Chamber of Commerce and is active in the Liberal Party of Canada. Wang is a member of six different ethnic, legal and trade associations. Zeath hands out her business card to everyone she meets and often attends Muslim fundraisers and events.

Administration and accounting
If you go solo — without a secretary, assistant or bookkeeper — you can expect administration and accounting to consume at least one day a week. Zeath says that she worries about “getting drowned in paperwork” and she is at a point in her practice where she could “use someone to help out,” but she’s not at the point where she “can afford to hire.”

Cherniak strongly advises that new solos make certain to set up their books and systems properly, because once you get busy you won’t have time to go back and fix mistakes. “In your first year as a solo, you should expect to get audited by the law society,” Arfai warns. While Arfai passed the rigorous law society audit, he was the only lawyer interviewed who used Excel spreadsheets to manage his bookkeeping instead of accounting software.

Too many new solos also make the mistake of not turning down clients and cases. “Initially, I took on files that I should have walked away from, either because the case was too difficult or the client was too difficult,” Zeath says with a tone of exasperation.
Getting paid can be another source of frustration. “Money is the biggest challenge. It is a matter of surviving the first year or two before breaking even,” Cherniak says. Cash flow can fluctuate wildly. In the first three months, Wang says that he had “virtually no money coming in… . then it began to trickle in but is still very volatile… . some months I have a lot of collectibles, other months nothing.” Wang advises asking clients for small installments before work is completed, rather than a large retainer.” He continues, “at least this way you will have some money in the trust account.”

The bottom line
Despite all of the challenges faced in the first year or so of going solo, none of the four lawyers interviewed regretted their decision. Arfai says he has “learned a lot about business from bookkeeping to marketing” and as an added incentive: “everything you make minus expenses goes to you.” Cherniak appreciates being his own boss, deciding “what to do and when to do it.” Wang says that lawyers contemplating going solo directly after articling must be “psychologically prepared to know that first year is very hard,” but on the plus side you “can turn down cases that are minefields.” Zeath says she likes the flexibility of flying solo and that it suits her personality, but she adds before hanging up your shingle, “you need to talk to other lawyers to get a sense of what to expect.”



Links for those looking to go solo

“Guide to Opening Your Practice,” published by the Law Society of Upper Canada (LSUC). It is available for free online at http://rc.lsuc.on.ca/jsp/guideOpeningYourPractice/index.jsp

“The Bookkeeping Guide,” published by LSUC. It is available for free online at http://rc.lsuc.on.ca/jsp/bookkeepingGuide/index.jsp

“Opening Your Practice,” continued learning education session held Dec. 10, 2008. The video stream and materials are available for purchase online at http://ecom.lsuc.on.ca/cle/product.jsp?id=CLE08-0120701

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