How New Lawyers Can Generate Cash Flow

Where to Find Fast-Cash Assignments

“I wouldn’t say I had a revenue stream right away, it was more like a revenue drip. But every time one of my articles ran in a real estate investment magazine, I got three or four calls that resulted in a few new clients.” – Traci Ellis, solo

Just starting out, you may have to go at least a month or two (or more) before finding a paying client let alone to complete the work and to collect your fee. How do you generate revenue in the meantime? In this section, I’ll discuss how to generate what I call “fast-cash”.

In defense of fast-cash, it does alleviate some of the financial pressure so you don’t feel compelled to accept marginal cases or difficult clients just to pay your bills. But it’s worth noting that fast-cash assignments can be addictive, a temptation for new solos that might lead to neglect the marketing so critical to attracting their own, more lucrative clients. You could, for example, open your new firm by accepting a document-review assignment at $35/hour plus overtime (for a total of 50 hours). Good money, especially if the assignment lasts a few weeks. But what if it goes three months? Ten-hour days, 50-hour weeks, don’t give you much time for client-development. Yes, you would have more income, but you wouldn’t have advanced your goal of getting your new practice off the ground.

That caution aside, here are some time-tested ways to generate revenue:

Temporary placement agencies – The first agencies didn’t appear until the 1980’s; two decades later, contract lawyer placement is flourishing. Now every major legal market in the country supports competing agencies. Most of them work with in-house legal departments and law firms, although placements are also made with government agencies and with other solos.

Here’s how it works:

Lawyers (or law office administrators) call the agency – usually at the last minute – to request a temporary placement when they need help. The agency reviews the hiring lawyer’s requirements, and searches its database (the “pool”) for appropriate candidates. The hiring lawyer makes the final choice. Most law firm placements are litigation-related (depositions, legal research/writing, and other pre-trial preparation); corporate work is usually run-of-the-mill aspects of major transactions – due diligence review, drafting purchase agreements, routine counsel within the corporation.

In recent years, law graduates and new admittees have found more agency assignments involving project-management, and the review, analysis, and coding of documents in complex lawsuits.

To receive payment, the solo submits time-records approved by the hiring lawyer. Some agencies pay solos as independent contractors, others pay them as employees (note: solos paid as independent contractors often must wait to get their money until the agency is paid by the hiring lawyer). Agencies charge $40 to $125/hour to the hiring lawyer, and pay you $30 to $50/hour or occasionally as much as $70-$100/hour for a unique expertise or foreign language skill.

Direct sources of contract work – Whether you’re a new admittee, an experienced lawyer, or a specialist, define your market and the nature of your offer. Contract lawyers often make the mistake of not specifying what they bring to the table, assuming they’ll attract more business if they say they can handle any problem. But if your offer is unclear, you won’t be able to convince other lawyers to pay for your services. Narrow your focus and you broaden your appeal. It may go against logic, but this advice is proven time and again.

The classifieds – Ads for contract positions can be found in your law school alumni office, the back pages of the local bar journal, and online at Craigslist. Because Craigslist doesn’t charge for ads (or just a modest amount in some cities), it attracts all types of classifieds, including those from attorneys who could not afford to involve a placement agency. Sift carefully through the postings; there are many interesting opportunities, some of which don’t pay very well. Also, when you deal with an attorney through Craigslist, you should … at a minimum … visit the lawyer’s Web site and check their disciplinary record. Note: even where an ad is seeking a full-time attorney, consider submitting a resume and offering your services part time where the position involves a unique, hard-to-find expertise.

Networking — The most efficient way to find contract work from other attorneys is by networking (either in person or by participating in online listservs), and cold-calling.

Below are some Do’s and Don’ts when networking for contract work:

DO tell lawyers that you’re looking for contract work: It sounds obvious, but when you meet other lawyers, be explicit about your willingness to perform contract work. Many attorneys just starting out will tell other lawyers all about their practice expertise and that they are looking for referrals. But often they don’t take the next step … demonstrating their willingness to help with overflow work on a contract basis. I guess they figure it makes them look desperate for work. Trouble is, most attorneys assume that new solos would be insulted by an offer of contract work at lower rates, so even if they have a need to outsource, they won’t mention it. Remember: if you want contract work, you have to ask for it.

DO suggest ways you might help. Some lawyers have never considered using contract attorneys, assuming that they are only suitable for major document-review assignments or brief writing. Be creative: suggest ways that you might help another lawyer, such as ghostwriting an article, writing blog entries, or attending meetings, standing in at status hearings, or defending depositions where the lawyer’s presence is not required.

DON’Toversell yourself. If you’re looking to perform contract work, don’t oversell your skills. In the long run, it’s counter-productive. Most lawyers are very, very busy (which is why they need help to begin with), and they don’t have time or budget to provide on-the-job training. They want someone who can come on board and assume responsibility for a matter. So, if you do accept an assignment to draft a motion, be prepared to deliver a good product, or to figure out how to draft it on your own … off the clock. If you perform poorly, not only won’t you get the lawyer’s repeat business but they’re unlikely to refer you business either. In short, even if you really, really need the money, don’t accept a contract assignment unless you’re confident you can make a good impression.

DON’T send mass mailings. You may think that reaching out to every attorney in your local bar association increases your chances of finding contract work. In truth, mass communications – electronic or paper – usually wind up deleted or recycled. Frankly, five targeted calls to attorneys you know – or even cold calls – will give you better results than mass mailings. You make a far better impression when attorneys see that you’ve taken the initiative to call them by phone.

DO make it easy for lawyers to hire you. You increase your chances of getting contract work by having both electronic and hard copies of an updated resume – and your best writing samples (one short, one long) – ready to send. If you’re marketing to local attorneys, offer to stop by their office if they wish to meet. And draft a basic retainer agreement for contract services so they don’t have to take the time to create their own. Make it easy for them to hire you.

D0 take precautions to ensure that you get paid. Many contract lawyers mistakenly believe that they needn’t worry about getting paid because they’re dealing with attorneys. Unfortunately, some attorneys may try to squirm out of paying contract attorneys, particularly when they’re unable to recover the cost from their clients. When providing contract services to attorneys, prepare a contract that memorializes the terms of your arrangement. Your agreement should make clear that your payment is not contingent upon the attorney collecting payment from his client, and also that the attorney must pay upon completion of your work, not when he collects from the client. As a contract attorney, you have no control over selection of the client, nor are you paid enough to assume the risk of non-collection. So if an attorney balks at these terms, your course is clear: turn down the assignment.

– For a complete discussion on rate-setting strategies, see The Complete Guide to Contract Lawyering (3rd edition, Deborah Arron).