Technology has revolutionized the practice of law, and now as a sole practitioner you can take on exciting and interesting work which a couple of decades ago would have required a team of secretaries and assistants to “move paper”. Despite the revolution in how things are done , however, the sole practitioner must continue to adhere to key fundamental elements of the business of law that should not be overlooked.

What business are you in? Are you a specialist/advisor? Volume real estate deals? Litigation lawyer? What you intend to focus on has implications for costs of running the business. For example, if you are a business lawyer doing shareholder agreements; advising clients on legal structure; even business acquisitions, chances are with today’s technology you can do a great deal or even all of your work without a legal secretary or assistant. You can contract out clerical work and relieve yourself of the constant overhead of keeping a secretary year round. If you go for real estate transactions, you need volume in today’s competitive environment or you may find that you are very busy but not making any money. Litigation Lawyer? Probably more important than a secretary is to have a junior lawyer who can keep costs reasonable and whom you can mentor and provide strategic advice to clients.

Are you effective? What you have to sell is your time. Are you making good use of it? Are you extremely efficient and extremely busy, but just don’t seem to be making any money? Perhaps you are placing your energy in the wrong place – can’t recover all of the time you spend. You have to be sure that your actions have a positive effect on the client’s objectives. We all work with checklists, but sometimes you need to judge what items are required to be covered and consume a lot of time, and what, in this particular deal can be discounted since the costs are not justifiable.

Are you keeping up with electronic tools? Electronic applications and content have replaced the huge law libraries of the past. You no longer need to hire an employee to update volumes of binders with precedents, but simply subscribe for and receive precedents and publications from online or digital sources which you can be sure are up-to-date. If you have the patience to learn the programs, you can also use “Fast Company” or similar programs which allow you to input client information once and then incorporate and organize companies online using proprietary management software. This allows you to do the easy part quickly and efficiently and allows you to spend more time advising and helping your client properly structure their business. Many individuals think that incorporating online is all that is required to set up a business. You can add value and still manage to do so with an affordable fee to ensure that small and mid-sized companies are well served.

Are you good at relationship building? While a great deal has been made about the fact that lawyers now advertise in ways seen to be improper for the profession, the business of law requires more than constant reminders that you are available. The key is relationship building. You have to earn the trust and appreciation of clients, for your basic skills and judgment. Clients keep coming back and refer others to someone they can reason with and work with to make wise decisions. You need to meet with clients and earn their trust. If you are too busy and too frantic all the time, they will know and you will know that you are not reflecting in the way necessary to make sound judgments. In a very busy world the role of a lawyer should be to reflect and offer wisdom to clients who are driven by technology and market forces to avoid taking the time for long term strategy.

Are your fees competitive? We all hear about the $600 lawyer who “must be great to charge that much.” The fact is $300 of that $600 can be quickly eaten up in overhead if you are running a firm with high-end downtown real estate, art and support staff. There is a niche in the market (big banks, international corporations etc.) who require that, but if your client base is medium-sized businesses and you go to their offices to meet, you can take a great deal of your costs out and lower your hourly rate to a much more competitive one. Again depending on the type of law firm you operate, $300 per hour can be a very competitive number and allow you to make a good living without the headaches of large overhead.

“Recession-proof your business.” If you make most of your money from businesses which will slow down in a recession, perhaps you should study up on an area which would continue to require legal work during a recession. For example, wills and estates are always required, and insolvency work is pretty much recession-proof.

Consider the best tax plan for the business. The Professional Corporation structure has benefits for the sole practitioner. You can be an employee of your corporation; contribute to an RRSP yearly; and can leave some of your income in the corporation as retained earnings. You pay a very low corporate rate of tax currently and then you can draw funds by way of dividend in future when you retire from the practice or are winding down and not generating the same level of personal (employment) income you do at the height of your career.

Networking. In addition to relationship building with existing clients, it is important to always keep an ear to the ground for new business as one never knows when clients, regardless of their commitment to your firm, no longer require legal assistance, (or reduce the requirement after the business is on solid ground), and you all of a sudden find you have a major reduction in cash flow. It is important to keep the pipeline full and to avoid even short-term gaps in cash flow. Particularly in volume businesses, (eg. real estate), you have to keep paying support staff or let them go and worry about all the burden of re-training when the economy turns around. A good legal assistant is invaluable to some practices, and a not so good legal assistant can be devastating when you rely on their accuracy and loyalty.