For Love or Money: The Challenge of Doing Good While Doing Well by Spencer Aronfeld
October 1, 2002
Story: Spencer Aronfeld
Law office budgeting is as much an art as it is a science. I could spend endless hours scouring catalogs for the cheapest paper clips, insurance, and parking decals. I could drive myself insane—deep-freezing my dreams of being a unique, creative trial lawyer—studying the endless financial reports my accounting software generates.
Being a successful trial lawyer today requires being part businessman, part showman, and part artist. The demands of each requirement can destroy those of another and send you searching for a different way to make a living. I do not run my office like a business most of the time, and most of the time I suffer the consequences.
Many would agree: The greatest trial lawyers are not always the most profitable, and the most profitable are not always the best. But there are hundreds of lawyers who have found the balance between being great lawyers and running businesses.
The art of law office economics starts with deciding what kind of lawyer you are and what kind you want to be—great, profitable, or a little bit of both.
The great trial lawyer
Great trial lawyers often take cases that make little or no financial sense. They look for cases in which a significant wrong needs to be righted. No one should go bankrupt or put his or her family on the street for any case. Yet profit should not be the compelling reason for being, should you want to be, a great trial lawyer.
The great trial lawyer must take financial risks. Often, a case’s costs escalate out of control and beyond the value of the case. You will know this is happening when your stomach cramps every time you think about the case. This is when the profit-seeking lawyer inside us all starts to claw at our souls, making us question the case, the client, the experts, the expenses. If we give in to this fear, we compromise the case, first with our enthusiasm, then with our wallet. If we make it to a jury trial, we look at the jurors with a nervous face that does little to help our client win.
You can fight the fear in various ways. One is simply to embrace it. Admit to your self that you are afraid of losing the case.
I am in
a constant debate
between my desires
to be a great lawyer
and a profitable one.
(and your time and money) and that the case has gotten away from you financially. Then bite down hard and keep going.
There are other, less painful, options, but if you choose them, your ego and spirit may both take a hit. Bring in cocounsel (depending on your state’s rules) who will take on some costs. Or refer the case out entirely. You can also consider settling the case and reducing or waiving your fee to recoup your costs. Finally, you can withdraw from the case.
Lawyers often suffer through making these choices. That is why it is essential to have mentors who can counsel you in weighing the options. Choose your mentor care fully. If you are a sole practitioner, seek advice from someone whose practice is like yours, or like the one you want, in size and scope. A salaried partner in a large firm, who does not shoulder all the risks of the firm’s cases, may not give you the same advice as one who carries his or her entire load. A “famed” trial lawyer may be out of touch with the reality of becoming overextended on a single case while trying to build a reputation.
The profitable lawyer
Profitable lawyers usually take minimal risks, accepting only those cases they can win or settle easily. These lawyers generally know the cost of everything in their office and run it like a big corporation. They know where and when to check their egos, and they have a “take the money and run” attitude. They generally have nothing to prove to anyone but themselves and their accountants, so they spend enormous amounts of energy finding the best deals, leases, and staff. They run their firms in an organized and disciplined fashion.
Therefore, profitable lawyers should refer out as much as possible to keep costs and staffing to a minimum. They should weigh the risks of time, money, and stress of any potential case very carefully. They should make rational, deliberative decisions regarding their practices. They should accept no case with a value less than the minimum they set, and they should not exceed the maximum caseload they establish, so that staffing and space stay within budget. Therefore, they should calculate the cost per employee (salary, overhead, and so on) against potential income.
I envy the lawyer who can make “strictly business” decisions. I wish I could find an easy way to turn down clients who have “hard to prove” or “small damage” cases. I would like to be able to think more often with my head rather than my heart.
Most of the heart-wrenching decisions I have made “for profit” were shortsighted. There are cases I wish that I had not settled because of the economics. I often think that if I had gone the distance, and my client had approved, I might have been able to accomplish more for my client and myself.
Each of us has to decide, by searching his or her soul, that either I am going to try to be the best trial lawyer I can be, and money will not stop me from achieving that ideal ”or” I am here to make the best living I can. And while I am not going to do anything unethical or harm my clients, I am not going to take any personal risks beyond what I can tolerate in order to practice law.”
I am in a constant debate between my desires to be a great lawyer and a profitable one. I struggle, in my heart and in my head, to decide how to proceed with each case. My ego and my wallet are at war, and often they both lose. Yet without an ego—a strong, undying motivation to win cases— no one can be a great lawyer.
How you learn to balance your practice and your life will determine whether you will be a great lawyer, a profitable lawyer, or, perhaps, a little bit of both.