By Bryan E. Comer
Starting a new firm, despite the area of practice, can be a daunting challenge. When I left a firm and decided to open my own practice in 2010 (before eventually teaming up with my current senior partner), I knew practically nothing about how to open or run a law office. Malpractice insurance, lines of credit, payroll–I had no idea where to start. This article is not intended to discuss whether you should open a plaintiff’s litigation practice. The article is intended for those who have already decided and will address various aspects of how to run a plaintiff’s litigation practice, from the business of the practice to ideas to consider regarding how you handle cases.
The Business of the Plaintiff’s Litigation Practice
Determine the Form of the Business
The first step to take in opening a practice is to decide what the practice will look like. Are you going to hang a shingle as a solo practitioner, or are you going to partner with one or more other lawyers? No matter if you are a solo practitioner or are starting a firm with colleagues, you need to make sure the business is properly set up with business licenses, corporate filings, and malpractice insurance, and of course, update your contact information with the Alabama State Bar.
I am a firm believer in hiring qualified experts and relying on each expert’s advice in areas with which I am unfamiliar. To that end, it is important to talk with a business lawyer or CPA to discuss the corporate form your business will take. Determine whether it is best for your business to be an LLC, a partnership, or a corporation, or take some other form. Once you decide what shape your business will take, you must file paperwork with the Alabama Secretary of State to create it. After the business is officially formed, it is imperative to maintain the corporate form for your business. An established CPA or business lawyer can educate you on the requirements to maintain the corporate form so that you are insulated from liability stemming from the business (such as properly capitalizing the business and not using the business accounts as a personal “piggy bank”).
Keep Operating Costs as Low as Possible
One of the biggest mistakes many plaintiff’s lawyers make is monthly overhead that is too high. This is especially true for lawyers who come from larger firms who are accustomed to conveniences such as Westlaw subscriptions, a full allotment of support staff, and every book in the West repertoire. While some of those items may be necessary when you begin your practice, it is important to prioritize what you really need. Remember that every dollar you spend in overhead is a dollar for which you must account and a dollar that comes out of your pocket. It should always remain in the front of your mind that your office is a business, and it must be profitable so that it, and you, survive.
There are many resources available to help you obtain necessary items affordably or even for free. The Alabama State Bar offers “Fastcase,” an Internet-based legal research platform that is free to all members. For a full list of available benefits for Alabama State Bar members, go to https://www.alabar.org/members/benefits/. If you have access to a law library, which can be found in most courthouses, many have free Westlaw access in addition to up-to-date reporters and digests.
There are also many hidden costs to running your own practice with which you may not be familiar, especially if you are moving from a large firm where an office manager or managing partner handled items such as business privilege taxes, business licenses, malpractice premiums, and renewal of your license fee. These are a few examples of the recurring costs you will incur, and it is good for budgeting purposes to know what they are and when they are due.
As the business generates income, you need to keep an eye on your tax liability. How you set up your business (LLC, corporation, etc.) will determine how you pay taxes. Many lawyers pay estimated quarterly taxes which are determined by the firm’s income–not necessarily how much money you actually put in your pocket. Thus, it is important to factor in taxes when making decisions about spending the income you generate. A good practice to get into from the beginning is taking a certain percentage of income and sticking it into an account (and not touching it) so that it is available when your taxes are due.
Maintain Separate Accounts and Balance Them Regularly
You will need to open several accounts in a plaintiff’s litigation practice, none more important, or regulated, than your IOLTA account. When you receive funds for a client or funds for yourself and a client which have not yet been divided, they must first go into the trust account where they will remain until you are ready to disburse. You absolutely cannot co-mingle client funds with personal or firm funds, and you should never bounce a trust check. If you do bounce a check, the bank must report you to the Office of General Counsel.
In addition to a trust account, you will also need an operating account to pay day-to-day office expenses (such as rent, the phone bill, malpractice insurance premiums, and equipment). It can also be a good idea to maintain a client cost account to pay for expenses advanced during a case (such as filing fees, deposition transcripts, and expert retainers) if you are not already holding funds in trust to cover these costs. Maintain the accounts separately, and keep them adequately funded. Make sure you track your expenses, whether they are operating expenses or client costs, and routinely balance your accounts. If you do not want or cannot afford an in-house or part-time bookkeeper, QuickBooks is user-friendly, can generate reports, and will help you track expenses.
The Practice of the Plaintiff’s Litigation Practice
Do Your Homework Before You Take a Case
Research the issues in each case before you take the case or at least before you file suit. It is important to know what the requirements are for certain cases, such as pleading fraud with particularity, or knowing that only the duly appointed personal representative has standing to bring a wrongful death case on behalf of a decedent’s estate, before you are staring down a dispositive motion. Many issues must be thought through before filing a complaint: where is venue proper; is the case removable; does your plaintiff have standing? For instance, if you have a car wreck case involving parties from multiple counties, venue may be proper in more than one county, but if you file suit in a technically proper, but remote, venue, you may face a motion to transfer to another venue under the doctrine of forum non conveniens. I always try to find the answers to issues such as these before filing suit so I can avoid unnecessary motion practice.
It is also important to determine the statute of limitations for a case as soon as it comes in the door. Most cases will fall into the negligence/wantonness or breach of contract realms, with two-year and six-year statutes of limitations, respectively. However, there are other deadlines that are just as critical as a statute of limitations. Is the case against a municipality? If so, remember that a proof of claim must be filed within six months of injury (one year if the claim is against a county). Is the case against the federal government? If so, research the requirements of the Federal Tort Claims Act, and make sure you follow them to the letter. If you are close to a statute of limitations, make sure you do your due diligence to ensure you have the proper defendants named or, if you do not know the identities of one or more defendants after an exhaustive search, that you list the fictitious parties sufficiently to relate back to your original filing.
At the beginning of a case, always look at the jury charges for the causes of action you are asserting and put the pertinent ones at the beginning of the file. Then, every time you pick up the file, you will see what you must prove, which helps direct you in what to do in the case. By knowing what you must prove at the beginning of the case, you can then work toward meeting your elements as you move purposefully through discovery. You don’t want to find out you missed something when you read about it in your opponent’s motion for summary judgment.
Keep a Case List and Constantly Review It
Every new case that comes in the door needs to be immediately placed on a case list. My case list is kept on a spreadsheet and includes the style of the case, where it is pending, the statute of limitations, and whether suit has been filed. Maintain the list in real time, and look at it every day. Use it to prioritize your day and plan your weeks ahead. Additionally, maintain a paper calendar that is kept up to date in real time. While two calendars may seem redundant, the redundancy is in place to make sure nothing falls through the cracks.
Know When to Say No
A friend who is a seasoned trial lawyer once offered good advice: You are much better off spending time with your family or doing a leisure activity you enjoy than working hard on a terrible case. Early on there may be a fear that you will not have any cases so you will feel the urge to take anything that comes in the door. While that may be a good strategy if it is an hourly case that will generate income, if you are taking cases on a contingency fee (which is the vast majority of the cases in plaintiff’s litigation), you cannot afford to waste time on bad cases. You will lose the money and the time you spend on them, which is time you could devote to better cases or to maintain your sanity. It is also worth noting that there is a difference between a small case and a terrible case. Small cases will keep your practice moving forward by generating even modest income, while bad cases will consume your time and resources with no hope of success. You will typically know the bad cases when you see them.
If you are opening a solo practice, especially if you are just starting to practice law, do not take complex cases in an area of practice with which you have no experience. Defective product cases, medical malpractice cases, and class actions are intellectually challenging and usually interesting cases on which to work. However, those cases are usually extremely expensive, time-consuming, fraught with pitfalls that can sink your case (not to mention you run the risk of violating Rule 1.1, Ala. R. Prof. Resp.), and require detailed knowledge of the subject matter.
This is not to say you cannot work on difficult, complicated, or expensive cases. Often, lawyers who leave an established practice with years of experience and financial flexibility will open boutique firms specializing in class actions or defective product cases. However, if you have never tried a jury trial, you certainly do not want to take a complicated medical malpractice case against a local surgeon or sue a Fortune 500 company for a product defect, at least not by yourself. Your client is better served if you refer those cases to more experienced lawyers, or at the very least, associate a lawyer who specializes in that area of law. Referring the case or associating counsel will serve multiple purposes: you will greatly improve the work done for the client, you will increase the likelihood of a successful result, you will learn from the case (if you associate another lawyer), and you will establish a relationship with a lawyer that you may have for decades.
Be at the Office and Push Your Cases
There is no substitute for being in the office. If you work from home, set office hours and keep them. If you have an office, go there and stay there all day. Establish a routine and keep it. You will never know when the phone will ring with a new case or a new client will walk in the door. If you are at the office you are going to get more work done. As a plaintiff’s lawyer, you must be proactive, and each day must be spent urgently pushing the cases to trial. There is no substitute or shortcut for putting in the time necessary to get your cases ready for trial. There is also no better investment you can make than to invest time in your cases.
Move urgently and with a sense of purpose from the moment the case comes in the door. If you cannot resolve the case pre-suit, then do your due diligence and file suit. If the case is pending in state court, I try to serve discovery requests with each complaint to start moving the case from the outset. Obtain the written discovery you need so that you can start taking depositions. Make sure deposition transcripts are delivered in a timely way, and read them as soon as they come in. While you read the transcripts, plan your next moves–perhaps you need to request more documents or perhaps you discover an issue that needs further deposition testimony before you can disclose an expert and announce ready for trial. Get trial settings as soon as you can and keep them. Get your case ready, and it will send a message to the other side, especially the insurance adjuster on the file, that you handle your business and have no qualms about trying a case. You will improve the value of your case, usually resolve your cases more favorably (or if you cannot resolve the case, it is ready for resolution at trial), and earn respect from your opposing counsel and the judges.
There is also no substitute for trying cases. Before one of my first jury trials, a judge in Mobile told me that trying a case is like riding a bicycle: You can read all the books in the world about how to ride a bicycle and how you need to peddle fast enough while maintaining your balance. But until you sit in the seat and inevitably fall a few times, you will not really know how to ride a bike. The same is true for trying cases. There is no book or CLE program that will prepare you for trial like sitting at counsel’s table and “skinning your knee.” You and your clients, current and future, will be better served if you try cases. You will become a better litigator. Other people will see you in court, which will lead to more cases. Your opposing counsel, and their clients, will learn that you are not a lawyer who will settle a case because you are afraid to try a case. That, in turn, will lead to more favorable resolution of your cases. Plus, trials are the fun part of a litigation practice.
Do a Good Job for Your Clients
No matter the size of your case, do a good job on it. It seems too simple to be included in this article, but it is true and worth stating. Many times, you are the only lawyer your client has ever met, and you are the person the client has trusted with his or her case. If you do a good job for your client, the client will remember it. While there are usually not many repeat clients in a plaintiff’s litigation practice, the clients you have will inevitably have family members and friends or know people in the community who will need a lawyer one day. Additionally, a substantial number of cases come from other lawyers, and other lawyers know who puts in the work necessary to obtain a successful result for the client. If you do a good job on a case, whether it is a large case or a small one, it can, and often will, lead to more cases.
Develop a Marketing Strategy
The lifeblood of any plaintiff’s litigation practice is cases. You should spend a good portion of your time thinking about how to get new cases in the door. There is no magic formula for this, and, unfortunately, it is an extremely competitive market. Advertising can be extremely expensive, so I recommend looking at other ways you can attract business.
The most tried and true method is the example you set. Be visible in the courtroom (not for the wrong reasons), and people will send cases your way. I would caution against hiring one of the many companies that will inundate your inbox promising so many cases per week or month. Typically, those companies require a substantial fee and rarely deliver on the promises they make of bringing in quality cases. Do establish brand identity and a good website. Focus your messaging on who you are and what you do. Whatever marketing plan you choose, constantly review the data from the plan to see if it needs modifying, and stay with what works.
Join With Other Lawyers
Finally, I strongly encourage you to join the Alabama State Bar’s Solo & Small Firm Section. The section provides resources for small firm lawyers, including a Listserv® where you can ask questions of other lawyers who may have run into similar issues that you are facing. And, feel free to contact me to discuss these items, or others, in more depth.