I recently attended the American Bar Association’s Law Practice Management Section Meeting in Santa Fe, New Mexico, which focused on Living a Life in the Law. A panel discussion by attorneys Jamie Spannhake, Mark Komer, of Santa Fe, Ed Flitton, and Diane Costigan, spoke about how the firms for which they worked and as individuals they sought to achieve a life-work balance in the law. For an interesting discussion of the presentation see David Blinsky’s blog Thoughtful Legal Management. I had the honor of facilitating a follow-up small group discussion about the Economics of a Balanced Life in the Law.
My initial question was whether there is necessarily an economic impact if one seeks a balanced life (balancing one’s work with one’s personal life). It appears almost overwhelmingly obvious that this is the case. A direct example of this trade off was made by Ed Flitton, a retired partner at Holland & Hart, a Denver based firm, which seeks to help its attorneys find a balanced life by limiting the billable hour requirements of its associates to 1800, by allowing attorneys to opt into a flex-time schedule, and allowing partners to take sabbaticals. Each of these “balanced life” alternatives was acknowledged to result in an adverse economic impact. These negative impacts are almost universally anticipated when an attorney seeks to reduce their work load to obtain a balance in other areas of their life.
Here, I want to discuss the potential impact for solo and small firm attorneys (or attorneys contemplating leaving a larger firm). Obviously, there are attorneys who command such high rates that they can improve their economic well-being by simply reducing their overhead, often by leaving bigger firms, thereby improving the profit margin on the hours worked. They therefore have an ability to improve their life balance if they chose. However, most attorneys must anticipate a negative economic impact to reducing the legal work load and increasing time spent on your personal life. The good news is that if attorneys are committed to improving their balance of life there are ways to minimize the negative economic impact. The two most important methods of protecting your economic interest are both related to your law office management and marketing. First, you must concentrate on increasing the value you provide to clients so you can charge a premium fee for your services (i.e. become an expert). Second, you must increase your realization rate on billable hours. You can greatly increase realization rates by qualifying new clients, firing bad clients, requiring fee agreements, and, most importantly, requiring payment of a fair retainer that gives a realistic expectation of the cost. You should also invoice monthly and follow up with clients who fail to remit payment when it is due. Communication with your clients on issues of money is critical.
The more difficult, but probably more critical question for most attorneys is whether you are willing to change your expectations related to your “economic life style.” Most attorneys seeking a balance between work and personal time should anticipate an adverse economic impact, at least initially, to the way they live. To prepare for the economic adjustments, attorneys (and spouse/significant other) must be willing to evaluate, honestly, their goals and expectations in life. Assuming less work means less money, you must question whether are you willing to live in a less exclusive neighborhood, in a more affordable home, without the luxury SUV, or without the title of being a “big firm” attorney. The ability of attorneys to lower expectations about their economic life style is critical for most attorneys to be able to make a successful transition to a balanced life. If you believe that quality of life means a balance between your work life and your personal life, and you are willing to change your expectations about your economic life style, then you must begin the process by creating a personal budget and commit to following your personal budget. An excellent discussion of how to budget and to live within your budget can be found in a book, The Modern Rules of Personal Finance, For Professionals, by Susan Berson. This book can be found at the Mass. LOMAP lending library. Seizing control of your life by doing a frank analysis of your personal finances, your life goals, and your expectations about life style will allow you to find a balanced life in the law.
If you wish to discuss the issues raised further please contact me at Rodney@masslomap.org.