A recording of the October 2017 ABA CLE webinar, “The Path to Lawyer Well-Being: Practical Recommendations for Positive Change,” is now available to view, free of charge. The webinar featured the report of the same name issued by the National Task Force on Lawyer Well-Being which presents a series of recommendations directed at a variety of […]
The new OSB 2017 Economic Survey is available for download. In it, you’ll find a plethora of information about Oregon lawyers, including employment characteristics, compensation, billing practices, career satisfaction, and future plans. Here are a few highlights:
- 28.3% of survey respondents reported being a member of at least one other state bar.
- 86.1% reported working as an Oregon lawyer; 13.9% were not.
- Lawyers who chose to work part-time did so to maintain work/family balance, pursue other career interests, or because they were semi-retired.
- Slightly more than 60% of working Oregon lawyers reported being in private practice, with just under 20% in government positions.
- The most dominant areas of private practice are business/corporate (transactional and litigation), civil litigation (plaintiff and defense), tax/estate planning, family law, and real estate/land use/environmental.
- The most common practice size was a 1 lawyer office, followed by 3-6 lawyer offices, and 7-20 lawyer offices.
- The statewide mean compensation was $143,277.
- The amount of compensation was highest in the Portland metro area and lowest on the Oregon coast.
- The highest paying area of practice was real estate/land use/environmental.
- Statewide, female lawyers reported earning less than male lawyers.
- Peak earning years were 50-59, with compensation generally decreasing after age 60.
- Statewide, the mean hourly rate was $286, ranging from $226 to $324 regionally. (The highest reported hourly rate was $850 in Portland.)
- By area of practice, the highest hourly rate was for business/corporate – litigation, with a mean of $333. Other top billing areas were: real estate/land use/environmental, civil litigation – defendant (excluding insurance defense), and business/corporate – transactional.
- On a scale of 1-5, with 1 being very dissatisfied and 5 being very satisfied, lawyers statewide had a mean career satisfaction rate of 3.98. In general, the more years in practice, the greater a lawyer’s satisfaction with his/her career.
- By location, employment, and area of practice, the most satisfied lawyers were:
- In the Upper Willamette Valley
- Working as judges or hearing officers
- Practicing in civil litigation defense, real estate/land use/environmental, or criminal law (private bar).
- 19.2% of lawyers statewide reported they were planning or contemplating retirement.
- 6.7% were planning to leave the profession, but not retire.
- Another 10.3% were planning to reduce their practices.
All Rights Reserved 2018 Beverly Michaelis
Getting your “side hustle” on is Uber’s way of suggesting that you join their team to earn extra money. Lawyers sometimes face this dilemma when first transitioning into private practice – giving up a regular paycheck is a high price to pay in exchange for the uncertainty of going solo.
For other lawyers, the practice of law is a second career. Does this mean they are required to relinquish their first?
Not necessarily. However, practicing on the side or in addition to another career, does raise some red flags.
Conflicts of Interest
Assuming your employer agrees to let you “moonlight” (and that’s a big assumption), you must address potential conflicts. At first blush, you might think this concern applies only to lawyers who currently work in a law firm and wish to “work on the side” in a solo practice. Not true! If your other job is working as a real estate broker, mortgage broker, financial planner, psychologist, mediator, arbitrator, etc., you must also screen for conflicts.
In her article, Multidisciplinary practice: When Wearing Two Hats May Get You Burned Helen Hierschbiel points out:
Recognizing and avoiding conflicts of interest is one of the more common concerns for lawyers who have side businesses, particularly when their clients do business with those other companies. Oregon RPC 1.7(a)(2) provides that a current conflict of interest exists if “there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer…” Thus, when there is a significant risk that a lawyer’s personal or other financial interests in a non-legal business will materially limit the lawyer’s responsibilities to a client, that lawyer has a conflict under RPC 1.7(a)(2).
In addition, when a lawyer’s side business is doing business with the lawyer’s client, consideration must be given to the limitations set forth in RPC 1.8(a), which provides more stringent requirements for obtaining client consent than those under RPC 1.7(b). RPC 1.8(a) provides:
A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:
1. The transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
2. The client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and
3. The client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.
Note: Learn more about this issue and other common conflict traps by attending Limiting Exposure to Conflicts on October 25, 2017.
Other Ethical Concerns
A “side practice” coupled with another job also raises potential concerns about advertising, solicitation, and fee sharing. Here are Helen’s comments:
“Oregon RPC 7.1 generally provides that any communication about a lawyer may not be false or misleading. Determining whether a statement is false may be simple, but assessing whether it is misleading can be more difficult. The cautious approach in making that assessment requires considering how the statement is likely to be interpreted by an unsophisticated consumer. Thus, OSB Formal Op 2005-108 concludes that a lawyer who has an active mediation practice may advertise the practice under “counselors — marriage, family, child and individual” sections of the yellow pages as long as the advertisement reflects the lawyer’s status as a lawyer offering mediation services.”
“Lawyers should also take care to observe the ban on in-person solicitation of legal business when providing non-legal services. The non-legal business may not be used to solicit clients with legal needs in a manner that violates RPC 7.3… (L)awyers would be wise to exercise extra caution when confronted in their non-legal business with an individual who has legal needs as well.”
“… (L)awyers should be mindful when setting up an ancillary business, not to allow non-lawyers any control or influence over their law practice.”
Employment Law and Liability Implications
Before you set up a side practice, check your employer’s policy and personnel manuals. Some employers prohibit moonlighting altogether, others require preapproval of “outside employment activities.” If you are a contract lawyer and a true independent contractor you should be completely free to have your own solo practice and perform contract work for other lawyers. Be sure the principal lawyers who hire you agree. Contact the OSB Professional Liability Fund for more information on setting up a contract practice.
Query: If a lawyer commits malpractice in the course and scope of his or her “side practice,” could the lawyer’s primary law firm employer be held vicariously liable? (Food for thought…. as clients have attempted to hold firms responsible for the negligence of “sole practitioners” who were leasing space in the firm’s office suite.)
Professional Liability Coverage
Lawyers engaged in the private practice of law in the State of Oregon are required to carry professional liability coverage through the Oregon State Bar Professional Liability Fund. This requirement applies equally to full-time and part-time practitioners. In other words, if you are a lawyer in private practice in Oregon (as defined in the PLF plan), it does not matter whether you provide legal services 50 hours per week or 10 hours per week – coverage is required in either case – and the cost of coverage does not vary based on the hours worked. With that said, liability coverage in Oregon is complex. Your best bet is to contact the Professional Liability Fund for more information.
Is it Worth it?
It may not be. If you are not an active member of the Oregon State Bar, it will be necessary to pay bar dues. If you intend to engage in the private practice of law and require professional liability coverage, the cost is currently $3500 per year (assuming coverage is not prorated and no discounts apply).
To assess whether a “side practice” makes sense, go through all the steps you would normally follow to set up a full-time law practice. This includes forming an entity (or not), naming your business, choosing a space option, developing a business plan and budget, opening appropriate bank accounts, consulting with a CPA, creating (and implementing) a marketing plan, and establishing office systems. If it sounds like your proposed “side practice” is getting more complicated by the minute, it is. Don’t assume setting up a “side practice” is any less work than committing to the full-time private practice of law.
Last week’s guest post examined profitability of lawyer marketing ventures by using a cost-per-case analysis:
Total dollars spent
New clients signed on because of the marketing effort
Another piece of the puzzle is understanding what market research tells us about our potential clientele. But where can we find this information? Data about demographics, employment, supply, and demand can hard to find – especially in one convenient location. But thanks to the hard work of Annette Shelton-Tiderman we have a resource!
In her post, Problem Solvers: Offices of Oregon Lawyers, Annette reports on the following topics:
- Offices of Lawyers Reflect Oregon’s Diverse Population and Geography
- Supply and Demand: Employment Reflects Changes in the Economy
- Marshalling Problem-Solving Resources
- Projected Demand Shows Change and Overall Growth
She includes interesting infographics on the statewide marketplace for legal services, employment growth rates, employment projections, and breakdowns on areas of practice. Because the report relies in part on the bar’s 2012 Economic Survey, the data is a bit aged, but still helpful.
I first shared this resource three years ago. Unfortunately, it was relocated on the Employment Department website. It took some time to dig back up again, thus the repost. If you’re looking for other ideas on market and economic analysis, read on.
More Resources for Market and Economic Analysis
Lawyer billing practices
- OSB 2012 Economic Survey – includes billing data sorted by area of practice and region of the state.
Lawyer Demographics – County, Population, Age Group, and Trends
- OSB 2012 Economic Survey – the main survey includes data on the future plans of survey participants (leaving the practice of law or retiring). The Addendum has additional demographic data.
- Learning the Ropes 2016 Program Materials from the Professional Liability Fund. Locate page 264, “PLF Covered Lawyers — by County, Population and Age Group.” From the PLF home page, Select CLE > Past CLE and find “Learning the Ropes 2016” in the alphabetical list of Programs. Click the program link. On the description page, locate QUICK LINKS (top right of screen). Select the PROGRAM MATERIALS link.
- Are you a member of the OSB Lawyer Referral Service (LRS)? They gather data on supply and demand for all their programs.
Market Research Databases
- Advisors at the Oregon Small Business Development Center can help you access up to eight market research databases to aid with market analysis in establishing, growing, or relocating a business (including a law practice).
- Short-term and long-term data is available through the State of Oregon.
- General employment data is also publicly accessible.
Occupational data and job listings (including Lawyers)
- The State of Oregon provides data and occupation profiles on all occupations, including lawyers and legal staff, at this link. You can also display statewide job listings. Alternatively, start at this location, then select the “Wage Data Tool” in second column under Workforce. To give you a better idea of how this tool works, here is a snapshot from a recent search:
As you can see, it is possible to print a full report, custom report, or summary. If you want to find career pathways, wage range data, or occupations with similar skills just be sure the appropriate boxes are checked.
The Oregon Employment Department’s Web site is a helpful resource for businesses researching economic data, business indicators, and other information. There are 13 workforce analysts spread across the state who are responsible for assisting businesses with needed labor market information. This can include the demographics of a neighborhood – very helpful when a business is looking to relocate or expand. The Employment Department also tracks education levels, income, population data, and maintains a database for occupational and wage-related information that is easily accessed via its website. Services provided by workforce analysts are paid for by business taxes. There is no additional cost to access their expertise.
All Rights Reserved Beverly Michaelis 2017
Last week I made an impassioned plea encouraging you to create a business plan. A big part of the planning process involves selecting an area (or areas) of practice. Sounds easy enough, but is it?
Don’t Choose a Practice Area Because…
Someone else said you’d be good at it, a law professor recommended it, everyone else is doing it, or family members and other influencers practice in the area.
Think About the Kind of Clients You Want to Represent
This step is often overlooked, but deserves your consideration. Take time to reflect on who you want to serve, rather than what you want to do.
- Do you want to represent businesses or individuals?
- Start-ups, small family operations, or evolving companies who might need help with mergers and acquisitions?
- Low income or high income? Elderly? Young? Vulnerable?
Consider Client Characteristics
While it is possible for any client to display these characteristics, they do appear more frequently in certain areas of law:
- Emotional (angry, fearful, crying, upset) – Family law, criminal law
- Impaired or mentally ill – Family law, juvenile law, criminal law, poverty law
- Distressed – Family law, criminal law, poverty law, personal injury, workers’ compensation, social security disability, products liability
- Confused – Elder law, estate planning, probate, poverty law
- Vulnerable – Elder law, juvenile law, family law, criminal law, poverty law
- Demanding – business law, corporate, real estate, intellectual property
Do You Naturally Lean Toward Litigation or Transactional Work?
If you like ever-changing clients, taking risk, working under pressure, and constant challenge > you may be better-suited to litigation.
If you prefer working with repeat clients, minimizing risk, a steady workflow, and predictability > you may be better-suited to transactional work.
Let’s Play Match Game
What is your tolerance level for working longer hours? Dealing with gray areas of law, high stakes, or deadlines? These can also influence a practice choice.
Long Work Days
Working longer hours is often associated with family law and criminal law where emergencies occur in the evenings and on weekends.
Gray or Concrete?
If you don’t mind dealing in gray areas, family law, litigation, trusts, estate planning or immigration may be good choices. If you prefer things to be more concrete, then consider regulatory law, tax law, or administrative law.
The stakes are higher in criminal law, immigration, and family law. You will need a reservoir of resilience to practice in these areas.
Arguably, this is just about every area of law but litigation reigns supreme when it comes to deadlines. If you are organized, manage workflows well, and have good time management skills you’ll do well in litigation.
I should also forewarn you that any area of law where your fee is contingent, like personal injury, means an unpredictable pay day. Honestly assess whether this is something you can handle financially.
The Informational Interview is King and Queen
Doing informational interviews with other practitioners in an area of law that interests you is – without a doubt – one of the best ways to narrow down your list. Not sure who to approach?
- Ask for referrals or suggestions from your first level contacts – people you know personally.
- If your first level contacts don’t know anyone in the area(s) of law that interest you, ask them for names of other lawyers who might know a practitioner in that area. Keep asking and pursuing leads.
- If you don’t know anyone who knows anyone who might know someone who practices in an area that interests you, start reaching out to known experts. Bar groups – state, local, and specialized – are organized into sections and committees, usually by different areas of law or subspecialties of law. Who are the leaders of those sections and committees? Who speaks at CLEs for the various bar-related groups? Who writes articles in bar group publications? Who writes chapters for OSB BarBooks?
A Formula For Cold Calling
There is an art to cold calling. (And by the way, a call is generally better.) Here are the steps:
- Do your homework first. Visit the interviewee’s website. Look her up on LinkedIn or other social media sites. Run a Google search. Read what she’s written.
- Review steps three through six below. If you find cold calling intimidating, rehearse a few times before you pick up the phone. This will be helpful if you end up leaving a voicemail. Better to spend time practicing beforehand than to fumble and mumble in your recorded message.
- When you reach out, be clear from the beginning that you are not seeking a job and this is not a request for a job interview. Rather, you are interested in the area of law the interviewee practices and would like to learn more.
- Briefly explain why you are reaching out to this particular interviewee. For example, you read her article in the Bar Bulletin, noticed she spoke at at CLE, saw that she wrote the chapter on XYZ for BarBooks, etc. (To state the obvious, this is where the homework comes in.)
- Be respectful of the interviewee’s time. Spending 60 minutes with your subject would be optimal, but may not be possible. Let the interviewee know that you are looking for 30 to 60 minutes of their time and stick to whatever time limit you agree upon.
- Consider extending a breakfast or lunch invitation. Everyone has to eat.
- Prepare for your informational interview. If necessary, repeat step one in greater depth. You should come to the meeting with a list of questions you would like the interviewee to answer. In fact, you may want to have some questions written down before you even pick up the phone and extend the invitation.
- Send a handwritten thank you note by postal mail after your meeting.
If you encounter a gatekeeper – receptionist, paralegal, assistant, secretary – bend over backwards to be polite, thank them for their time, and do your best to leave a complete, but brief message. Make sure the gatekeeper understands you aren’t cold-calling for a job interview.
You might wonder: why can’t I just shoot off an email? You could. And it may work. But remember: your interviewee is busy and already buried in email. Your message may not get read or may get caught in the spam filter.
Experience shows that calling and following up by mail is more effective. Both are more personal than email and require more effort – which doesn’t go unnoticed. Calling means the staff person or lawyer to whom you speak can hear your tone of voice. Your gratitude and appreciation come across in a way that email can’t match.
All Rights Reserved Beverly Michaelis 2017
What should you do if you leave a message and don’t hear back? Don’t be discouraged. The majority of people you reach out to will be gracious and understanding. Move on to someone else in the same practice area.