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  New Feature: Flying Solo - Edited by Mark Robertson

January 2009

Planning and time management are important tools that every lawyer needs to hone. Part of that planning process for a solo practitioner needs to be whether he or she wants to be a main street lawyer who has a general practice or to try to specialize. Gary Munneke, former chair of the Law Practice Management Section and a member of the ABA's Board of Governors, offers insights to offer on specialization in this excerpt from Flying Solo: A Survival Guide for the Solo and Small Firm Lawyer, 4th Edition.

Why Specialize?

One of the first things any sole practitioner must address is whether to specialize in a particular field of law. Historically, and especially in small-town practice, solos have felt they needed to become general practitioners. The idea of a becoming a “womb-to-tomb” lawyer—one who handles all the client’s legal needs from the moment of conception until the client’s will is probated—carries with it a certain appeal. In the past, lawyers often viewed themselves as family lawyers, and law firms often handled the legal needs of their clients over several generations. In today’s practice environment, however, a number of factors make general practice a less-than-appealing approach to solo practice.

The term “specialization” has a checkered past. Traditionally, upon being licensed to practice law, lawyers were presumed to be qualified to provide services to clients in any substantive legal field. Specialization was viewed as a form of attracting new clients, which was prohibited under ethical standards until 1977, when the U.S. Supreme Court held in Bates v. State Bar of Arizona that a blanket prohibition of lawyer advertising was unconstitutional. In 1990, the Court, in Peel v. Attorney Registration and Disciplinary Committee, held that the bar could not categorically prevent lawyers from making communications about their specialties. Currently, Rule 7.4 of the Model Rules of Professional Conduct states as follows:

A lawyer may communicate the fact that the lawyer does or does not practice in particular fields of law. . . . A lawyer shall not state or imply that a lawyer is certified as a specialist in a particular field of law, unless: (1) the lawyer has been certified as a specialist by an organization that has been approved by an appropriate state authority or that has been accredited by the American Bar Association; and (2) the name of the certifying organization is clearly identified in the communication.

Paragraph [1] of the Comments to Rule 7.4 goes on to say the following:

A lawyer is generally permitted to state that the lawyer is a “specialist,” practices a “specialty,” or “specializes in” particular fields, but such communications are subject to the “false and misleading” standard applied in Rule 7.1 to communications concerning a lawyer’s services.

However, because state versions of Model Rule 7.4 vary considerably, lawyers who intend to limit their fields of practice should consult the ethics rules in the state(s) where they are licensed, before marketing themselves as specialists.

Trends in Law Practice

  • The reality of practicing law in the United States today is that individuals and law firms cannot do everything; they must choose to handle some legal work and decline or refer other work. As society has become more diverse, the law has become more complex. As more lawyers have chosen to concentrate their practice areas, the threshold of competence has increased in many fields. As clients have grown more sophisticated, they have increasingly sought lawyers with greater expertise in the areas of the clients’ legal problems over lawyers with general legal knowledge of the law. Generalists simply cannot compete with specialists. It might be useful to examine these trends more fully.

As Society Becomes More Diverse, the Law Becomes More Complex

There is considerable anecdotal evidence that the number of practice areas has increased dramatically since World War II, as whole areas of practice—such as environmental law, computer law, historic preservation law, animal rights law, and countless other new fields—have arisen from previously unheard-of social problems. Other practice areas that were once obscure backwaters of legal practice have mushroomed; these include professional liability law, product liability law, entertainment and sports law, immigration law, and patent law. The internationalization of commercial markets has complicated even the most basic business transactions. Increased government regulation in some areas and deregulation in other areas have made the law more confusing to clients and practitioners alike. Simply in terms of pure volume, no lawyer is capable of learning or keeping up with all the constantly evolving fields of law.

As More Lawyers Choose to Concentrate, the Threshold of Competence Increases

At the same time, clients have become increasingly critical of their lawyers, second-guess their lawyers’ professional judgment, and sue their lawyers when they are not satisfied with the results of legal representation. The incidence of legal malpractice has increased, a phenomenon that is statistically demonstrable. Legal malpractice carriers are placing greater pressure on lawyers to limit the number of fields of practice in which they will take cases. Think of it this way: If Lawyer A, a general practitioner, handles one immigration case each year, she will lack the experience of Lawyer B, who limits her practice to immigration law and handles several hundred cases per year. If Lawyer A does work in twenty substantive areas over the course of a year, she will handle, at most, a few cases in each area annually—far fewer than specialists in those areas. In short, the threshold for competent practice has been elevated, both by the greater expertise of specialists and by the greater risk of liability for those lacking such expertise.

As Clients Grow More Sophisticated, They Increasingly Seek Lawyers with Greater Expertise

One of the outgrowths of lawyer advertising is that information about lawyers and the law has become more accessible since 1977. Information about legal services and the law is available not only through lawyer marketing, but also through books, software, news media, the Internet, and referral services. It is often said that lawyers’ clients, like doctors’ patients, want to control their own cases, and neither are willing to accept paternalistic treatment by professional service providers. On the one hand, legal clients might be more willing to criticize and sue their lawyers, but they are also more likely to do their homework before selecting their lawyers. Modern clients conduct research to find the best lawyers to serve their needs, and the best lawyers are often the specialists.

A corollary of this concept is that it costs less to market to a small, targeted audience than to an unfocused, general audience. The generalist has to reach the public with an offer to do legal work, whereas the specialist needs only to reach the small group of people who have problems in the area of expertise of the specialist. The experience of the magazine industry is illustrative: national general-circulation magazines such as Look, Life, and Saturday Evening Post have disappeared, while small specialty journals such as People, Popular Mechanics, and Wine Spectator have thrived. In the legal industry, lawyers who sell specialized services are much better positioned to reach their audiences than lawyers who do not.

Generalists Cannot Compete with Specialists

Specialists can assure quality by implementing substantive practice systems that utilize routine procedures for handling similar cases. Just as production lines in other industries can produce more items with fewer mistakes (cars, watches, or almost anything else), legal production lines can improve efficiency and quality as well. To be most effective, these systems require volume, so the generalist who handles one or two cases in an area each year can hardly be said to have a system. Assuming a practice system improves efficiency, the specialist can use this competitive advantage in one of three ways: to improve profitability by taking less time to do the same work as a less-efficient lawyer, where both charge the going rate; to reduce fees by undercutting the price of less-efficient competitors; or to reduce the number of hours the specialist must devote to legal work, providing more time for family and personal interests. In short, the competitive advantage offered by specialization makes it worthwhile for most lawyers to choose to limit their practice concentrations.

Should a Solo Specialize?

The question solos must ask is whether this advice applies to them. Should sole practitioners try to limit their fields of practice, or is specialization reserved for lawyers in larger organizations? Can solos generate enough business to maintain profitability if they do not take whatever legal work they can get their hands on? More specifically, can small-town solos specialize, given the limited population they are likely to serve in nonmetropolitan settings?

The answers to these questions are not simple. The general proposition that specialists make more money than generalists applies as much to solos as it does to other lawyers. So, for solos, particularly small-town solos, the critical issue is whether they can find enough legal work to pay the bills and earn a living. To assess this question, it is important to understand the relationship between price and volume.

In his classic work on law firm planning, consultant Bill Cobb describes the situation with a graph that illustrates the relationship between the amount of work available and the rates lawyers can charge for such work. The more generic the work, the more lawyers are available to handle it, and the less practitioners can charge for their services. For more specialized work, there is less available work and a smaller group of lawyers qualified to perform it, and those lawyers can charge more for their services. In theory, a lawyer who provides truly unique services that even a small number of people need would operate in a price-insensitive environment.

Applying Cobb’s principles, Lawyer A providing generic services might be able to charge $100 per hour for his services, while Lawyer B providing specialized services can charge $300 per hour for his services. It is easy to see how the specialist can earn three times as much as the generalist, but it might not be as apparent that the specialist need serve only one-third the number of clients to earn the same amount as the generalist. In this sense, the specialist in a small town does not have to generate as many clients to stay afloat, even though the number of cases available may be fewer. Given the other efficiencies of marketing and delivery, the small-town solo can effectively concentrate her practice.

Lawyers seeking to specialize may find there are more competitors for better-paying specialty work. It is axiomatic that lawyers generally seek to provide more high-end services to more high-end clients over time; no one ever says, “My goal in practice is to be a bottom-feeder who takes all the cases that no one else wants.” The trend is for lawyers to enhance their client mix over time. This means that a less-experienced lawyer first starting her practice may take cases that she would not take after her practice is established, or that legal work that is profitable when one is new to the practice may not look so good after practicing for a number of years.

Solos seeking to specialize today have many advantages that lawyers in earlier times did not. “E-lawyering,” or providing legal information and services online, is one of the most dramatic changes. From informational Web sites to referral networks to interactive services, lawyers with the technological acumen to harness the Internet are no longer limited to the geographic boundaries of the town or county where they practice. Mass media also allow lawyers to extend the reach of their communications to clients they previously could not access, allowing them to deliver services to a much broader geographical circle.

In 2002, the ABA amended Model Rule 5.5 to permit lawyers to engage in authorized multijurisdictional practice (MJP) outside the state(s) where they are licensed, provided (1) there is some relationship between the multijurisdictional work and their home state practice, (2) they do not hold themselves out as being licensed in a state where they are not, and (3) they do not establish a permanent presence in such state. Although individual states have been slow to adopt this MJP rule, most lawyers have cases that take them beyond their home jurisdictions. Specialists are well served by more liberal MJP rules, because they have greater flexibility in serving their core client base than they would in a geographically rigid system.

Solos can also participate in referral networks, both to attract clients in their areas of specialty and to refer cases they are not equipped to handle. In the latter situation, lawyers can reduce the risk of liability if they do not take cases outside their fields of expertise. A referral network allows a lawyer to maintain some relationship to the client, while avoiding undertaking legal work outside the lawyer’s knowledge base. Model Rule 1.5(e) allows lawyers who are not in the same firm to share legal fees, provided “(1) the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation; (2) the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and (3) the total fee is reasonable.” Referral networks can include bar-sponsored referral systems, commercial networks, or affiliated groups of lawyers. Lawyer affiliations can be especially appealing to solos, giving them the scope of services of a larger law firm while maintaining the autonomy and other benefits of a solo practice.

For those lawyers who still favor the concept of serving the general needs of a clientele without engaging in a true specialty practice, the thought of serving as a referral hub may be appealing. Using as an example the primary-care physician who handles patients’ basic needs but refers patients to specialists as necessary, the notion of a primary-care lawyer might work as well. Small-town lawyers and lawyers associated with a unique cultural, ethnic, or religious group, or some other affinity connection, might find a way to create a specialty in primary legal services, thereby creating a new kind of general practitioner.

Whatever solo lawyers decide to do about specializing should not be a matter of serendipity. Instead of waiting for something to happen, or for their law practices to evolve into something, solos should make reasoned and researched decisions about how to build their practices. Often lawyers become specialists by default: after handling a couple cases in some area—maybe an area the lawyer does not even like—the lawyer becomes known as “the lawyer who handles X.” The better approach is for lawyers to look at their personal skills, interests, contacts, and opportunities, and then work to build the concentrated, high-quality practices they want. This is not something that will happen overnight; but, without some kind of long-range plan, practice specialization is not likely to happen at all.

Editor's Note:
If you want to read more, you can order the book at http://tinyurl.com/yqa3bk or purchased selected chapters at http://tinyurl.com/6f5b7n. If you have questions, drop me an e-mail: mark@robertsonwilliams.com

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