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‘Legal incubator’ to induce profitability

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‘Legal incubator’ to induce profitability

Program will teach lawyers how to make a living serving the middle and the lower middle class

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Money can be made; lawyers can find work; and clients now without legal representation can be helped using available technology. The Florida Bar hopes to put together a program to show how that can be done by next June.

Meeting under the auspices of the Board of Governors’ Technology Committee, a group of legal educators, legal aid officials, voluntary bar officers, and others met October 19 at the Bar’s Fall Meeting to discuss putting together a “legal incubator” to reach that goal.

John Stewart “Our overall goal is to teach lawyers. . . how to run profitable law firms and service small businesses, individuals, and people of modest means,” Technology Committee Chair and Board of Governors member John Stewart said at the start of the meeting. “The way this program is going to work is teaching lawyers how to be profitable serving the middle class and the lower-middle class.”

The first task, he said, will be to design a curriculum for the incubator and another important link will be “to work with our Member Benefits vendors to provide a suite of technology tools that our members can afford. That will help serve those targeted constituents in a profitable way.”

“The idea we have is very basic,” said Adriana Linares, a technology consultant for the Bar. “A bottom layer of curriculum that regardless of what area of law you practice, where you practice. . . the lawyer has to have these basic skills.”

Linares, who along with other Bar officials, has toured incubator and training programs around the country, said the focus is on showing lawyers how to run profitable businesses servicing consumers who now can’t afford, or think they can’t afford, a lawyer.

The participants had a live example at the meeting.

Three years ago and fresh out of law school, Utah attorney Shantelle L. Argyle and a partner started Open Legal Services and organized it as a 501(c)(3) nonprofit law firm to provide “low bono” service for clients who make too much to qualify for legal aid and can afford to pay something for an attorney. The firm charges a sliding fee from $75 to $140 an hour – and most is at the lower end, she said.

(Under Florida Bar rules, 501(c)(3) is not an approved way for law firms to be organized in this state.)

Argyle said the success of her firm has helped spawn similar efforts in 42 other states.

The hardest part of starting, she said, was “I didn’t have any finance training, any bookkeeping training, any office management training, any marketing training. An incubator is an amazing tool to get that type of training out there.”

Her firm has six lawyers, and Argyle said they are typically paid $40,000 to $60,000 a year, with health benefits and paid vacations. If a routine legal matter they’re handling develops into something more, they are allowed to take that as a “side job,” which will earn them extra income, she said.

Aside from new lawyers, Argyle said solo practitioners are attracted to the model because it allows them to concentrate on working with clients while the firm handles the paperwork and other administrative matters. The firm relies heavily on technology to help lawyers do routine matters and track hours spent on a task (Argyle said the firm avoids flat fee work). Ninety percent of revenues go to salaries and the rest is overhead.

She also said one of the reasons the firm is successful with lower fees is that while “traditional” firms may charge a lot more, they frequently write off a significant portion of their billings as uncollectable, while her firm has a 99 percent collection rate.

“Our goal is not to compete with our pro bono brethren. Instead we build a sliding-scale fee model so that even if every client who walked in the door paid the bottom rate, we would be sustainable. It would be a very, very narrow margin,” Argyle said. “You have to want to do this work because it’s heartbreaking work. You’re working for someone who makes $9.50 an hour and has three children.”

As a benefit, it reinforces in lawyers, particularly new ones, the value of providing services to traditionally underserved clients – a trait many keep when they move on to other jobs, Argyle said, as they insist on bringing along clients they’ve served at her firm.

Zack Zuroweste Young Lawyers Division President-elect Zack Zuroweste said incubators would be valuable for new young lawyers who are now starting law firms “out of their apartments” because they have no other options.

Kimberly Sanchez, director of Community Legal Services of Mid Florida, underscored the need for services for those who don’t qualify for legal aid but can’t afford the $300 to $400 hourly rates many law firms charge.

“I have lots of clients who have lots of legal issues, who have lots of problems,” she said. “The ones I can help are very, very poor, but there are other people, tons of people in the middle, that I have to turn away.”

Sanchez said her agency gets 3,000 calls a month, which she tries to handle with 40 lawyers spread over 12 counties.

“Wouldn’t it be great if we created armies of lawyers who would do things, help that community that I can’t service, and also learn it’s important to give back and they can do well by doing good?” she said.

Among the issues discussed at the meeting were developing a curriculum of what would work for a law school, a local bar association, or even inside a large law firm as a way to train new lawyers to serve middle- and low-income clients. Participants also talked about providing technical tools and training for lawyers, some of whom are famously technology averse, that enables efficient delivery of services for those targeted consumers. A side benefit is many of the pro se litigants now in family law cases might get representation to help their cases move through the courts.

Chuck Hays, director of information technology for The Florida Bar Foundation and who moderated much of the meeting, said the goal was to develop an incubator project by next June and also educate lawyers that this particular change is not something to be feared but something to be embraced. Stewart said subgroups would be appointed to work on specific parts of the incubator project and would report when the group gets together again in January at the Bar’s Winter Meeting in Orlando.

“At that point, our goal is to come to a general agreement that we like it or we don’t like it and it will or won’t work for particular groups,” Stewart said.

“We can come up with an action plan in January; we can come up with deliverables over the following four months,” Hayes added.

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