In this week’s National magazine, Cynthia Kirkby discusses pioneering sole practitioners who “stake their claim on the web”.  As I recently mentioned to Rob Todd of the Law Times, the excuses lawyers have for not blogging are not that convincing anymore.

Some might say they don’t have the time.  Well, it doesn’t take more than a few minutes of the day to express some of your thoughts in a blog.  In her article, for example, one of the lawyers interviewed by Cynthia Kirkby notes how blogging once a week doesn’t require much of a time commitment.

Some lawyers might say it’s costly.  Well, in face, it’s really inexpensive and, if you have a family or friend who is somewhat tech savy, it can be pretty much done at no cost (just install word press on your website, pick a theme, and start blogging!).  The lawyers interviewed by Cynthia Kirkby noted that the cost of a blog could range from a few dollars per month at the minimal end to a few hundred for more bells and whistles.

Some lawyers might say that they’ve got nothing to blog about.  Well, they’re simply not thinking that hard.  You can blog about whatever you want.  And “No”, lawyers don’t typically offer legal advice to the masses through their blog.

Finally, some lawyers might not see the benefits of voicing their opinion through the world wide web.  Well the fact is that sharing a sampling of your knowledge to the masses is a great way to build goodwill, create new opportunities, and develop a reputation as an expert in your particular legal area.

So go on and get blogging, already!

written by admin \\ tags: bells and whistles, blog, Canada Bar Association, Cynthia Kirby, few minutes, goodwill, kirkby, lawyers, legal advice, National magazine, new opportunities, reputation, sampling, sole practitioners, solo, Solos who lawyer, time commitment, word press, world wide web

Before opening up my own practice, Carabash Law, I relied on Michael Porter’s 5 Forces Model (Competitive Strategy: Techniques for Analyzing Industries and Competitors) – which is used to assess the attractiveness of any given industry using five separate perspectives – to analyze the solo/small law firm industry in and around where I live.  Each of these 5 factors will be examined in turn.  This analysis also helped me to identify the key success factors for that industry (which I will discuss in the next blog).

1. Threats of New Entrants: Moderate
“The threat of entry into an industry depends on the barriers to entry that are present, coupled with the reaction from existing competitors that the entrant can expect. If barriers are high and/or the newcomer can expect sharp retaliation from entrenched competitors, the threat of entry is low” (source:  Competitive Strategy: Techniques for Analyzing Industries and Competitors, p. 27). Factors affecting the threat of new entrants in the targeted law firm industry primarily include the fear of “hanging out one’s shingle” and “going it alone”, the lack of legal and business management skills, knowledge, and experience, necessary operating costs and capital expenditures on office equipment/layout and information technology systems (e.g. research, documentation, billing, etc.), and accessibility to new clients.

The threat of new entrants into the targeted law firm industry seems relatively low. To establish a law firm, lawyers need to be licensed member in good standing of the Law Society of Upper Canada (which required getting into and completing law school, passing the Bar Admissions tests, and articling for 10-months), which acts as a significant first barrier to entering the industry. Throughout their minimum 7 years of university studies, law students accumulate large student loans and debts, which may take years to repay. Furthermore, many articling students and lawyers do not have the sufficient legal research, writing, presentation, and inter-personal skills to effectively market their services to the public in a meaningful way.

Establishing and managing a business also involves risk, time, expenses, and patience – something many people may not be fortunate to have in their lives (e.g. they may have a mortgage, be married with kids, have car payments to make, etc.).

Indeed, establishing a new business – but perhaps even more so a legal business which involves regulatory oversight from the Law Society of Upper Canada – involves a lot of additional management considerations which lawyers may be unfamiliar with and scared of. Lawyers may not, for example, understand or properly execute organizational theory, supply chain management, information technology systems, human resources managing, advertising and promotion, accounting and finance – in other words, areas of business management which affect their clients’ and their own practice.

Start-up costs are relatively low. Such costs typically include rent, a computer with internet access, a telephone/fax and related services, business cards, and other stationary (e.g. letterhead, paper, pens, stapler, etc.).

A successful firm will also require a steady stream of clients – something which is not guaranteed. Accessibility to clients may depend on word of mouth advertising, a convenient location, being situated near target markets, etc. A new firm would also have to coerce clients of existing law firms to switch over – something they may be reluctant to do because of their affiliation and sense of loyalty to one particular lawyer/firm.

Another factor affecting the threat of new entrants is the accessibility that potential entrants would have to the necessary labour pool. This, however, is not likely to create a high barrier to entry because the availability of administrative staff seems to be in abundance.

Finally, given the fragmentation and diversity of the targeted legal industry, newcomers need not expect swift or sweeping retaliation from established competitors in the form of price wars and special promotions and programs.

2. Bargaining Power of Suppliers: Moderately low
“Suppliers can exert bargaining power over participants in an industry by threatening to raise prices or reduce the quality of purchased goods and services. Powerful suppliers can thereby squeeze profitability out of an industry unable to recover cost increases in its own prices” (source: Porter, Michael E., “How Competitive Forces Shape Strategy” (Jul-Aug 1997), Harvard Business Review, p. 5). A supplier group is generally powerful if it is dominated by a few companies and is more concentrated than the industry it sells to.

The bargaining power of suppliers in the targeted law firm industry is moderately low. While some suppliers (e.g. of stationary) can be easily replaced with little transaction costs, other suppliers (e.g. application software, information management systems, research databases, etc.) can be difficult not to rely on. That being said, there are my alternative and sometimes free sources which can be used as a substitute to those suppliers. Moreover, suppliers of utilities (e.g. hydro, electricity, telephone, gas, internet, etc.), labour, and various services (e.g. cleaning, repair, vending, etc.) are generally either too small, widespread, or do not differentiate between this and other industries.

3. Bargaining Power of Buyers: Moderately low
“Buyers compete with the industry by forcing down prices, bargaining for higher quality or more services, and playing competitors against each other – all at the expense of industry profitability” (source: Competitive Strategy: Techniques for Analyzing Industries and Competitors, p. 24) .

The bargaining power of buyers in the targeted law firm industry seems to be moderately low. Granted, lawyers do offer some services for which only they can deliver (e.g. representation before a court, public notary/commissioner for taking affidavits, etc.). Yet competitors such as other law firms, consulting companies, and paralegal firms can perform legal services but at a cheaper rate. Moreover, access to information through the internet may allow potential clients to engage in self-help (e.g. drafting a commercial agreement, registering a corporation, filing a divorce, etc.) or conduct their own legal research (e.g. www.canlii.org). These things being said, the firms in the targeted legal industry do not advertise their prices and individuals may not be able to distinguish one firm from another – ultimately hiring the first lawyer they find or are referred to. When it comes to promoting and protecting one’s legal rights and obligations, people may not be as open to shopping around because legal services may be seen as more than a commodity and more of a value-added service. Also, law firms impose relatively high switching costs (e.g. lawyers may demand payment for switching before handing the client’s file over to them) for clients who decide to take an active matter elsewhere before it is finally resolved.

Ultimately, buyers may not do as much shopping around for legal services as they might for retail products because of the lack of meaningful information available to them. Typically, clients hire a lawyer through word-of-mouth referrals, which means that they have little purchasing power.

4. Threat of Substitute Services: High
“Substitutes limit the potential returns of an industry by placing a ceiling on the prices firms in the industry can profitably charge. The more attractive the price-performance alternative offered by substitutes, the firmer the lid on industry profits” (source: Competitive Strategy: Techniques for Analyzing Industries and Competitors,p. 23).

The threat of substitute services is somewhat high: primary competitors can be found in thousands, while secondary competitors (such as consulting companies and paralegal firms) promote themselves for low-cost alternative legal services.

5. Intensity of Rivalry among Competitors: Low
“Rivalry among existing competitors takes the familiar form of jockeying for position – using tactics like price competition, advertising battles, product introductions, and increased customer service or warranties” (source: , p. 17).

The primary and secondary competitors generally have not distinguished themselves from one another and, as such, do not have an effective strategy. They do not seem, in their advertisements or other marketing communications materials, to understand or appreciate what the competition is doing to win clients over. And because they do not openly advertise their fees or offer warranties to compete, the intensity is relatively low. Given that most of the competitors can offer the same fitness classes and programs, they can only distinguish from one another based on price and non-price factors (e.g. quality of services, environment, brand image, etc.).

Michael Porter’s 5 Forces Model Conclusion
This 5 Forces analysis indicates that, overall, the attractiveness of the targeted law firm industry is considered moderately high. Despite the relatively low start up costs, low supplier and purchaser power, and low intensity among rivals, developing and managing a successful law firm has significantly high start-up costs which cannot be easily learned or accumulated.

written by admin \\ tags: 10 months, 5 forces analysis, admissions tests, affiliations, attractiveness, bar admissions, bargaining power, barriers to entry, blog, business management skills, capital expenditures, commissioners, competition, competitive strategy, competitor, court, equipment layout, information technology systems, key success factors, law society of upper canada, law students, lawyer, lawyers, low Michael Porter, Michael Porter, newcomer, notary, paralegal, paralegals, passing the bar, practitioner, referrals, research documentation, retaliation, s and marketing, separation, shingle, solo, start up costs, start-up, student loans, supplier power, technology, threat of new entrants, threat of rivals, threatening

We have begun working on a new report that will deal with the possible end of the billable hour.   Specifically, we will be conducting a survey of 1,000 solo / small firm Toronto lawyers over the next month and asking them basic questions about their hourly rates, fixed fees for certain transactions, etc.  It’s likely that we’ll find that certain lawyers (based on experience and legal area) are more expensive than others.  We want to tie in the data to a broader discussion on alternatives to the hourly rate, such as fixed fees, contingency fees, request for proposals, day-rates/week rates, etc.  The idea has generated a lot of interest from the media already.  Stay tuned for the release of the report (hopefully in the next few weeks or so)…

written by admin \\ tags: billable hour, Dynamic Lawyers, Dynamic Lawyers new Dynamic Lawyers, DynamicLawyers.com report billable hours, end of the billable hour, fixed fees, lawyer, lawyers, legal fees, rent-a- s, report, solo, toronto

In this week’s Law Times newspaper, Robert Todd discusses Dynamic Lawyers‘ first report on Toronto Lawyers and the Internet.  Robert Todd’s article can be viewed here.

You can read the article for yourself, but the bottom line, as I point out in the report and in the article, is that solo and small firm Toronto lawyers have a long way to go to embrace the Internet as a place to promote themselves and provide meaningful information to prospective clients.  More and more, Torontonians are hopping online to look up things on Google.  They’re connecting through Facebook, MySpace, and LinkedIn.  They’re buying things on eBay and advertising their goods and services on Craigslist.  They’re going online to find information and deals.  They’re increasing their buyer power and putting those who don’t get online at risk of losing them.

For the report, we surveyed 1,000 randomly-selected solo and small firm Toronto lawyers and found that, while most of them could be found online, about 1/4 of them didn’t have website, of those who did have websites, virtually half of them had no meaningful content (e.g. articles, cases, commentary, etc.), and only 13 websites had blogs.  At the end of the day, much remains to be done by these and other lawyers to get on the Internet and market themselves properly…

written by admin \\ tags: content, Dynamic Lawyers, law times, lawyer, lawyers, Michael Carabash, newspapers, on internet, report, Robert Todd, solo, toronto

Going solo is not for the feint of heart.  I knew I was going to go solo long before I even finished articling.  I prepared myself for months.  I wrote a 200 page business plan (which, although remains incomplete to date, did help me focus my ideas at the time).  The bottom line is that endless preparation is one thing, good execution is another.  Here are 6 good reasons why any lawyer would want to go solo.  In fact, these are precisely the reasons that made me do it:

1. allow me to earn a significantly higher income vis-à-vis being employed for someone else;
2. expose me to clients and interesting/challenging work;
3. provide me with new legal and business knowledge, skills, and experiences;
4. create new income-generating opportunities;
5. give me significant control over my working environment; and
6. provide me with an unmatched level of overall personal satisfaction.

These things being said, there are also 6 reasons why some avoid the prospect of going out on their own:

1. Lack of specialization, leading to lack of knowledge about various subject areas and the risk
   of making mistakes;
2. Succumbing to financial problems (e.g. having to pay for high overhead expenses all by yourself);
3. Not being able to handle large or complex matters (and the large fees that go with them);
4. Having responsibility over all administrative details;
5. Not being able to have anyone in the office to handle emergencies during your absence;
6. Isolation from other lawyers.

Overall, a lawyer should do a lot soul searching before deciding whether going off on their own is the best thing for them.

written by admin \\ tags: execution, hanging a shingle, lawyer, lawyers, Sole Practitioner, solo

Dynamic Lawyers has just issued this 3-page report on 5 ways in which solo/small firm Toronto lawyers can make their websites stand out (many of which, as per our last report, are in dire need of improvement!):

written by admin \\ tags: improve your website, lawyer, Lawyer Websites, lawyers, report, solo, toronto

Just for fun, I researched the locations of 1,000 solo/small firm Toronto law offices.  As one could guess, they are hudled around 290 ‘hot spots’ and concentrated heavily in the downtown area.   Here’s a link to te map, courtesy of BatchGeocode.com (which allows you to plot multiple locations on a single Yahoo! map).

Based on my quick observations, the largest concentration of these lawyers are located along Young St. and near courthouses (e.g. University Ave. and Dundas St. West, Warden Ave. and Eglinton Ave. East, Dufferin St. and Finch Ave. West, etc.).

written by admin \\ tags: lawyer, lawyers, solo, toronto, yahoo

We have just issued this 2-page report on solo/small firm Toronto lawyers and the Internet.  The bottom line is that this group can and should be doing more to promote themselves on the internet and provide more meaningful information to prospective clients.

written by admin \\ tags: lawyer, Lawyer Blogs, Lawyer Websites, lawyers, Legal Content, report, solo, toronto, Toronto Lawyers and the Internet