The Perils of Law Firm As Business
In honor of the Small Business Administration's Small Business Week, I find it eminently appropriate to share some thoughts with you about BVA as a small business.
When I meet new people, I tell them, "we are trying to do things different." What I mean when I say that is that we are trying to develop a law firm that is the champion of small business, without having to resort to subsidizing our work through large corporations.
In my experience, legal services have become too corporate-ized, in that firms will charge the higher of whatever it takes to recover their overhead, and whatever they can get away with charging a large corporation. These large law firms have set standard rates meant to accomplish the above. And while a large law firm can make a small business a deal, say, to form its entity, in reality, the large law firm cannot profitably service a small business thereafter. Some large law firms take the hit, in the hopes that a small business will become a big business, all the while focusing its greatest resources on its most valuable clients. Which are large corporations.
Here is the reality of most small firms. Most small firms survive because they have one big client, or because they get referrals from personal friends. BVA does not have one big client. While BVA does get referrals from fellow attorneys and friends, the only way for BVA to make money is to become the choice of Greater Omaha for small business matters. We really want to act as a startup to achieve this goal, but there are a couple pretty big obstacles.
First, a law firm cannot ethically be owned by non-lawyer owners. See Neb. Ct. R. Prof. Cond. § 3-505.4(d). I understand that BVA is probably not the ideal choice for venture capital or angel investors, but this means we are very limited in the people that can be investors in our law firm. This means that no matter how much we grow, we probably cannot get a capital infusion to scale, unless it comes from another lawyer owner. This doesn't prevent us from obtaining loans or family infusions, but it does cancel one valuable option for growth.
Second, a lawyer cannot directly solicit a prospective client face to face. According to Neb. Ct. R. Prof. Cond. § 3-507.3, "A lawyer shall not by in-person, live telephone or real-time electronic contact solicit professional employment from a prospective client when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain..." This rule literally prevents BVA from pounding the pavement and letting others know about our services. I know of several instances where other professions have printed out flyers and marched into the offices of their targeted customers to make initial contact. Alas, BVA cannot do this. This rule does not prevent BVA from attending networking events, and telling others what we do, so that is where you will find BVA on most days. Educating the world on our services.
In spite of the above, we at BVA have a strong belief that our model will bear fruit. We are making some exciting connections that we hope to share with you soon. So stick around and follow our growth from idea to business.