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No Navigator, No Parachute, No Problem: First Quarter of Flying Solo

Blank Lawyer Type Sign or Shingle.Just dumping a bunch of numbers on you won’t be very helpful, so in order to provide some context for the data, here’s a little information about my practice:

I live and practice in a place that has a somewhat lower cost-of-living than you might associate with Florida (in other words, I’m not in downtown Miami or anything like that).  My practice area isn’t oversaturated with other attorneys; instead, my competition comes from a small number of very established attorneys who have been doing these types of law in this area for many years.  I rent office space from a two attorney firm that recently bought a large, restored Victorian-style house to serve as their new office building.  My rent gets me the following: 18’ by 20’ office, internet, utilities, phone, use of the two conference rooms, kitchen, their huge copier/scanner, and their downstairs receptionist does the welcoming routine (greets my clients, shows them to a conference room, gets them drinks, etc.).

With that out of the way, here’s the breakdown.

January

Clients

  • Clients brought over from previous firm: 3
  • New clients in January: 5
  • Total clients: 8

Expenses

  • Bar dues/membership fees: $426.64
  • Malpractice insurance: $254 deposit, $76/month
  • Office supplies (including paper/pens/etc., furniture, business card, letterhead, postage,    computer, scanner and so on): $2,189.54
  • Rent: $350 (jumps to $550/month starting in February)
  • Fee-sharing with other attorneys: $500
  • Court costs and associated fees: $642
  • Other assorted junk: $400
  • Total expenses: (roughly) $3,700

Income

  • Earned: $7,000
  • Retainer: nothing
  • Net income: approx. $3,300
Analysis: I think January was pretty decent, all things considered. While my expenses were high, I had a lot of one-time startup costs such as furniture, computer, scanner, and such) that I won’t have to repeat in the near future. My clients from this month were a mix of cases sent over from my local bar association’s lawyer referral service, referrals from other attorneys, and one of my wife’s co-workers. I didn’t pay myself anything this month, as I wanted to build up some money in my operating account first.

February

Clients

  • Family: 1
  • Referrals from local bar’s lawyer referral service: 2
  • Referrals from other attorneys: 2
  • Referrals from other professional sources: 1
  • Total new clients: 6

Expenses

  • Malpractice insurance: $78
  • Office supplies (including payments to business credit card): $470
  • Rent: $550
  • CLE: $140
  • Court costs and associated fees: $377
  • Website expenses: $20
  • Other assorted junk: $140
  • Total expenses: (roughly) $1,430

Income

  • Earned: $3,675
  • Retainer: none
  • Net income: approx. $2,245

Paychecks

  • 3 paychecks @ $1,000 each: $3,000
Analysis: February sucked. Though my new client number didn’t drop, the clients that came in were small-value cases that didn’t pay much (on in one case, a free probate for a deceased family member). Add that it was one of the coldest months on record, which I’m sure didn’t help traffic much. Also, in looking at my numbers later on, I realized that I accidentally paid myself three times. I started out the month with the goal of paying myself twice (on the first and 14th/15th of the month), but at the end of the month, I decided to switch over to a 14th/15th and last day of the month combo; unfortunately, I had forgotten that I had already paid myself once on the first of the month, thus leading to three paychecks. This means that, after those paychecks, my operating account was actually down approx. $755 on the month. Like I said, February sucked.

March

Clients

  • Referrals from other attorneys: 3
  • Referrals from other professional sources: 2
  • Came after hearing me at a speaking engagement: 1
  • Total new clients: 6

Expenses

  • Advertising: $30
  • Office supplies (including payments to business credit card): $320
  • Rent: $550
  • Court costs and associated fees: $67
  • Lawyer Referral Service referral fee: $200
  • Other assorted junk: $17
  • Tax withholding (goes into a separate savings account): $1,800
  • Total expenses: (roughly) $2,984

Income

  • Earned: $11,900
  • Retainer: none
  • Net income: approx. $8,916

Paychecks

  • Two paychecks @ $1,500 each: $3,000
Analysis: March was much better. Even after my paychecks, my operating account netted a surplus of nearly $6,000, which was obviously a huge turnaround from February. The difference mainly came from more quality cases (note the lack of any new clients coming in from the local bar’s lawyer referral service), which led to more fees collected.

In summary, my first quarter led to approx. $22,575 of income and $8,114 of expenses, netting me approx. $14,461.  I’ve taken $6,000 of that as paychecks, leaving my firm with nearly $8,500 in the bank.  I know that might not seem like much to a lot of you, but after all the doom and gloom I read before starting out, I’m actually ahead of where I thought I would be at the moment.  I’m still networking my tail off to increase my exposure and I know I need to be withholding more money to pay my taxes, but I think things have gone okay so far.

As always, feel free to leave your questions or comments below, or shoot me an email at florida_esq@outlook.com.  I’m looking forward to hearing from you, and I’ll see you again in May.

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About Florida Esq

Florida Esq. is a 2011 UF Law grad, country boy and solo attorney, practicing somewhere in the beautiful Florida sunshine. When not kicking tail and taking names (in a law practice sense, of course), he’s usually hanging out with his beautiful wife and two dogs, reading, gaming or lying on a beach somewhere. While you’re here, he’d appreciate it if you could take the sunscreen and get this one spot on his back.

9 comments

  1. This is really helpful. Please keep updating us with how this goes for you!

    • Thanks! I plan on posting monthly updates, so look for another one to pop up in early May.

  2. We’ve talked privately, but I also wanted to publically thank you again for being willing to open your books to everyone. Kudos to you.

    Also wanted to say that sub-leasing space from established attorneys is such an excellent way to start a practice. Too many people overlook it as an option and feel the need to get some overly fancy office or a virtual space with Regus, etc.

    Sub-leasing is a smart way to start out in order to keep overhead low. You get all the benefits of having an office at reduced costs. The fact that you get net, phone, conference room, copier access, secretary, etc for $550 is a great deal. You also have the option on being the first person available to take any overflow work they may have. Plus you have someone to ping ideas off of if you need to.

    Question that may help other people: how did you find this space? Did you know these two attorneys already or did you find them once you started looking for somewhere to hang your shingle?

    • No problem. Happy to help any way I can.

      I dumb-lucked my way into the office space. I originally met the two attorneys just after I found out I was going to have to leave my job; I hadn’t decided to hang my shingle yet and was still looking for anybody in the area that might be hiring. One of my wife’s co-workers used to work with one of these attorneys years ago at another firm and suggested that I call him. No job offers came of it, but they shortly contacted me because they needed someone in my practice area to help them with part of one of their cases. A couple of weeks later, they mentioned that they were in the process of closing on a building that would be their new office (they were renting a building at the time), and asked if I wanted to rent some space from them. One of those “right place, right time” sort of things, which is one of many reasons why I’m so big on networking with other attorneys: the more people you know, the better your chances of stumbling into something great.

  3. Interesting, thanks for being willing to share your finances. What practice area are you in?

    • I’d rather not say, as that would go a pretty good way to exposing my identity and I’m not quite ready to do that yet.

      However, based on my remark about my competition not coming from a ton of attorneys flooding the practice area, you can assume I’m not personal injury or criminal defense.

  4. Thanks for sharing. I think you are doing great for your first year! As an attorney entrepreneur it’s nice to see how my numbers compare to other law firms.

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