Q. I consider my small firm of three lawyers and an office manager successful as we have a good track record and provide excellent service to our clients. However, I admit I have not been on top of the business aspect. I have billed many of our clients, who are not people of means, for fewer hours than were actually spent on their cases.
I now see, retrospectively, that expenses have exceeded income, and the result is that I find myself with a large personal debt, mostly on credit cards. I met with the leading credit counseling service, but the only solution they could offer was a five-year payoff plan to the bank, entailing a monthly charge far beyond my ability to pay.
I have cut staff and expenses so that I am not building up new debt, but I see no way to catch up on existing obligations without declaring bankruptcy, which I hate to do. Can LCL provide me with a lawyer to negotiate with the bank?
A. LCL is staffed mainly by behavioral health professionals, and does not provide or refer clients to legal services. (Bar associations do offer referral services, though as an attorney yourself, you may be seeking a more selective process akin to our referral process to counselors, therapists, coaches, etc.)
We seem to be meeting an increasing number of lawyers in your situation, perhaps reflecting something about the current economy. We are as dismayed as some of our clients at the limits of resources and remedies available. We have referred to the same long-established credit counseling service that you’ve already used, whose essential “product,” we have heard, is a five-year plan that may not be affordable. (We have heard, also, that some of the newer services may operate with less integrity.)
A certified financial planner may be of help, though many CFPs focus mainly on investments. An organization called the American Association of Daily Money Managers has recently come to our attention, but we have not yet had any experience in referring to them.
Clearly, the situation in which you now find yourself, which is not uncommon among sole and small practice lawyers, has awakened you to the necessity of taking care of yourself and your practice as conscientiously as you attend to your clients. Legal strategies, such as bankruptcy, as well as psychological strategies, such as learning to balance self interest with client interests, may warrant a second thought, especially if turning a blind eye to financial realities represents a pattern that produces stressful and self-defeating consequences.
What we may be able to do, as clinicians, is to help you take a look at the thinking and beliefs behind these kinds of patterns, so that you may not need to find yourself in this bind again.
Questions quoted are either actual letters/e-mails or paraphrased and disguised concerns expressed by individuals seeking assistance from Lawyers Concerned for Lawyers.
Questions for LCL may be mailed to LCL, 31 Milk St., Suite 810, Boston, MA 02109 or called in to (617) 482-9600. LCL’s licensed clinicians will respond in confidence. Visit LCL online at www.lclma.org.