News

Coronavirus Puts Business Survival of Solo, Niche Attorneys to the Test

By John Murph

April 6, 2020

The coronavirus pandemic is wreaking havoc on the global economy. In the United States, a record 6.6 million people filed for unemployment benefits during the week ending March 28, reported the New York Times. This was on top of 3.3 million jobless claims from the previous week. 

While service businesses such as restaurants, bars, gyms, and hotels have been hit especially hard, law firms and solo attorneys have not been spared from the economic fallout, either. 

Back in April 2019, Washington Lawyer featured several solo attorneys and small niche firms that emerged after the 2008 economic recession. We checked in with these Bar members last week to find out how their practices are faring during the coronavirus crisis. Here are their stories. 

John McGowan and Meredith Kinner
Kinner & McGowan, PLLC  

WebFinalKinnerMcGowenA year ago, John McGowan and Meredith Kinner were excited about moving their cannabis law practice from a WeWork shared space to a Capitol Hill rowhouse. Now, the coronavirus pandemic has changed some of their entrepreneurial momentum.  

“It’s funny how some things come full circle. When you wrote the article about us, we were just moving into a new space,” McGowan says. “Well, the lease of that space [ended] in March. We’ve chosen not to renew it because of the uncertainty of what’s going on.” 

McGowan and Kinner have chosen to work from their homes instead of signing another lease or returning to a shared workspace. “That’s a way to cut back on expenses,” Kinner explains. 

“Obviously, we are not taking in-person meetings right now. Everything we’re doing with clients is taking place over the phone, through Zoom, or via UberConference. That’s a great way to cut our logistical expenses and make sure that we have enough cash on hand should we see a decline in business.”  

So far, they have yet to experience a decline in revenue. Perhaps one reason is that medical marijuana dispensaries and companies are deemed essential businesses in Washington, D.C., and Maryland. 

Still, McGowan and Kinner are cautiously optimistic regarding their ability to attract new clients during the coronavirus lockdown. “It’s really hard to ask people to spend money on legal services right now,” Kinner says. “If the clients are concerned about whether they are going to shut down or if they qualify as being an essential business, they might not prioritize legal services that they normally would.”  

Kinner says this new reality has forced them to have more transparent conversations with clients about whether they can actually afford their services. “I think we will have to be more conscious about payment when a client asks us to do something during this time. We have to really think about what’s reasonable so there will be no surprises,” she says. “That will facilitate a lot more conversations prior to us doing the work.” 

Another setback to their practice is the recent postponement of many industry-related activities. “April is always a big month for the cannabis industry,” explains McGowan, mentioning the National Cannabis Festival and National Cannabis Policy Summit in Washington, D.C., which was originally scheduled for April 18. “Those were opportunities for us to promote our firm. But this year, nearly everything has been canceled or postponed.” Those events are now scheduled for September. 

McGowan and Kinner were also hoping to hire an associate this year, but that plan is now on hold. “Businesses our size are going to be more cautious about taking financial risks in the near future because we want to make sure that we have cash reserves,” Kinner says.  

McGowan foresees a Darwinian effect regarding the survival of small firms and solo practitioners. “Like every industry, there will be small firms closing” he says. “They might have expensive leases and a lot of overhead. They will have to downsize significantly or go out of business. I’m hoping that doesn’t happen. But there will be a little bit of ‘survival of the fittest’ as long as the pandemic continues.” 

Justin Zelikovitz 
DCWageLaw 

ZelikovitzNEWPSGetting clients is not a major concern for Justin Zelikovitz, founder and managing partner of DCWageLaw. In fact, he’s seeing an uptick. 

DCWageLaw represents clients who work for businesses like restaurants, bars, construction companies, and janitorial services. Many of them are low-wage employees who have pay disputes. When the firm takes on a client’s case, it sues the employers for lost wages. If it wins the case, it receives a percentage of the recovery claims instead of charging the client upfront legal fees. “A dishwasher who’s not even making minimum wage can’t pay for a lawyer,” Zelikovitz explains. 

“Before [the pandemic] became huge and the government started putting restrictions on restaurants serving customers onsite, we were getting calls from clients being fired,” Zelikovitz says. “It really became real when we started getting calls from clients saying, ‘Hey, I’ve been working at this restaurant for 10 years. They just fired me this morning because of the coronavirus.’ Once those stories started trickling in, it became evident that we’re not going to have a shortage of cases. This year, I’ll have more cases than I’ve ever had.” 

The concern for DCWageLaw is the ability of the defendants — the restaurants, cleaning services, bars, etc. — to be able to pay if they lose. “I can have all the cases in the world, but it doesn’t matter if the defendants can’t pay me,” Zelikovitz says. “We have to be more careful about the cases that we take. And we’re probably going to focus on industries that aren’t as hard hit. So, we will file a couple of cases against liquor stores, which are doing just fine, and mechanic shops. We will probably have to err on the side of taking fewer restaurant cases because a lot of them are going to go under very shortly.”  

Because of technology barriers that some of his clients face, Zelikovitz keeps his Chinatown-based firm open so that someone from the five-member staff at DCWageLaw can review client documents and issue trust checks in person. But as a precautionary measure, only a maximum of two people can be physically present in the office. 

“We are fortunate enough that we have a cloud-based practice management software,” Zelikovitz says. “So, all of our work can get done from our home computers. We were lucky in that we had shifted into Zingle, which integrates text, WhatsApp, and Facebook messages. So, when people use those platforms to contact us, it doesn’t matter where we are — on our phones or computers — it’s all integrated into one stream so that we can respond.” 

Zelikovitz says he has a fair amount of financial reserves to keep DCWageLaw afloat.

“But in terms of long-term sustainability, in a couple of months from now we may have to reduce pay by about 25 percent just to guarantee that everybody will have a job,” he says. “This is a precarious time. I want the people who work for me to realize that there are troubles down the road for the entire economy.”  

Allen Orr 
Orr Immigration Law Firm P.C.  

AllenOrrWebFinalBeing a solo attorney enables Allen Orr to reduce overhead quickly. He can forego expenses related to working in a shared or commercial space. He doesn’t have to worry about payroll for any employees or cleaning staff. 

Somewhat of a minor concern is the possible closure of vendors he uses for printing and shipping. Orr prefers to use local businesses as much as possible. “The government has made some progress regarding signatures for immigrants; we’re now able to use these digital signatures,” he says. 

He’s also adept at teleworking in various spaces and conducting some client meetings over Zoom or Skype. “But you don’t really get a chance to feel your client in certain points,” he says. “There might be a language barrier or a technology barrier when I’m interacting with a client who’s an immigrant. If I’m using video technology, I might be able to pick up on some of the nuanced information my clients would normally share if we were meeting person to person. A lot of communication through technology is sort of flat.” 

Orr has greater concerns, though. As an immigration lawyer who specializes in business compliances and audits, he wonders if work will drastically shrink after the pandemic is over. “All of the embassies are closed. The U.S. Citizenship and Immigration Services has temporary suspended in-person services. All Department of Labor investigations have been frozen for the next 60 days. All of that sort of put a hold on the incoming work that I have,” he says.  

“We can still send petitions through the mail, which is great if you’re already at that process. But for my practice, I deal with the government investigation of companies, and I also do visa applications. Right now, companies are assessing if they want to follow through with immigration-related applications or not.”  

Orr says he’s already had two clients that had to shut down business for two weeks. “I work in the gig economy. I eat whatever comes through my door. So, for clients that I’ve had for years that I never took a retainer [from] because they are good payers, I’m now concerned about who they are going to pay first. That can be very problematic for someone who has an expensive overhead. Luckily, I don’t.” 

Orr first recognized that the coronavirus pandemic may have a negative impact on business when he was in Georgia in early March for a speaking engagement at Valdosta State University. From there, he was supposed to go Chicago for an American Immigration Lawyers Association (AILA) regional conference. But out of safety concerns, the AILA canceled the conference. “That was my first indication that things were not going well,” he recalls. 

Those types of conferences and speaking engagements help Orr to network and recruit more clients and create revenue streams. With those on indefinite hold, Orr’s safety net loosens. 

“Situations like this pandemic compress the market for solo practitioners,” he says. “Some might have to go back to working at larger firms or figuring out how to fend for themselves within the gig economy in terms of doing document reviews. Some will have to revise their practices altogether — go into something like bankruptcy law.” 

Orr recalls how many immigration lawyers had to revise their practice after 9/11. The U.S. Patriot Act was passed in 2001; the Department of Homeland Security was formed in 2002; and the Immigration and Naturalization Service was dissolved in March 2003. “Everything was rejuggled. During that time, I had Baker McKenzie, a big immigration firm, behind me. If I didn’t, I might have gone into a different practice,” he says. “This pandemic [means] some law practices may not survive, just like the booming housing market might not survive.” 

Small law firms are eligible to apply for the Paycheck Protection Program, which was recently activated under the Coronavirus Aid, Relief, and Economic Security Act. D.C. Bar practice management advisor Dan Mills has put together a guide to financial aid and resources for small business, including law firms, to get economic relief during the pandemic.