THIS winter, three laid off lawyers founded a new firm. It survived less than a year.
The fate of the firm could serve as a warning sign for laid off lawyers set on signing up new partnerships in a shaky market.
As Australian lawyers face the inevitabilities of law firm cut backs, the attraction of a law firm start-up may appear attractive.
But not always is the outcome positive. When they were aid off from Alston & Bird, DLA Piper and Standard & Poor's, US lawyers Scott Jaffe, Paul Roberts and Ross Schiller created a firm made up of laid-off lawyers.
The trio planned to open a boutique firm in Manhattan that specialised in finance, commercial law and bankruptcies. They bought computers and distributed marketing material, even signing up a few clients.
But by July this year, as American Lawyer reports, the firm that was supposed to be Jaffe, Roberts & Schiller was dead.
The downfall was slow but sustained. The trio had rented a 450-square-foot space, and each lawyer had a desk, and bookshelves divided the room. There was a small table with two extra chairs, in case a client came by. The lawyers contributed $2,000 apiece for the initial capital.
The rent was low at only $1,500 a month, so the lawyers thought they could charge less. Jaffe, Roberts & Schiller advertised lower hourly rates, and said they were open to fixed-fee arrangements, reports American Lawyer.
But the launch was not smooth, and they held off marketing themselves for about a month, to see if a friend who'd been laid off from Morgan Stanley would join. He didn't.
In order to find clients, Jaffe trolled Craigslist for contract attorney gigs. But he discovered they typically pay just $35 an hour, so he passed. According to reports, Roberts's wife pitched his services to someone sitting next to her on a bus.
Roberts also said there were some challenges in adjusting to the new way of practicing.
"[Jaffe] clearly has the hardest time dealing with all the things we have to do to start a firm," Roberts said in April. "He's always had secretaries doing his markups, and he's never used a computer before."
Jaffe, 44, agreed that he was getting used to typing his own letters. "Especially for a dinosaur like me who didn't type e-mail until now, that is the hardest part."
Work was slow to arrive. Roberts, 40, says he was close to signing a client who could have covered their monthly expenses. It never happened. The group kept busy with pro bono work.
But the real end for the start-up came with both Jaffe and Roberts took vacations they had planned before the layoffs.
Before Jaffe left for a month-long trip to Italy in June, Schiller decided to leave the firm. "I really thought the market would be different. I thought there would be more transactions to be done, especially with the government money," Schiller said. "It's not really the case right now." He is looking for a new job. Like so many of his contemporaries.