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Episode 117
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Practice Management and Business Skills
Solid Foundations: How To Start a Law Firm From Scratch
Law as stated: 23 February 2024
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This episode was published and is accurate as at this date.
Legal and social media extraordinaire James d'Apice joins David in the Curiosity Recording Room to discuss the intricacies of founding a law firm from his own recent experience with Gravamen. Touching on correcting common mistakes, the process, and the importance of being true to yourself.
Practice Management and Business Skills| What area(s) of law does this episode consider? | Founding a law firm. |
| Why is this topic relevant? | The challenges of establishing and building your own law firm are both immense and immensely rewarding – and our discussion today aims to provide valuable insights for our listeners considering this as a career path. For those seeking the independence and entrepreneurship of running your own firm, understanding the process of founding one is crucial. |
| What are the main points? |
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| What are the practical takeaways? |
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DT = David Turner; JD = James d’Apice; RD = Ross Davis
| 00:00:14 | DT | Hello and welcome to Hearsay The Legal Podcast, a CPD podcast that allows Australian lawyers to earn their CPD points on the go and at a time that suits them. I’m your host, David Turner. Hearsay The Legal Podcast is proudly supported by Lext Australia. Lext’s mission is to improve user experiences in the law and legal services. And Hearsay The Legal podcast is how we’re improving the experience of CPD. There are some immense challenges and immense rewards to establishing and building your own law firm. And on the show today we’ll be discussing some valuable insights for our listeners who are considering this as a career path. Now, for those seeking the independence and entrepreneurship of running your own firm, understanding the process of setting one up can be crucial. Our guest today is a returning guest – he’s recently done just that, starting his own law firm. James d’Apice, recent founder of the law firm, Gravamen, where he’s brought his significant private practice expertise in areas like shareholder disputes, partnership conflicts, all things Corporations Act to the practice. As you may already know, James is also the creator and presenter of Coffee & a Case Note, where he distills cases over caffeine in local cafes – although I suppose maybe some of the local cafes have changed a little bit for you recently, James? |
| 00:01:29 | JD | I suppose it depends on your locale, David! It’s an interesting one, yes. |
| 00:01:34 | DT | James, we’re very pleased to have you back on the show today to talk about establishing Gravamen. Welcome back to Hearsay! |
| 00:01:40 | JD | David, delighted to be here. And look, appreciate you acknowledging that for the first time in a little while, this will be a chat you and I have where I’m slightly sort of out of my… this has been an area of expertise for me for about 12 weeks now! So very happy to lay my cards on the table with being part of the learning process. So appreciate the time to reflect and nut out some of the mistakes I’ve already made. |
| 00:02:00 | DT | Well, I was going to say, our listeners might learn a lot from the mistakes you’ve made over the last 12 weeks as they have from the successes. So let’s jump into it. Now, as we said at the top of the episode, you’ve just founded your own law firm, Gravamen. Tell me a bit about the name – gravamen means sort of the kernel or root of a complaint. |
| 00:02:15 | JD | Precisely so. It’s a word that got into my head maybe six or seven years ago. You would read it occasionally in judgements and it’d be used in exactly the way you’ve just described, David, as a little sort of kernel, core. And I understand its derivation comes from something similar to gravity, similar to the sinker. Like apparently, so if you are an ancient angler, an ancient person who is fishing, you’re going to weigh down your net. And apparently the derivation of some of the things you’d weigh down is going to be similar to the derivation of the name of my law firm or our law firm. I need to start saying our! And so the message I really wanted to convey with it was to say there are any number of excellent law firms out there and what our firm is about is getting to the core, getting to the nub, getting to the Virginia Woolf nugget of truth at the center of a dispute, rather than dealing with any other extraneous or arguably linked issues. We’re not interested in the puff. We’re not interested in the periphery. We’re interested in getting to the heart of what’s going on. We’re interested in the gravamen. And so that’s really what I wanted to communicate by selecting that name. On one view, it’s pretty descriptive, David. So I think there’s a trademark question that I’m going to need to rub my chin about. That’s a different discussion for a different day and perhaps lines up in the mistakes pile that we might end up coming to discuss, but it’s a name that sort of speaks to me and hopefully it’ll speak to the marketplace more broadly as well. |
| 00:03:42 | DT | Yeah, I really liked the name. Now that you’ve given me that explanation, I think it’s a strong value and an actually really valuable skill for a litigator to be able to get to the heart of an issue rather than wasting all of that time and well clients’ money on those extraneous issues, especially early on in correspondence. Now, I suppose in our conversation today, we’re probably going to touch on, I guess, three areas, the kind of regulatory steps of setting up the legal steps around structuring and then the business plan. But at the top of the episode, I said that some people who are thinking about this as a career path might be doing it for independence, to be their own boss. They might have an entrepreneurial spirit. What was the motivator for you to start Gravamen? |
| 00:04:24 | JD | Yes, David, you and I don’t have the most different background in reflecting on our career. So I was at a different role until sort of mid-2023. And that was at the partner of a sort of small national law firm called Chamberlain’s. Chamberlain’s is going gangbusters and turning on its afterburners in relation to its offering to its real consumer core client base. So personal injury plaintiffs doing great with sort of wills and estates, online wills offerings, building and construction work, insolvency stuff and restructuring, family law, all these sorts of excellent areas. And after having some fairly sober discussions, we came to the position that a pretty specialist sort of shareholder disputes practice didn’t marry perfectly with the kind of more consumer focused area. And so we very much parted as friends and there are nice text messages and nice emoji and nice WhatsApp groups and all that sort of thing. So it’s very much a holding hands, dancing through the wheat fields or whatever the metaphor is. But having formed the view that that wasn’t the space for me, I had an experience probably not light years from yours of like, okay, I’m a reasonably competent litigation solicitor. What is the next step that a person like that takes? And essentially there are your three options, right? Do I try to become a partner or very senior employee at some other firm that I like for whatever reasons? Option two, do I think about starting something of my own, either alone or with someone else? Or option three, do I think about reading for the bar? I formed the view that going into someone else was probably not the move for the moment because a lot of Gravamen is designed to weave around sort of the rhythms of my life and my pretty specific views about the world and about legal practice. And so the question really was narrowed down to, right, are we going to the bar? Are we starting our own firm? Or I’m lucky enough to also have the rhetorical question of are we doing house husband life as well, which we’re very fortunate to be on the table or something to be considered. But the law fire burns for me. And so it was a decision process that came to saying, what I like about starting my own firm is that flexibility and that independence and that control. If we run the fact pattern of going to the bar, David, that I’m gonna have to pick your brains on as well just during this conversation, cause I’m sure there’ll be people listening who’ve had the same reflection. What I reflect on is a profession that’s extremely attractive for its difficulty level, for its collegiate nature, and for the fact that you are the person being asked the hard questions and you’re being asked to answer those hard questions, sometimes without all the material in front of you you might want, and sometimes without all the time available to you you might want. Now that’s attractive to a number of us to say; “great, throw me in the fire and let’s see how I emerge”. And that’s attractive to me too. But a lot of the thought process revolves around – I’ve got a blurred background and you’ll be seeing an eight year old sort of shadow moving around in the blurred background at the back of this Zoom video. There are a number of those little blurred shadows at the back of other Zoom backgrounds. And so part of Gravamen is about having the real flexibility to not have to be in court for four days and “sorry, I’m just going”. It needs to be able to bend and twist around our lives. And also, and I say this from a very cold commercial perspective, to be able to charge a rate commensurate with my degree of expertise. If I had a baby barrister seeking to charge me the hourly rates that I charge my clients at the moment as a solicitor, I would not be particularly impressed. Whereas as a solicitor running a very small specialist firm I’m able to get a clearer understanding of the market and precisely the services I offer. So it’s that control and flexibility that led me towards a firm. And if I’d made the opposite decision it would have been that sort of degree of difficulty and excitement at the challenge. But this was just not the right phase of life I think, David. Your reflection was not identical, David, but how do you reflect on your journey as having had some time both sides of the aisle? |
| 00:08:23 | DT | Yeah, that’s right. So some of our listeners might know I practised as a barrister for a little while before returning to practise as a solicitor. And a lot of the things you described resonate with me, that flexibility is important. I’ve got two toddlers and a third on the way in March. |
| JD | Congrats! | |
| DT | Thanks very much. But it does mean that yeah, not being stuck in a two week trial is an important thing at this stage in life. But also something that I found was it is great to be asked the tough questions as a barrister, but also you’re asked them at a little bit of a later stage in the process. And sometimes I found that I’d be presented with a brief, evidence is on, pleadings are closed, hearing’s in four weeks time. And I realised I missed getting that really early involvement in a case and missed working more closely with the client. And often finding those results that mean that the matter never goes anywhere near a court, never goes anywhere near a barrister. And so having that earlier, more strategic involvement was important to me. And also having that flexibility. James, you’re a straight up and down litigator. I know you love litigation, but for me, I like doing a bit of the deals work as well and practising as a solicitor gives you that broader portfolio of work, I suppose. When I was contemplating leaving the bar, I spoke to one of my friends there about it. And he said that being a barrister is a great place to be if you have a love for the practise of law, but less so the business of it. Because the business part of it is you’re constrained in that way. You can really only sell your own time. You can’t practise in partnership. You can’t employ other lawyers. And the services that you can offer are to some degree limited, though they’re relatively broad these days. If you love the practise and the business of law then being a solicitor. It’s a highly regulated profession, but when I came back from the bar, it felt like it was hardly regulated at all. There were so many ways of charging, so many things you could do things, so many ways to scale up, so many ways to use technology to deliver services. So there’s a whole range of reasons why you might choose either of those two paths even if you are a litigator. Now, you said a couple of times just now you used the “we” rather than the “my” or the “our firm” rather than “my firm”, we rather than I. Is that a royal we or is there plans to expand? | |
| 00:10:27 | JD | It’s currently a royal we. It’s an interesting one, David. It’s sort of a topic that I think a number of people come to when they’re running these decisions of; “oh, I’ll open up my own shop”. It’s currently a royal we and it may forever be a royal we, but I just wanna keep two things square in my head when I’m dealing with the firm. Firstly, I’ve already had a couple of spats that we might get to where the idea of the entity I used to operate, this firm, and myself personally have become a bit blurred, at least in the minds of some other people. We may end up coming to that chat as we progress and I don’t want there to be a blur of the thing that holds the professional indemnity policy and the thing that may or may not employ people or the thing that enters into contracts and that sort of thing, being in any way connected with me, with James personally. Secondly, it just seems to be how people talk about law firms and I just wanna make sure I’m keeping up the right habits. So just force of habit, I guess. And then thirdly, royal we indeed. Oh, it’s just me and a laptop and a business name and a couple of other fiddly little bits of admin just here doing a little bit of corporate disputes work. |
| 00:11:31 | DT | I think it’s a good practise to get into because as you scale up, you find that it’s less and less helpful to keep talking about my expertise and my practise and what I do. And it helps to project some of that expertise and that ownership on the people that you work with. It’s a good habit to get into. Should we get into some of the kind of regulatory nitty gritty and maybe a lot of this stuff was in place because you were a partner at Chamberlain’s. But if you’re making the move to starting your own practise, what do you need to do in terms of your practising certificate in terms of satisfying the law society or law institute in your jurisdiction of practise that you’re fit to be unleashed on the public? |
| 00:12:11 | JD | I am going to give you the raw version, the honest version, David, of I can’t precisely remember off the top of my head. So I’ve had to go back to the to-do list and the squares that I’ve been ticking off and rely on my spidery handwriting and my dim recollection. So firstly, there’s that unrestricted practising certificate point in New South Wales. I think it’s a specific type of practising certificate that might be 5B if memory serves correctly. And I think that means that you’ve done what I’m going to loosely call the practice management course where you deal with all different sorts of topics and things like business development and running a firm and various things. But I say with great respect, the real heart of it is trust account stuff. Look out for goofing about with your trust account. And so if you’ve walked through the fire, as it were, of doing that training and got your unrestricted practising certificate, then that is in place. I was – and this is just a comment about my own naivety more than anything else – I was struck by the not extremely high barrier to opening up one’s own firm in that one of the elements here in New South Wales is merely a notification to the law society of; “hey, on or around date, and I think it must be more than 10 business days or more than two weeks after you submit the form, on or around date, I’m going to start practising. Or on or around date, this entity that I am a director and shareholder of is going to begin trading using this business name”. And having done that, then the dominoes start to fall. And I think then you’re reached out to by Lawcover that says; “oh, hi there, welcome to running a firm. Here are the sort of law cover requirements and you pay for your insurance and all these sorts of things”. There’s another element, which is the… oh my gosh, I’ve forgotten the name of it. It’s the thing on the bottom of all of our letters .And if I sound distracted… |
| 00:14:02 | DT | Ah! Liability limited by a scheme approved under professional standards legislation. |
| 00:14:09 | JD | David Turner, he knows what he’s doing, especially when he’s speaking to an inexperienced law firm owner, yes. I remember getting the first draft of my letterhead and being like; “oh, this sort of looks right, but for some reason, it just doesn’t feel right. It just doesn’t smell right, taste right”. And it’s because of that formula of words being absent. And so my recollection, David, that I’ll lean on you for a more detailed comment about is that it is on one view, a voluntary scheme, but that view should not extend too far. And it’s something you ought to volunteer, to the extent it is a voluntary scheme. David, I expect you agree with that. |
| 00:14:49 | DT | I think for anyone practicing below the scale of national or international practice with hundreds of partners, that’s probably a good idea. The limitation of liability scheme limits your liability for I suppose what we call professional indemnity insurance claims to $2 million, which is the cap on your professional indemnity insurance cover. So it’s helpful to have that limitation of liability so that whatever your liability is in the event of a professional indemnity or professional negligence issue, your liability does not exceed the amount that your insurance covers you for. I do remember practicing at a very large law firm. I had a bit to do with the general counsel in that firm, and it’s not really a secret. You’d notice this on any correspondence from some of these large law firms. They don’t include that statement on their correspondence. That’s because they choose not to opt in to the scheme. So as you said, it is a voluntary scheme. There’s a bunch of reasons why that might be. The level of insurance cover, perhaps coming out of an international policy out of Lloyd’s of London or something, might be well in excess of the AUD $2 million limitation of liability cap. They might not be concerned about it. There might be appearance reasons why if you’re acting for large ASX200 companies, why you don’t want to be suggesting to them that you don’t stand behind your advice to a tune greater than $2 million. So there’s a whole bunch of reasons why very large practices, acting for very large clients, might choose to opt out of the scheme. But for most of us operating in SME land, it’s a good idea, and a good idea to dutifully comply with the requirements for coverage of it, which includes having that statement on all of your external correspondence. |
| 00:16:20 | JD | Yes, it was a very quick addition to the to-do list, and one that I very quickly ticked off, as you might imagine, to say; “oh yes, that seems much more important than I’d previously understood before having it explained to me”. |
| 00:16:30 | DT | That’s right. And we might be jumping ahead a bit to the sort of business planning side here, but I remember when I did the practice management course, look, there is a lot about trust account compliance and making sure that you’re not doing the wrong thing there, probably for good reason. If we all remember our Graduate Diploma of Legal Practice to get our first ticket, there’s a fair bit of trust account compliance stuff in there. Again, for good reason. There is a little bit of business strategy or business planning in that course, but it’s a three-day course, there’s a lot to cover, and I think anyone contemplating starting their own practice probably needs to put more work into the business planning side, especially into the financial projections and having a really strong understanding of what they need to be doing in terms of performance to match the salary they once earned and meet their goals than is realistically achievable in that short course. Now, we’ve hinted at structure, choosing a structure for a practice a couple of times here. We’ve made some veiled remarks about incorporated legal practice, which is now a pretty popular way of incorporating. I take it Gravamen is an incorporated legal practice. |
| 00:17:33 | JD | Yes, I might just take you behind the curtain, David, just for full disclosure. I use a reasonably straightforward structure in that there’s a trading entity, the shareholder, which I am a director of, and I’m an employee of, and I am the incorporated legal practice person. So I’m the principal lawyer of, the shareholder in that trading entity is the trustee of a discretionary trust, and my family and I are beneficiaries of that trust. And so the way profits of the trading entity will be managed is they’ll be paid as dividends from the trading entity into the hands of the trustee for the trustee to then go and do, frankly, whatever the accounting advice tells me to go and do. And so the way I get money out of the thing is that I will be employed, I am employed by the trading entity, and I will be a beneficiary of the trust. And that trust’s corpus comprises dividends paid from the trading entity at the end of each certain set of time. Like whenever the accountant tells me to move some money around, there’ll be some money moving around and it’ll end up being kicked down the chain. The selection of that structure is for the two reasons we always select structures, David, but I think I just interrupted you to get to. Firstly, it’s that kind of reasonably tax effective kind of structure. I’m not a tax is bad type person and I’m a tax is good type person indeed, but there’s an element where, when the advice is presented to you, you say; “oh, well, nicer to have control of your affairs than otherwise”. And then there’s the asset protection question. I’m hoping that Gravamen doesn’t get sued for any reason, including, but not limited to professional negligence. I’m hoping there’s no reason for it to get sued and certainly no reason for it to be successfully sued, but of course disasters happen and this sort of thing. And so there’s that asset protection point that I’d want any grand failure of the law firm to not be slated home to me and my family. So asset protection and tax management, we’ve gone that trading company owned by trustee company type structure. |
| 00:19:41 | DT | Yeah, and that structure of the shares in a proprietary company being held by a corporate trustee of a discretionary trust, the classic structure for SMEs Australia wide, I’ve set up plenty of them myself. And yeah, it makes a lot of sense from a tax efficiency perspective. You distribute your frank dividends to the family members who sit in lower income tax brackets. Gone are the days that you distribute that to infant children, tax paying adults now, but still an effective way to spread your income between yourself and your partner, certainly. And that asset protection part of an entity that provides a service which could expose it to some liability, whether that complaint has any merit or not is always a good idea. |
| 00:20:23 | JD | David can I just linger before we leave this point? And you may encounter this in a lot of your advisory work. I don’t think I’ve seen ever, apart from older and more established firms, a partnership in the very technical and traditional sense, like the way you and I would define it, being used as a structure to set up a new entity. And it is very… |
| 00:20:41 | DT | Yeah, it’s pretty rare. |
| 00:20:42 | JD | Yeah, and it’s rare as well that I’d see, especially in my space. And perhaps this says more about practicing in corporate law than anything. It’s rare that I would see a sole practitioner indeed be a sole practitioner in the technical sense, i.e. I’m just Julie Jones. Here’s my business name and I’m trading as Julie Jones, Commerce Solicitor. It is more common in what I’ve seen that you’d operate under the umbrella of a structure similar to Gravamen, Is that your experience? |
| 00:21:09 | DT | Yeah, I couldn’t agree more. If there’s a pro in the pros column for operating as a sole practitioner without any kind of corporate entity there, I suppose it’s regulatory simplicity that you’re not doing any lodgements with ASIC, you’re not paying any regulatory fees, but those things are vanishingly simple, really, especially for someone like a solicitor is trying to do it. So I think the asset protection and tax efficiency benefits of a corporate structure really far outweigh operating as a sole practitioner. And then there’s the scale issue as well. If you ever want to operate in partnership with someone else, that classic partnership model, it does seem to be an accident of history wherever it is used. Very few partnerships actually want to operate a true partnership where each partner has an equal claim to the income and assets of the business. They usually want something more like a shareholding structure. So there ended up being complicated systems of unit trusts sitting alongside of the partnership associated with points and the points accrue income and asset rights. And it ends up being a much more complicated structure than just holding shares. |
| 00:22:12 | JD | Well, David, when you have clients come in to be like; “hey, David, I’ve got a partnership agreement I need your help with”. I expect what you find is you go; “yeah, yeah, let me help you draft this shareholders agreement” or the alternative, “let me help you draft this license agreement” in that when a client refers to partners, what they are referring to is either a co-owner or a service provider with a view to reaching a long distance into the future, like a valued person at another step along the supply chain. |
| 00:22:41 | DT | Yeah, I find it much more used as a title or a description of a commercial relationship than a description of a legal one. Even relatively well-established professional services businesses have started to move to the corporate structure, both for managing the ownership and income interests in the business, but the tax rate on retained earnings, even the concept of having retained earnings is useful in a corporate entity. If you think you might need a bit of rainy day money in the business, helps to be paying 25% tax on that, not whatever you’re paying at your personal tax rate, which is probably more like 45%. |
| 00:23:12 | JD | Hopefully, yes, that’s the goal. |
| 00:23:14 | DT | Yeah, exactly. So we’ve talked a little bit about, I guess all of the known knowns that you go into starting a law firm with satisfying the law society that you fit to do it, setting up the structure by which you’re going to operate. What were some of the unexpected challenges that came up as you were sitting at Graven? |
| 00:23:30 | JD | Yes, well, so long as we’re on numbers, there’s sort of a strange, like imposter syndrome humility point where as you alluded to earlier, David, you think about your financial projections and you meet with your accountant and you think about the income coming into the house of the other people in your house who earn an income and contribute to the family. And you come to this view of like; “okay, well, if we can just somehow scratch and scrape to X, then we should be fine”. And there’s an imposter syndrome element where you’re like; “look, hopefully we can get 75% of X for the first 12 months and then we’ll scrap and scrape and figure it out somehow”. Happily, and we may then get to the kind of business strategy discussion from this is that X, if you’re lucky, and if you’ve set X low enough, perhaps it’s both of those things combined, X can fall away and then there’s a bit of liberty to say; “okay, well, what sort of entity is it we’re running?”. And then this almost comes back to the we question of earlier of is this just a trading name for James to do a bit of law or is this a quote firm in a different sense that will be about enriching the careers of other lawyers who are invited to or choose to spend their time operating with it. And the pleasure I found is that I don’t have an answer to either of those questions. And I sort of don’t expect to for another one, two, three, four years to say, look, let’s just see how this thing progresses, whether it’s almost not quite coaching business, that’s a strange way to put it, but whether it’s me in a laptop or whether it’s fretting about office space and how are we gonna deal with the new demands of being engaged with the careers of a number of people, there’s no answer to that at the moment. |
| 00:25:17 | DT | Yeah, and I’ve known colleagues who’ve taken both paths, who’ve operated as sole practitioners under a ILP with a business name for many years and have really enjoyed the flexibility and the independence that comes with that. Similarly, it’s a heavy weight to bear, I think, to be responsible for the incomes not only of yourself but of the people you employ, but it can be very rewarding as well, both financially and otherwise. You’ve been fairly open about your business goals, I suppose, your goals with Gravamen on social media. I saw a post recently of your kind of back of the envelope goal setting session. Tell us a little bit about your goals for Gravamen, the ones that you have been able to crystallise or coalesce because some of those are not really about shoot to the moon, scale to a million million dollars a year in recurring revenue, right? |
| 00:26:07 | JD | That’s exactly right. Goal one, two, three, four, five, six, seven, eight, nine, 10 for Gravamen is the goal I alluded to earlier, which is it’s an entity that has to work for our family. And that also includes me personally, and I’m someone who has work ambitions and ambitions in professional life. So it needs to do that. The document you’re referring to, the back of the envelope has this line that says 80% or more of quote parenting is worth it. |
| 00:26:34 | DT | I do remember that line, yeah. |
| 00:26:36 | JD | And what that means for me is that I’m certain that it’s less than 80%, it’s probably closer to 50%, but it means doing almost literally all of the school runs, almost literally all of the sort of kitchen-y stuff and any, I’m not sure if you’ve read Eve Wrodsky’s Fair Play, David, where you work through the cards and you allocate tasks through the household. It’s trying to take responsibility for as many of those cards as possible. And so the real initial goal, initial and resonating and ongoing goal is it’s got to work for us. And if it doesn’t, then we can go do something else and that’s fine. If I dive into the sort of secondary and tertiary type goals, one of them was that sort of X dollars per month. And rather than being a bleak, I selected the amount of 10 grand a month to say what I want to see initially is the promise that this might be a kind of business where you see that amount come through the door and then 12 months on, I want to see that amount coming through the door. And then three years on, I want to see that amount coming through the door from sources other than my own blood, sweat, and tears selling my own labor. So using this magic made up number of 10 grand as a way of thinking about the business progressing. As I alluded to earlier, there’ll be some sort of jigging around with that number now, but the progression of the business and the goals I’ve got rely on it being enough quote pocket money to justify a proper part-time kind of job. that brings with it its own sort of stresses. And it looks like it’s doing that at the moment. And of course it’s more than part-time at the moment. But if we dive into those other sort of goals as well, a lot of them are administrative and I’m happy that those have fallen away. Setting up a PO box, I don’t know why it was the most baffling challenge. And I can’t even explain the steps as to why it was difficult. Even now I’m like, surely that only takes 10 or 15 minutes, but just imagine that took a thousand years David and that’s how long I felt it would take. And then various things like queries that I’ve got for myself about, look, are we going to do merch? Do we need the Gravamen umbrella to be flying around the place? Do we need the gravamen coffee cup? And I think the answer is not now. And if we do, it’ll be the Gravamen comfortable cotton jersey. I think that’s probably like the path we’re working on. So David, what I want is for you to be doing the gardening in about eight years time with a frayed old Gravamen jumper that’s too ugly to wear out, but it’s very comfortable and it’s become a trusted old around the house cotton jersey. That’s the dream. |
| 00:29:04 | DT | Yeah, sign me up for one of those cotton jerseys. |
| 00:29:07 | JD | But if I could extend on the goals question is because I’m not a goals person. I’m not a keeper journal person. I’m not a rocket ship emoji person. It was very casual sort of scribble. It was a very much a brain dump exercise setting these up. And the other thing I was thinking about in doing it was trying to list out what are the revenue streams that I want the firm to have. And stream one is selling James’s time doing legal work. That’s fine. And that’d be doing legal work directly for clients or doing legal work sort of white label, which is a term David, you’d be familiar with. Some people listening may not be, it had to be explained to me. That’s actually what I was talking about. Where essentially you’re a consultant for another law firm. So Blogsy Lawyers might be a great wills and estates law firm. And they might just want a really nice advice sent out in relation to corporate oppression. And so you might send out to Blogsy Lawyers a very good letter about corporate oppression and Blogsy Lawyers might stamp their Blogsy Lawyers letterhead on it and send it out to their client or send it out to whomever. So that’s sort of white label work. |
| 00:30:10 | DT | That revenue stream makes a lot of sense for you, I suppose, because you have this really strong following and social media presence in a network of lawyers with Coffee and a Case Note. |
| 00:30:19 | JD | And it’s sort of leveraging that. That is the plan for Gravamen. So another of those revenue streams would be, look, it’s not light years from Hearsay, would be recording CLEs ahead of time and saying “look, you can pay for this one hour video of me explaining something, you can pay for this reasonably detailed set of notes of me explaining this thing, or if you’re buying both together, it’s marginally cheaper or whatever”. So sort of prerecorded legal training stuff. Then another one, sorry, David, this is super boring, but they’re all at the top of my head. Another one is offering myself as like – I hate the idea of being a social media guru – but I’ve been approached by people who run law firms who are like, “hey, could you come in and talk to our people about using social media while also being a genuine practitioner on the tools?”.So rather than being like, “hey, everyone, hashtag blessed, here’s how you do a million Instagram reels”. It’s more like, all right, well, how does running a corporate practice of some size interact with being active on TikTok? And can you talk to us about how we might be able to use some of those strategies for ourselves and charging for that sort of time? And then the weird one, David, you’re not allowed to laugh, is potentially getting accredited as a mediator. |
| 00:31:29 | DT | That doesn’t sound unusual at all. That sounds eminently reasonable. I think a lot of senior litigators choose to add that to their practice. |
| 00:31:37 | JD | Yeah, I’m tossing it around. It feels very much like a, so this is growing up moment of like, if I then have to be the person in the room, being like, “okay, okay, I know everyone’s got strong feelings, but let’s all sit down and try to talk it through”. So hopefully using a bit of shareholder disputes expertise to say, there are brilliant Succession Act mediators going around. There are brilliant debt mediators going around and there are fantastic mediators for all seasons going around. I might be a slightly cheaper option who nonetheless brings a bit of weight to a shareholder dispute. So I see that sort of mid-level shareholder specific mediator offering being something worth thinking about. So they’re the kind of revenue streams I’m thinking for Gravamen, but of course we might just buy a coffee cart tomorrow and start slinging filter coffee at Saturday Sports or something like that. We’ll see how we go. |
| 00:32:28 | DT | That sounds pretty good, doesn’t it? You’re at that stage, I suppose, it’s so early in the practice that you’re setting these goals, you’re making these financial projections, especially when you’re talking about how much of my revenue is coming from what sources with a relatively limited number of data points. Maybe you’ve got strong data from your time in a different practice, but how well does it translate over when you start your own thing? And there’s these two schools of thought about forecasting, right? There’s the school of thought that says, “well, it’s a scientific process, you make the most accurate forecasts that you can, and you hold yourself to them and you use them as the art stick of your performance”. And then there’s the school which I subscribe to, which is that the only thing you know about a forecast is that it will be wrong because no one can predict the future accurately. But the process of making the forecast, that process of thinking out loud leads you to articulate and discover issues that you wouldn’t have without the process. So in saying, “well, what’s my revenue target going to be for two years time? Oh, that sounds quite high. How much of my own time would I have to sell to meet that? Oh, that sounds like a lot of time given my parenting goals, what other revenue sources could I introduce?”. And you start to have this conversation with yourself, a bit like the conversation with the rubber duck that reveals the problem to you. So I think forecasting is valuable even if it’s totally inaccurate in a strange way, because it’s that process of thinking out loud to yourself. |
| 00:33:57 | JD | Yes, and if I can build on that, there’s also that degree of, it’s not genuine accountability, but it’s ersatz accountability where you glance at your little piece of paper and go, “oh yeah, I really do need to set up that PO box”. Going back to that example of not merely storing it all in your own head and hoping you don’t forget, but doing that brain dump and making sure that you’ve got at least some command, some vague idea of the sort of direction we’re traveling in. |
| 00:34:24 | DT | We’ve talked a bit about brand and brand identity for Gravamen. The merch might be part of that, the comfortable jersey. And I wonder if some of the goals that you’re talking about are a bit of the brand as well. And I had a thought when I saw your sheet of goals that a referrer might see, a client might see that parenting and being part of the household responsibilities is a big priority for you as one of your business goals. Do you think that’s part of the Gravamen brand? Do you worry that there’s going to be some client who says, “no, I want a hard lawyer who’s going to spend 40 hours a day on my matter?”. Although I think a lot of clients take a pretty dim view of saying 40 hours a day recorded on their bills. Do you know what I mean? Do you think that’s a part of the brand and do you think it’s a positive or a limiting part of the brand? What do you think it does? |
| 00:35:11 | JD | I actually think all those things are true, right? Yes, I do think it’s part of the brand. Yes, I do think it’s positive. and yes, I do think it’s limiting. If I can come by and pick them all apart, I don’t want to have to do the thing where I pretend I’m spending six days a week in Phillip Street from 7 a.m. to 7 p.m. and hoping no one peeks behind the curtain and realises that I’m sitting here in my spare room on the central coast of New South Wales. I want to be able to wear that issue, wear that truth on my sleeve and not have to do the dance around. I mean, David, you and I initially thought we were meeting in person today at Castlereagh Street in Sydney CBD and I had to quickly say, “oh s**t, I’m two hours away and we’re meeting in five minutes. Can we do it by Zoom?”. And I don’t want to feel uncomfortable about that to then say, “oh David, I’m so, so sorry. Normally I’m in the city all the time and these sorts of things”. I want clients at the firm to know who they’re getting in business with rather than receiving a nasty shock perhaps three or six or nine months in when they feel, deceived is perhaps not the right word but when they feel that there might’ve been some deeper truth concealed about what my priorities are. And so that then leads to the limiting issue that you highlight rightly. In these shareholder disputes, you get the line of “I’ve heard it once, I’ve heard it a million times”. I’m like, “oh, I want someone tough. I want a bulldog. I want all this”. And it’s like, “yeah, well, best of luck. Plenty of other firms out there and they probably charge less than I do in any case”. And so there’s that element where I am limited. We are limited, apologies. We are limited for clients who have values that say, “if you’re not available at your desk, then that’s a problem for us”. And on that sort of position, I’m very happy to say, “great, best of luck. Plenty of firms out there for you”. And then this comes to the positive element where I’m then able to have fairly frank discussions. And when I’m onboarding clients, I’m able to say, “hey, look, I can find someone cheaper who’s almost as good as me. I can find someone cheaper who’s more available than me. And I don’t want to trick you into getting into a relationship with me by me pretending to be someone I’m not”. So there’s that real liberty in being able to be very upfront with the position. And what that means is a number of things. Firstly, it means you’re acting for clients who get you and who understand the way life works and the way your life works. Secondly, perhaps unluckily, there are times I was sending emails to 1:30 last night and sometimes that’s just the life you’ve chosen because we went to touch footy training during the day and because school holidays. And school holidays is a time where any parent’s sanity is brought into question. And so striking that balance is still there, but being able to be honest and forthright about it is important. And so I’m certain work is lost genuinely, but it leads back to the quality of the work that is obtained is that anything that does come in, anyone who’s doing their diligence on me and says, “don’t know how I feel about this guy who values parenting”. I’m like, “great, see you later, best of luck”. And the opposite can be true as well of someone who says, “oh, we’ve got this corporate lawyer who says parenting is the most important thing. I might grab a coffee or yeah, look, I’ll hop on a call with him and see what I feel about his view of the world”. And so that’s the position I wanna get into. It then leads on to really nuts and bolts things like hourly rates. So if I’m gonna be away from my family, I wanna be compensated for that. And I’m not gonna take a step away from my family unless I am compensated for that at a rate that I consider commensurate with my expertise. And so by setting out those values so strongly, I can double down on them by saying, “look, this is the value I place on that time with my family. And if you don’t place the same value on it, that’s fine”. Because a lot of lawyers hourly rate is to an extent an opportunity cost, right? Like what are you paying me to do your stuff rather than to do something else that I might’ve otherwise wanted to do. And so it crystallises our minds here at Gravamen, all of our collective minds. And it enables us to march on towards those really primary goals of making sure when we’re with our family, we’re present. And then when we’re doing work for clients, we’re doing work for clients we’re excited to act for. |
| 00:39:31 | DT | Absolutely, well said. I think to the extent it’s limiting, it’s probably a blessing in disguise. We’ve all had that experience of acting for a client that you wish you didn’t have, that you wish you had a reason to fire. Maybe people don’t want to admit that they’ve been in that position, but everyone has. And the sooner you have that client that shares your values and that you feel that sense of sympathy with, I think practise life gets a lot better. I also wonder, it might not be all that limiting. I remember having a conversation with a client when I was at the bar actually, very similar to the one you just described, having someone come in and say, “I want someone hard, I want to make life difficult for this person. I want to cause them a bit of harm”. And I remember saying to them, “well, if that’s your goal, then you probably shouldn’t instruct me because that’s not what I do. You’re here asking me to help you with this damages claim. I want to make sure that you’re adequately compensated for the actual harm that you’ve suffered, but no more than that. And there’s no reason for us to harm someone or cause someone inconvenience just for the sake of it. That’s not what we do”. And that person, I don’t think actually wanted to do that. They felt that maybe because of their experience of legal practise in media, that’s how they were supposed to behave. And very quickly walked away from it and said, “oh yeah, of course, no, you’re right. We shouldn’t do that. Let’s just be commercial and sensible”. And we had a good working relationship, but setting that boundary and making that value clear early on made that possible. I think if you weren’t open with your clients about your values and you just said, “oh, absolutely. I also want to harm this stranger that you instructed me to sue…” |
| 00:41:03 | JD | “They sound awful. Let’s get them”. |
| 00:41:05 | DT | You sound awful. They sound awful. Everyone’s awful in that scenario. So look, maybe it’s limiting, but I hope that the class of people who look at that aspiration and look down on it is very small. |
| 00:41:16 | JD | But it’s also a risk management point, right? Of like, I don’t want to have to wear a mask in legal practise in part because the wearing of the mask is exhausting. And luckily I’ve managed to more or less completely take mine off five or six years ago. And I suspect that mask metaphor is something you might be able to empathise with. David and any number of people listening might also be able to empathise with. But not only is it tiring to keep on, there’s that cognitive dissonance you manage. You’re managing a risk with a client. Often matters I’ve got going for three, four, five years of nine months into a matter, taking it off and then being like, “oh, is that the real you?”. And so things like being quite forward about my values and lowercase “p” politics about what I think about a number of things, are things that I try to wear pretty assertively on my sleeve. So that anyone who wants to jump into bed with me, if they have different views, well then that’s fine. I’ve got friends on both sides of the aisle. If they have different views and it’s a problem, then they’re not going to instruct me in the first place. Or if they have different views and they’re happy to deal with someone who has a different view of the world, then that’s fine as well. But we’re sort of getting off on the footing of understanding each other rather than on the footing of me trying to be the most vanilla person I can. Because not to over egg the pudding – and apologise for that sort of custardy, vanilla-type doubling down on the metaphor. But if we’re going to start worrying about things like AI, what AI can make is the best vanilla of all time. And so whatever the marketing metaphors are about finding the deep blue ocean or being the purple cow or whatever it might be, AI is not as big of a threat to that as it is a threat to, “don’t worry, I’m the most normal version of normal there is and there’s no one more normal than me”. Well, there’ll be nothing more normal than AI over time. And so the question is, how do you go about it versus how much do you feed into preconceived ideas about how others used to go about it in the past? |
| 00:43:16 | DT | Absolutely, and I wish we had more time. Maybe we need to get you on the show again, because I’d love to talk about your thoughts about where AI will fit into legal practise, how it might affect the way you practise, the way I practise, the way we all practise, but we are nearly out of time. Before you go, I wanted to ask you what I usually ask our guests, if you had one tip for someone thinking about starting a practise, going out on their own like you have, what would that one tip be? |
| 00:43:40 | JD | I think 80/20, you will never be in command of all the stuff you need to be in command of. And you ought to start and be kind to yourself. The number of “oh f**k” moments I’ve had already 12 weeks in, I mean, I’d been in practise for a couple of days when I realised that I didn’t have any word processing software, because I was relying on the Microsoft Word that I had installed on the laptop that of course I’d returned to my former firm. And so I had to do, “oh f**k, how does Google Docs work?”. Or “oh f**k, like how does getting your own website work?”. There’s that element of just starting and being kind to yourself where you realise there’s a step you’ve missed or there’s something that in an ideal world you would have done. So the advice I’d offer is that you will know whether it’s the right thing for yourself, but if you are gonna take that leap, it’s good and fun. And also there’ll be things you stuff up and things that make you feel foolish and all that sort of thing, but you just need to be in that 80/20 frame of mind of you will get it on the next one and you’re continuing to refine. So be kind to yourself and it’s worth it. |
| 00:44:50 | DT | Couldn’t agree more. Well, James, thanks so much for sharing your successes and your mistakes over the last 12 weeks. Best of luck with Gravamen and thanks very much again for being on the show. |
| 00:44:59 | JD | Delighted to be here, David. Thanks so much for having me. |
| RD | As always, you’ve been listening to Hearsay The Legal Podcast. I’d like to thank our guest today for coming on the show. If you’re an Australian legal practitioner, you can claim one continuing professional development point for listening to this episode. Whether an activity entitles you to claim a CPD unit in a particular category is, as you well know, self-assessed but our suggestions for this episode of Hearsay can be found on our website. Hearsay The Legal Podcast is brought to you by Lext Australia, a legal innovation company that makes the law easier to access and easier to practice, and that includes your CPD. Hearsay is recorded in Sydney on the lands of the Gadigal people of the Eora nation, and we would like to pay our respects to elders past and present. Thank you for listening and see you all on the next episode of Hearsay. |
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