Running your own law firm typically comes with long hours and unpredictable cash flow. As a sole proprietor, your personal time, energy and ambition are what separate you from the competition.
Self-discipline and a love of competition were nothing new to attorney Phil Karasik, a former tennis pro.
But little could prepare him for running a small business with fellow attorney and wife of eight years, Dini McCullough. In 2002, they opened Karasik & McCullough LLC, a general practice law firm in Bethesda, Md., a suburb of Washington D.C. They soon found that work-life balance can be a struggle for an independent firm, and that without a steady flow of reliable clients, money can be tight.
In the early stages, McCullough took on a heavy caseload and Karasik, who has a graduate degree in financial management, handled the business and accounting.
However, in 2004 McCullough gave birth to their first child and took time off to care for him. Karasik then had to tackle back-office tasks and take on the primary client-facing role. Eager to grow the business and help care for their newborn, Karasik made a common mistake among young attorneys: He took on unreliable clients.
“We were pretty green and gullible, and many clients didn't pay their bills and left us to cover their costs with only the deposit we had asked them to put down,” Karasik says. “The temptation is to take the work that's right there in front of you because you never know when more work will walk through the door. But some cases are more trouble than they're worth.”
Karasik quickly realized that unreliable clients meant unpredictable cash flow.
“There were some months when we came limping across the finish line,” Karasik says. “Other months, the numbers looked OK, but in the back of my mind, I was always thinking, ‘What if no one pays? What if the phone stops ringing?’”
Things seemed to get even tougher when the couple found out they were expecting a second baby and that the landlord sold the office space they were leasing. Money was still tight, but Karasik’s luck changed when he refocused his energy on networking.
Catching a break
After Karasik moved his firm closer to the courthouse in Rockville, Md., attracting more lucrative clients and meeting other legal professionals became easier. One day, Karasik ran into a judge he had met years before and explained his current situation related to work and family. Soon after this conversation, the judge sent Karasik his first court-appointed case.
Many attorneys shy away from court-appointed cases because their time frame is unpredictable. Additionally, court appointments often include thankless tasks such as disposing of property divorcing couples leave behind and managing finances for incapacitated individuals.
Nevertheless, these cases provided Karasik with reliable revenue and time flexibility. He was guaranteed payment for every case and often received commissions from cases that required him to sell property as part of his role. He also spent much less time in court than with private cases, which was great for work-life balance.
Today, Karasik’s firm takes on a 50/50 mix of private and court-appointed cases and revenue is growing steadily. Karasik and McCullough manage up to 50 cases at any given time.