I began my law practice with a friend in 1980. We handled any case that came in the door. Mostly, we represented indigent defendants in criminal matters. By the end of 1984, my law partner left to go into politics, and I decided to move into the plaintiff’s personal injury field. I took out a small ad in the Yellow Pages and began to build up a decent inventory of cases. The revenue was better than I was getting for trying criminal cases, and I didn’t have to go to jail every week to interview clients.
That continued until 1989 when my law partner returned. We decided to increase our Yellow Pages advertising, and before long we were spending about $125,000 per year. In addition, we began advertising on cable television. The results were good. Our revenue increased, but we had to hire more staff to manage the caseload. That increased our expenses. Good legal assistants don’t come cheap. As a friend of mine once said, “I would like to hire another paralegal, but I can’t afford it. I’ll probably hire a new associate.”
Around 1990, I had gotten to know a number of chiropractors in our area. Chiropractors are the gatekeepers in the PI field. They get most of the car accident victims, and then refer their patients to personal injury lawyers. As a result, I built up a large caseload of chiropractic cases. Unfortunately, many insurance companies are skeptical of chiropractors and chiropractic treatment and are less likely to pay money for pain and suffering when all the patient’s treatment has been with a chiropractor. Insurance companies often terminate payments for chiropractic treatment while the patient is still treating. That means that the chiropractor will want to get paid from any eventual settlement, which reduces the amount that goes into the pocket of your client.
This piece is not meant to be a treatise on working with chiropractors, but it is relevant to why I eventually got out of the high-volume personal injury practice and moved into arbitration and mediation.
To process a high volume of cases, I needed to have several paralegals. Payroll costs were an impediment to profitability. What is more, thanks to referrals from chiropractors, at least 75% of my clients spoke little or no English. That meant that everyone in the office, from the receptionist to the legal assistants, needed to speak Spanish, which was the language that most of my clients spoke. Bilingual legal assistants command a premium over those who speak only English.
The end result of all this was an increase in my overhead expenses to an unsustainable level. I know that lawyers all across the county face this same situation, and many have figured out a way to make it work. Unfortunately, I never did.
One of the ways that many personal injury lawyers are able to manage a sustainable practice is to have a mix of high-volume, low-margin cases, as well as some larger cases. I assumed when I started out that if I handled enough of the smaller cases, I would get referrals for more serious cases from either the chiropractors I worked with or from past clients who later had to deal with a more serious situation. That did not turn out to be the case. My experience was that I had a low level of repeat clients. I also had a low level of referrals from past clients to friends and family.
All of this is to say that for at least 20 years I handled a lot of cases, employed a lot of people, but didn’t enjoy the profitability that I had hoped for. That’s not to say that there weren’t years when I settled or tried a number of large cases, but those years were the exception, rather than the rule.
Everything changed 20 years ago, exactly halfway through my 40-year career. My law partner and I split up, and neither of us was interested in continuing the large advertising investment. We canceled the Yellow Pages ad, the Spanish Yellow Pages ad, and the TV commercials.
I had been doing a small number of arbitrations and mediations every month for around 10 years, at that time. I began to let my colleagues in the personal injury and insurance defense business know that I was transitioning to become a full-time neutral. It worked. I began to get more and more requests to serve as a neutral. Because I had so many personal injury cases to wrap up, I could not reduce my staff for about five years. Eventually, I was able to help my staff transition to other positions, either with law offices or, in one case, a state bar organization.
I also found that I didn’t need an office. I held hearings at the offices of one of the attorneys on the case. That brought my overhead expenses down substantially. I have a working relationship with an attorney colleague—someone I had shared office space with—to put my name on the door, collect my mail, and provide me with limited clerical services.
That’s how it’s been for the past 20 years. Until the COVID-19 pandemic struck, I was as busy as I wanted to be. Since then, business has been slow and has taken place on Zoom. Things seem to be picking up as I am writing this. I maintain an ad in two bar association publications, just to keep my name out there.
Not having the pressure of supporting a staff and paying rent on enough office space to house them has been a great relief. Also, I am pleased that friends and family still call me to handle personal injury and other cases from time to time. After spending a small fortune on advertising for 20 years, I can report that virtually all of my “big cases” over the years came from personal referrals and not from advertising.
All in all, switching from a high-volume personal injury practice to a full-time arbitration and mediation practice has been the best thing I have ever done.
About the Author
William Gibson has practiced law in the Portland, Oregon area since 1980, and has worked as a full-time neutral since 2000. He is a former chair of the ABA’s Law Practice Division.