How to Build a Law Practice Incubator


Kim Lowe, a shareholder at Fredrickson & Byron, has been thinking a lot about what an “incubator” — sort of a Y Combinator — for new lawyers would look like. We talked (excitedly) about it a couple of weeks ago, and the following is what came out of that conversation.

Outline of a Law Practice Incubator

An incubator would have to be owned by seasoned lawyers willing to invest both money and time. Unlike a regular corporation’s shareholders, these investors would have to invest with the understanding that they might see little or no monetary return. Instead, their investment would go to salaries and overhead.

Salaries for new lawyers, that is, who could not agree to spend a year or three in an incubator without compensation. And it might take years for the incubator to clear a profit, since new lawyers are not generally very profitable, and since they would need some clients. In order to get clients, the incubator would probably have to do two things:

  1. Build a reputation for quality legal work.
  2. Charge less — or charge in a way that is more affordable.

It could get a jump start on #1 by bringing on seasoned lawyers with solid reputations in the community. Clients would be more willing to be guinea pigs with seasoned lawyers taking responsibility for the work product. And by charging less, or allowing installment plans, deferred fees, or contingent fees, the incubator would probably attract clients who balk at paying a typical lawyer’s fee.

The incubator would need to generate a steady stream of new clients, because there is no sense incubating practices if you send the lawyers off into the cold, hard world without any clients. It would need to let them take clients with them when they leave the incubator. Ideally, an incubator would partner with tech-startup incubators, business schools, co-working spaces, low-income non-profits, and other organizations where lots of people who need legal help at a discount tend to gather. An incubator would increase access to justice through partnerships with low-income non-profits, too.

To make all this work — to ensure that the potential for profit is not purely theoretical — the incubator would also need to build in automation. In other words, it should develop a forms resource, over time, for everything from intake to complex transactions. The system should be smart enough to integrate new information with existing forms so that the database constantly gets better. This should be embedded into the procedures of the incubator, so that new lawyers don’t just get mentoring, but a head start on everything they work on. It must be easy to use, obviously. Graduates of the incubator should be able to access the system after they graduate, with at least several years of free access.

Speaking of graduation, the incubator should last at least one year, but perhaps as long as three — about the time it takes a lawyer to become a useful junior associate at a big firm. Because one possible reason for an incubator to exist is to replace the existing associate system at big firms, the clients of which are no longer particularly enthusiastic about paying for new-lawyer training at six-figure salaries. An incubator could potentially outsource this big-firm function.

Or, it could prepare lawyers for solo practice (or small-firm practice, since participants are likely to meet people they want to partner with during the program). Whatever the objective, participating lawyers should be given an education in the business of law, as well. They will need to learn to keep time, send invoices, balance trust accounts, conduct intake, and get clients. It would need to prepare them, in short, for law practice.

Incorporating an Incubator

That is all well and good, but it does not sound particularly profitable for shareholders. In fact, there are a lot of business ideas that are more beneficial to the public — or segments of it — than to shareholders. That is why Lowe is heading up a bar association committee that is drafting legislation to create a new form of corporation: a public benefit corporation.

Also called a “B corporation,” the idea is to enable corportations to operate with an objective other than just maximizing shareholders’ return. Essentially, a B corporation protects the directors and officers from liability if they spend profits on a benefit specified in the founding documents. Investing in new-lawyer training, for example, instead of maximizing revenue. Paying higher-than-market-rate salaries. Donating 5% of net income to affordable housing advocates or independent breweries. (In Minnesota, at least, “public benefit” is defined as “a net material positive impact from the business and operations of a general benefit corporation on society, the environment, and the well-being of present and future generations.” Pretty much anything, in other words.

In addition to making it easy for B corporations to contribute to a public benefit, the legislation would make it easy to hold them accountable. A shareholder needs only one share to have standing to sue a B corporation for failing to serve its specified public benefit. (Some states that already have a B-corporation statute have a higher threshold.)

The idea is not new. There is actually a national non-profit, B Labs that promotes B corporations, and 20 states already have B corporation laws on the books.

What gets Lowe excited is the idea of facilitating the creation of a “model” B corp, especially one that benefits the legal community and increases access to justice. Hence the incubator idea.

If Lowe is able to start the incubator she envisions, it certainly would not be the first. Law schools like IIT Chicago-Kent College of Law, Brooklyn Law School, CUNY School of Law, and plenty more are building their own incubators. But school-sponsored incubators don’t necessarily need to make a profit. Lowe’s work on B corporations may help launch a new wave of private incubators — or at least one good one in Minnesota.

Featured image: “Chicks” by Michael Jones is licensed CC BY-NC-SA 2.0.


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  • static

    How to start a successful law practice:
    1. Start a successful law practice.
    2. Undercharge all the other new lawyers who are already trying to start a successful law practice.
    3. Bring in new lawyers and pay them to manage the successful law practice that doesn’t make a profit.
    4. Let them go off on their own with the clients of the successful law practice based on the model of not making a profit.
    Sounds like a really cool plan.

    • Why do you hate access to justice?

      • static

        I’m just a hater. You know that.
        Besides, if it was that easy, everybody would do it.

      • Guest

        Why invite comments if you cannot accept another person’s view?

        • Your humor detector is broken. Might want to get that looked at.

        • static

          He’s very mean to me, that Sam. Off line, he calls me bad names too. People think he’s such a nice guy here just because he pretends to be nice, but he’s really mean. You saw right through that nice facade and recognized immediately how he ridicules me because he can’t accept my view.Bully. That’s what he is. A big, old meanie. And he’s probably try to blame you, with some lame retort like your humor detector is broken. Typical mean bully.

  • The Chicago Bar Association has a B Corporation like law firm incubator called the Justice Entrepreneur’s Project. – From my understanding they attempt to make it as much like starting a small law firm as possible, including charging overhead expenses like rent so that these solos that are pursuing social justice get a taste of what it’s like to start a law firm, while having guidance from the Chicago Bar Association and a support network of their peers. It’s basically a law firm start up, with structured mentorship, networking and a peer group of resources.

    • cmalloy1

      Thanks for the attention to the JEP. I’m pretty excited to be a participant/incubatee. It has shown to be a great program so far, with even greater potential.

      • No problem. I would like to see bar association’s across the nation follow in the Chicago Bar Association’s foot steps. I think teaching and guiding recent law graduates towards a path of entrepreneurship should be a valid and promoted path after law school with adequate preparation and mentorship. The bar association is a perfect partner for a solo / small law incubator.

        • Jack Roberts

          Thanks for link to the CBA program. The B-Corp is an interesting approach that could work. The Minnesota Legislature may consider B-Corp legislation during the current session.

  • Paul Spitz

    Seems like this is something a law school should spearhead in its community, drawing on its local alumni for mentorship. Ideally, it would replace the third year of law school, which is a waste of time, but law firms are too dependent on that $50,000/student in tuition to really change their curriculum.

  • Jonathan Stevens

    Excellent post, Sam! Thanks for sharing this one!

  • cmalloy1

    Solid post. Thanks for the read!

  • Interesting idea. We have the brewings of an incubator happening at New Law Business Model. It’s a different model than what you’ve described. We give law students access to everything we have for a low, monthly, affordable investment. They can keep that low investment until up to 3 months after passing the bar. Build in co-counsel for their first three cases (which is part of what we are still working on figuring out) and they should be profitable within their first 90 days if they study our trainings while in law school as just another class. Curious what you think of that.