A Brief List of Financial Resources for Solo Practitioners and Small Law Firms
The coronavirus slump is officially here. Revenue for law firms has already taken a hit, and the layoffs, furloughs, and pay cuts are coming daily. There is, unfortunately, no expectation that the economic situation will improve dramatically in coming months.
For solo and small firm attorneys, questions about viability moving forward are becoming pressing. Below is a brief list of options for solo and small firm attorneys looking to survive in the coming months.
The CARES Act and SBA Loans
This CARES Act provides $376 billion for small businesses. The U.S. Small Business Administration can help small business owners in a variety of ways:
- The Paycheck Protection Program, which provides loan forgiveness for small businesses which are able to keep employees or quickly rehire them. The U.S. Chamber of Commerce has a summary of eligibility requirements and details.
- The EIDL Loan advance, which provides up to $10,000 to businesses experiencing temporary financial difficulties. It does not have to be repaid. These are not new, but under the CARES Act they are now available to businesses in all states and territories.
- SBA Express Bridge Loans, for businesses who already have a relationship with an SBA Express Lender. It provides up to $25,000
- SBA Debt Relief, which offers forgiveness for existing loans, including 504 loans and microloans.
Banks are still working on providing loans under these programs.
Federal student loan payments have also been automatically deferred until September 30. If you can continue making payments, all payments will go toward the principle balance. Commercial student loans are not covered under the CARES Act, however, so you would need to contact your lender to discuss reduced payment plans and deferments.
Another option if you are looking to keep incoming revenue, and not just cut costs, is to offer clients litigation funding options. Doing so isn't for everyone, but the ABA has approved their use under certain circumstances. For obvious reasons, lawyers cannot have an ownership stake in the third-party lender. There are several options out there, so you can do some research on which may be right for your clients.
Reducing overhead may be more easily available for small firms and solo practitioners. Getting out from an office sharing arrangement, for example, or doing your own accounting and bookkeeping may help. FindLaw offers free legal research if you are looking to save money there. There are also several free CLE opportunities available. You get the idea: Get creative and save money wherever possible.
- Is Now the Time to Implement Payment Plans At Your Law Firm? (FindLaw's Strategist)
- 52 Ways to Reduce Overhead in Your Law Office (FindLaw's Strategist)
- Succession Planning and Law Firms: Are You Covered? (FindLaw's Strategist)
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.