In part one of this three-part series, I wrote about young lawyers who think it makes sense to do residential real estate to generate cash flow when they launch a new legal practice, with a view to ultimately developing a practice in a different area of law.
I have heard this idea many times. I am not a fan.
For example, I recently spoke to Joan, whose passion is doing wills and estates work for individuals with complex situations. She told me she is planning to advertise her new practice doing wills and estates and residential real estate, and perhaps some incorporations as well.
Before that I met Bill, an experienced corporate lawyer who intended to do residential real estate until the corporate work started coming in.
And then there was Susan, a wannabe corporate lawyer who started doing residential real estate and wills and estates three years ago, while waiting to get established in the corporate world. Last I heard, she was still waiting.
There are a number of practical reasons why starting with residential real estate — when you really want to do something completely different — is a bad idea. For now, let’s focus on one general concept.
For the sake of illustration, let’s talk about Joan, who got it into her head that the path to having a wills and estates practice runs through residential real estate.
If Joan wants to have sophisticated wills and estates clients, she has to be seen as specializing in wills and estates, which means she must get referrals from people with some level of sophistication. I allegedly have some level of sophistication, and I sometimes refer wealthy people to lawyers to have their wills done, so let me tell you how I look at things.
If someone were to call me looking for a wills and estates lawyer and ask me what I thought about Joan, I would go to her website. The moment I saw that she did both wills and estates and residential real estate, I would tell the potential client that Joan is likely not a specialist in wills and estates and that they should look elsewhere. No referral for Joan!
It may not be fair, but that is how I, and I suspect many others, think.
Now, I should say that my attitudes were formed in the Big City. I am well aware that in smaller towns lawyers often have more general practices, and that such generalization is more accepted and respected than it is in the Big City. But Joan, Bill and Susan are all trying to make it in the Greater Toronto Area, and doing residential real estate is not a good look for them. Those are the rules. I didn’t make them.
As for my argument that there are practical reasons that starting with residential real estate is not a route to success in some other area of practice, I will make that case in the next and final article in this series.
This article was originally published by Law360 Canada, part of LexisNexis Canada Inc.