I had to let my employees go from the law firm. It was sad, but it was many months in the coming. I was working on a very narrow set of cases knowing that once we won, our firm's income would be cut to zero. I saw the signs of success for my clients a few months ago, but it wasn't until recently that the cases were coming to an end.
Now there is a bit of tying up to do, but we've been on a negative cashflow since July, but the hope was that by the time the firm ran out of money, we would have found a new stream of income. The problem was that I was spending all my time working on the cases because our clients paid us up front knowing that it would be many months before the case would be over, and I wasn't exactly in the mood to nickel-and-dime my clients to death like most lawyers who charge by the hour do. Plus, we were contractually bound for me to represent them for this set fee until their matter was complete, so we've essentially been running on fumes (everything took much longer than I expected it to), time has run out, and our firm is out of cash.
So it is only me again here in the firm. It's so lonely, and my motivation has dropped to zero. It is so disheartening to know that my "wave" is over, and to catch the next one will take months, maybe years of work. I am having such a difficult time calling current clients about new matters and following up with new inquiries, not because I don't have the time, but because I don't have the emotional energy or strength to stand up and start again. I'm burned out from the marathon our firm just ran these last few years, and I can't stomach starting again...but that is where we are.
I started the firm having six months of basic expenses to keep the family running, and I hit the ground running with enthusiasm. It was my dream to own my own firm and to work for myself. Now two years later, I still have six months of salary, but we are no longer on scholarships from the school, the school loans are no longer on deferment, taxes are through the roof from all the legal fees the firm made earlier in the year, and we now have FOUR children in yeshiva, and we are paying full tuition for each child. Our baseline of expenses is so large now, I break into sweats every time I think of the "minimum" amount of money I will need to pull in each week/each month just to keep afloat.
So with all this, I'm paralyzed emotionally -- I cannot work, and I cannot move. Even though we succeeded in what we accomplished to do knowing that it will kill our business if we succeeded, our business died as a result of our clients' success, and now it is back to the drawing board for our firm. It's not completely over, but no new clients are coming in because they are "standing on the shoulders" of the work we did for our older clients. We purposefully killed the market which fed our families because it was the right thing to do. I just can't pick up a pen now without wanting to cry, so I distract myself just so I can get the day to pass so I can go home, put the kids to bed, and then go to bed myself only to participate in this cycle again tomorrow (until I gather the strength to stand up and start again).
To add to this -- my wife is compassionate for my circumstances, but I don't think she really understands the huge amount of stress I am feeling from our firm running out of steam. I think she wonders why can't I just stand up and do this again. Why can't I just hit the ground running once more? Why can't I find a new niche and run with it, while still looking back and servicing clients who have already paid me from my old niche?
The problem is that my heart is not into it this time. I've been successful, and it took much more energy to be successful than it does to be poor. Life is not that much more exciting when you're rolling in the dough, because everything becomes more expensive. I was pleading with everyone around me to continue living small because this wave of success the law firm was experiencing could not go on forever. I wanted to save for today, and today is here. I'm jaded that we are back where we started, and now I am older, and I have more expenses, and my family has become accustomed to living bigger. Now it hurts to tighten our belts, and with a maid that comes to clean almost every day, expensive health insurance which just keeps getting more expensive, and everybody always wanting more money, it's a spiral and I don't know how to get out from underneath it.
How do I justify telling my wife that she can no longer have the maid, and that we need to drop our health insurance and stop buying as much food just to survive?
The problem is that my heart is not into it this time. I've been successful, and it took much more energy to be successful than it does to be poor. Life is not that much more exciting when you're rolling in the dough, because everything becomes more expensive. I was pleading with everyone around me to continue living small because this wave of success the law firm was experiencing could not go on forever. I wanted to save for today, and today is here. I'm jaded that we are back where we started, and now I am older, and I have more expenses, and my family has become accustomed to living bigger. Now it hurts to tighten our belts, and with a maid that comes to clean almost every day, expensive health insurance which just keeps getting more expensive, and everybody always wanting more money, it's a spiral and I don't know how to get out from underneath it.
How do I justify telling my wife that she can no longer have the maid, and that we need to drop our health insurance and stop buying as much food just to survive?
7 comments:
Of course your heart isn't into it this time around. You shouldn't let the counter drop back to 0. Each wave should be an iteration that leaves you a little better off than the one before. Next time, don't let your expenses drop down to six months of living expenses. Set your baseline at a year. Also, can you talk to your wife about cutting back expenses (especially the maid service)? Six months is not a lot of time. As you yourself said, the next wave might take months or *years.*
You are running your own business, which means that you need a MUCH larger cushion than the "ideal" 3-6 months that the rest of us need. I get 6 months unemployment if I get laid off. That, along with six months of expenses, gives me about a year. You need *at least* a year's worth of expenses in the bank.
Have you and your wife discussed finances with your marriage counselor? You need to be on the same page.
check out dave ramsey and his website/radio show. He saved our business and marriage 10 years ago. His financial advice is not cutting edge, it's just old fashioned common sense with lots of motivation. YOu may have to ask for some scholarship for your kids' tuition right now. Hatzlacha. BTW, this is Obamacare in action...designed to cripple small business as we are the wicked capitalists. As you know, this too shall pass.
I listen to the Dave Ramsey podcasts myself. The one thing to be aware of is that he's coming from an evangelical Christian point of view. It's good sense... but you need to be able to look past the occasional Christian bible verse.
I believe that I posted previously, many posts back, about this being a wave that would be limited. Best wishes to you in finding another niche that you can provide services in and which will reward you just as well. have you considered either hiring on someone with a business degree and/or taking a side course in entrepreneurship? Either would prove useful and also spare you the pain of having to fire people once they are under your employment. Best wishes, and happy holidays to you!
I know it has been a while since you have all written your comments, but I've been working on reinventing myself and my firm. My wife and I ended up going on a strict budget, and we've been living off of savings while I figure out how to "reboot" my firm. Income has pretty much gone to zero, so I feel like I'm struggling here, but I'm sure everything will be okay.
I know you like having your own firm, but would you consider going to another firm as an assoicate or partner if you're not able to find a way to reboot? You have work experience now, and successful experience at that, so getting hired somewhere should be open if needed.
Hope things work out. :)
I would consider it, but I don't know who would hire me, or why. The firm is back to doing well -- certainly not at the levels they used to be, but enough that I can go to my office each morning, and come home with a paycheck that will pay our bills and our kids yeshiva tuition. We're doing okay.
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