Taking on other attorneys as subtenants can be a great way to defray your firm’s operating costs, and it can even give you a little help in building your practice. Currently, I have three subtenants. One has been with me for nine years, another for five years, and the third for two years. Here are a few things I’ve learned over the years about finding good subtenants and structuring your agreement with them.
- There is nothing more permanent than a temporary situation. My relationship with my subtenants is quarterly. Neither you nor they want a long term lease. I have found that attorney subtenants will stay with you practically forever, if you provide an office environment that makes a nice appearance for their clients, and you are nice to the subtenants.
- If you have more than one subtenant, I recommend that the rent be the same for all the subtenants. When I interviewed prospective subtenants in the past, one or two wanted to negotiate the terms. I told them the rent is the same for all, the terms are the same for all, and that there were not going to be any secrets between me and any of the subtenants. I even told them they were welcome to confirm those facts with the other subtenants, which, to my knowledge, they never did. The moment you provide different terms, you create a caste system, which usually leads to ill will by one subtenant towards you.
- I recommend that you pick subtenants that bring value to your practice. For example, one of my subtenants does an extensive amount of oil and gas work, which is a big deal in Texas, and so it is nice to team-up with him on certain matters.
- I would not be afraid if the subtenants do some estate planning or probate work. Two of my three subtenants do small estate plans and very simple probates. If a matter is more complicated than that, then they usually refer the business to us.
In my next post, I’ll talk a little about what has worked for me in terms of managing an ongoing relationship with attorney subtenants, and the approach I’ve taken when it comes time to sever ties.
About the author: Stephen A. Mendel is a trial, real estate, business, and estate planning/probate attorney in the Houston, Texas area. Mr. Mendel has over thirty-four (34) years of business experience, over twenty-three (23) years of legal experience, and has maintained his own private law practice for the past sixteen (16) years. Mr. Mendel is a also a registered architect, licensed real estate broker, AV rated by Martindale Hubbell, was recognized in 2010 as one of Houston’s Top 100 Professionals, and was recognized as 2011 Boss of the Year by the Houston Association of Legal Professionals. Mr. Mendel was a fulltime faculty member for five (5) years with the University of Houston, Central Campus, where he taught construction related courses while he attended law school. Mr. Mendel is a contributing author of four books: (1) Strictly Business; (2) Love, Money & Control; (3) Total Wealth Management; and (4) Guiding Those Left Behind in Texas (a book on probate). Mr. Mendel publishes his own blog for his estate planning clients. www.mendaellawfirm.com/blog. In his “spare” time, Mr. Mendel enjoys jogging with his wife, snow skiing and attending sporting events with his son, and cycling.
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