This small fly belongs to a group of flies called shore flies.  As the name implies, they are found in mud flats and along shores of wetlands and lakes.

 This species has raptorial front legs--similar to those of a praying mantis.  It uses those legs to capture prey.  However, when I saw this fly it seemed to be using those legs for a visual display, as picture wing flies and signal flies do.

Larva are reported to live in the water or mud and to be predatory.