How to Start a Law Firm
January 30th, 2017 | By: Walker Advertising | Posted in: From the CEO
Starting any new business takes guts, but when it comes to starting your own law firm, you’ll need an extra dose of grit and the determination to solve problems that arise along the way. Although you may be licensed as an attorney, you’ll soon find yourself carrying out an array of tasks like marketing, office operations, business development, and human resources.
How To Start Your Own Law Firm
There are many factors to take into consideration when launching a new enterprise. Below are some of the most helpful tips for starting your own law firm:
- Put your business plan on paper. Starting a firm without a business plan can lead to months (or years) of disorganization. Create a plan that outlines the first 3-5 years of your firm’s growth and use it as a roadmap. It should contain four key sections:
- Executive Summary – General description of your firm, practice areas, goals, and why your firm will be successful.
- Marketing Plan – Describe your ideal client profile, the current market climate, pros and cons of the competition, and marketing tools you will use to get clients.
- Management Plan – The bios of who will run the practice, including educational backgrounds, past employment details, skills, accomplishments, affiliations, etc.
- Financial Plan – Income statement, cash flow projection, and balance sheet.
- Obtain permits, licenses, and identification numbers. You’ll need a federal Employer ID Number (EIN) and the licenses that are specific to your state and city. Register your business entity in the setup that makes the most sense for your operations, whether General Partnership, Professional Limited Liability, etc.
- You’ll need to set up a line of credit for a firm credit card or take out a loan. Firms that handle client funds are required to open IOLTA (Interest on Lawyers Trust Accounts).
- Malpractice Insurance. Though the law may not require it, this insurance is recommended since 5-6% of all private attorneys face legal malpractice charges on a yearly basis. Also consider property insurance, health insurance, and life insurance if you plan to hire staff.
- Secure Office Space and Set It Up. Choose an office space that works within your budget. It’s natural to want to get the biggest and best space immediately, but consider sharing space, or working from home until you have a list of regular clients. Once you obtain office space, buy the electronics and furniture needed for daily operations.
- Choose a focus area. A general practice can make it hard to build a strong business. Try focusing on one or two areas of law instead. Trying to do everything may be overwhelming and challenging for securing business.
- Hire Staff. It may not be realistic to hire staff on Day One, but be aware that the every day tasks of running a solo firm can take up a lot of time. You’ll need to file, pay bills, answer phones, conduct client research, handle marketing initiatives – all while taking care of client cases.
- Launch a High Quality Website. Potential clients, peers, and individuals you meet at networking events are going to want to know more about you. Your online presence should reflect the quality of your work and make visitors feel confident about referring or hiring you.
- Build a Referral Network. This will involve networking, taking individuals out to lunch or chatting over coffee. Let everyone you meet know that you are starting your own firm and your area of specialization. Ask them for advice on where they get their cases. Once you’ve built strong relationships, ask peers to send you work when they are overloaded. Additionally, get to know lawyers who practice different areas of law because this will be the main resource for referrals.
- Ignore Naysayers. Don’t get discouraged by those who are skeptical of the idea, or when business is slow in the beginning. Many lawyers have launched successful firms with basic resources.