How to Successfully Manage a Small Law Firm
June 8th, 2017 | By: Walker Advertising | Posted in: From the CEO
Whether you are fresh out of law school or have been practicing law for several years, managing your own small firm is very different than working for someone else. Your responsibilities will go far beyond working with clients to resolve their legal problems. With your own small law firm, you’ll also need to bring clients in the door, select and set up marketing efforts, choose an office space, hire administrative staff and law associates, decide on the best operational systems and processes for the firm, and much (much) more!
Before you change your mind about starting a small law firm, just know that others have been in the same position and are thriving! It’s natural to have certain hesitations, but with hard work and determination, you too, can do what it takes to launch, manage, and grow your business.
Tips on How to Manage a Small Law Firm
- The most important tip relates to your state of mind. You may get a lot of negative feedback when you mention your plans to classmates, coworkers, professors, and other networking associates. While these people may genuinely care about your success, you can’t listen to them if you want to accomplish your goals. Some of them may even have legitimate concerns (which you should have addressed in your business plan), but others may just be pessimistic by nature or actually want you to fail. Regardless of the intent, believe in yourself and hustle hard to make your small firm a success.
- Speaking of business plans, you must have one – and a comprehensive one at that. If you plan to start your firm right after law school, you should spend those years working and reworking your business plan. The plan should include one-year, three-year, and five-year goals. Other elements you must address in your plan includes a summary of the competitive landscape, your competitive advantage, marketing channels, financials such as the cost to start the firm in your area of law, and how much revenue is required to break even in your first year. You should have multiple attorneys review your business plan to highlight weaknesses or areas that need more specifics. Take these comments in a constructive manner to strengthen your business plan.
- Bootstrapping is a challenge for any entrepreneur and it is no different for lawyers who are managing a small firm. Make smart decisions about money such as saving up a small nest egg. It can take up to 6 months (or longer) before you start seeing income. Knowing how long you can work without making money will keep you motivated to work hard to make things happen.
- Avoid being a jack-of-all-trades lawyer. You should opt for a maximum of two practice areas and focus all your efforts on these areas. If you take on every case that walks in the door, you’ll find yourself competing with every other law firm in the area. Once you’ve decided which area of law you want to practice, use summers to intern at firms where you can get firsthand experience on relevant statutes and case law. If you are currently working for another firm and not working on cases that pertain to your intended practice area, try to switch departments internally. Otherwise, you may need to budget in 3-6 months of quitting your current job to intern at another firm before launching your practice.
- Building a referral network, even before you launch your business, is a smart idea. If you are a law school student, take practicing lawyers out for coffee or lunch to find out where and how they get most of their cases. Once you have developed relationships with several of these attorneys, ask them to send you work once you get started. Most of them will be happy to give you a chance to see how you handle their referrals. After proving yourself a few times, they will have enough trust in you to send you whatever work makes sense.
- When it comes to managing day-to-day workflow, you’ll need to figure out a way to manage emails. If you have several employees in your firm, minimize the number of internal emails and meetings because they can be time suckers. Focus on external communication with clients and casework in order to keep clients coming in the door. Instead of communicating with your colleagues via email, use an instant messaging application so that you can prioritize emails from clients.
- Create operational processes that are scalable and can be followed with minimal supervision. This will make it easier for you to hire and train administrative positions such as secretaries, paralegals, and receptionists. This includes how phones are answered, the process of handling prospects, filing, following up with clients, etc.
- When meeting with prospects, walk them through a roadmap of how you work, what they can expect in terms of communication, timelines, challenges, etc. Lay out your processes and be honest about the result they can expect. If you work in a practice area where client referrals are common, your customers will appreciate your candor and likely pass your name along to people in their network who also need representation.
- Set up a fee structure and do not negotiate. If prospects tell you that another law firm is doing the same work for the same cost or even less, be wary of lowering your fees. When you reduce your fee, clients will get the impression that you are desperate.
- The end of a case does not mean the end of a relationship with your client. Current clients are the best source of future business. Make it a part of your process to conduct an exit interview, and when you send a closing letter, add marketing elements such as asking for a review. Check in with them every few months so you stay fresh in their mind for possible referral opportunities.