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The thought of starting your own firm appeals to many attorneys at some point in their career. But there are several things you should consider before you quit your current firm and start your own.
Depending on whether you’re just starting out in your career, or have been a lawyer for some time, your challenges may vary. So how do you know if you should start your own law firm? And, what are some tips you should consider before going solo?
“If a man knows not which port he sails, no wind is favorable.” If you do not know why you’re starting your own practice, then no amount of time, money or effort will guarantee success for your new firm. Your “Why” for starting your own law firm will be the driving force behind many of the major choices you make; including how you design your law practice, the clients and cases you take on, your company culture, growth plan and more. It will also be your main motivation when challenges arise.
You have to know where you’re going. What is your why? What do you want your law firm to be?…Write out a company mission statement for your firm. What it is you want to be known for? What do you want to strive towards? What will be your guiding principles? This mission statement – your why – will be the thing that guides you throughout the law firm startup process.
To build a successful, profitable and valuable law firm, you need to have some goals. What do you want to achieve in your solo law practice? Your initial goals can be as simple as determining: What sort of clients do you want to attract? What types of cases do you want to take on? How many attorneys would you like to have in your firm? How much revenue do you want to make? Do you want to go to court? All of these questions can help define your law firm goals, and further establish your law firm’s business plan.
Tip: Write your goals down. “People who very vividly describe or picture their goals are anywhere from 1.2 to 1.4 times more likely to successfully accomplish them.”
Perhaps one of the most important questions to consider before starting your own law firm is – How much is it going to cost? Starting your law firm can be expensive, and there are a lot of initial expenses to consider. However, having a good plan in place, implementing the right technology, cutting down on overhead costs, and engaging with the right business partners are all ways to decrease your startup law firm expenses.
For solo practitioners, lower overhead costs usually means better profit margins and a boosted bottom line. But how do you determine what costs to cut, and what expenses are essential to running your law firm?
Some of the biggest overhead costs a new law firm can consider reducing in its initial startup are the costs of commercial building space and office administration.
Running a solo practice or small law firm certainly comes with its advantages and disadvantages. Often, one of the biggest disadvantages for a solo practice is the limited access to resources, such as associate attorneys, support staff, and office equipment. Fortunately, new innovations in legal technology have provided solos and small law firms with several tools to increase their firm’s productivity and lower overhead costs. Tools such as TranscriptPad, DocReviewPad, Elementor, Typeform and more help solo practitioners and small law firms be more competitive without having to staff additional help.
The old adage of: ‘Money comes in occasionally and goes out continuously,’ can be very true when starting your own law firm. That’s why it is important to have established relationships with a good accountant, bookkeeper and/or banker. You need people in your corner to help handle the day-to-day tasks of recording financial transactions, and providing insight and analysis into your business operations, decision-making and financial well being.
Getting a steady flow of clients when you first start your law firm is essential to your success. But how do you attract new clients to your firm? And how do you build awareness for your new business? Creating a law firm marketing plan helps take the guesswork out of promotional efforts by providing direction and structure to marketing activities.
Think about what marketing strategies fit your firm’s overall vision, objectives and budget. Who are your primary target clients? What marketing channels do they utilize? What strategies are most likely to work? And what marketing initiatives make the most sense with your marketing budget? Select a few repeatable marketing tactics that fit your law firm’s growth goals and that you can use to reach your target market (i.e. networking, referrals, content marketing, social media, newsletters, advertising campaigns and more).
Recommended Read: How to Launch a New Law Firm
The Jury is Out
The Jury is Out