So you want to start a law firm? This is probably the best decision you’ll make in your career.
But that doesn’t mean this path is without its challenges.
First, you have to deal with the naysayers. Friends, families, and peers may try to talk you out of it. And it may not feel that way, but they have the best intentions.
Here’s the best advice you can get at this stage: Don’t listen to anyone who hasn’t started their own firm. Their discouragement is a form of protection, but unless they’ve done what you’re considering, they can’t know what they’re protecting you from. They can’t really know the dangers.
Regardless of where you are in your career, you can start your own law firm. Even if you’re straight out of law school, it’s possible. It’ll be easier when you have some type of favorable reputation, but many people have started successful firms at this stage.
To-Dos, Considerations Before You Begin
Create a business plan. As with any business, it’s a good idea to go into this with a solid business plan. This document is more about your own professional growth than anything else. It’s a way for you to consider and plan for various scenarios that may arise as you start your firm. Your business should include financial and growth plans.
And when you’re comfortable with your business plan, go ahead and let someone rip it to shreds. No, not literally. You’re looking for constructive criticism at this stage because it’s all too easy to look at this exciting new phase through rose-colored glasses.
Ask a few lawyers with their own firms to review and critique your plan. Ask about things you may not have considered and find out whether they think any area is overly optimistic or pessimistic. It’ll be a tough pill to swallow, but it’s better to learn these lessons before you’ve invested any time or money.
Choose one area of law. It may seem like a good idea to broaden your area of expertise because you think you may get more clients. But this is the worst thing you can do. When you stretch yourself too thin, you can’t perfect any one area of law. This may have worked in the old days when a town might have one lawyer who handled it all. But today, clients have choices, and they’re going to pick the lawyer with experience in their specific field.
You’ll want to choose an area where you have some experience. If you don’t have any experience, get some. If you’re still in law school, try to get an internship in your chosen field. And if you’re working already, try to get a position (even clerk) where you can learn about the type of law you’re going to practice.
Starting a law firm is a major long-term decision, and you want to be sure you’re going to enjoy the work for the next decade or longer.
If your experience is minimal, you may want to choose a practice area where clients are likely to be working with a lawyer for the first time. Such specialties include personal injury, bankruptcy, family law, and criminal defense.
On the other hand, it will be more difficult to get clients with a specialty like corporate law where clients will be basing their decisions on your client portfolio and track record.
You need to save up a small nest egg. Depending on the area of law you choose, it may be four to six months before you start seeing any revenues. Find out how long you can work without making a penny before you go broke. That should give you an idea of how quickly you need to make things happen beforehand.
Start with a large enough investment. If you don’t have money to invest, it’s probably not the right time to start a law firm. You’re not going to be able to start without capital, ideally somewhere between $5,000 and $15,000. And naturally, your costs will vary based on your area of practice, location, and business plan.
Expenses to Consider
Office rental. Unless your practice is solely based online where you meet with clients virtually through Skype or Zoom, you’re going to need an office space. Conducting meetings at the local Starbucks isn’t a great way to inspire confidence. In a pinch, you could start out this way or create an office in your home, but you’ll want to plan for an office sooner than later.
If you do have an office from day one, plan to cover the rent for four to six months as your firm begins gaining traction. Along with an office, you’ll naturally need furniture and office supplies, including computers, backup drives, document scanners, and printers.
Professional expenses. Every profession comes with its own set of expenses. With a law firm, you can expect to pay for continuing education, conference attendance, malpractice insurance, and professional memberships. And in addition, you’ll probably want to license legal software to boost productivity. At the very least, you’ll want a good law practice management software, billing software, and accounting software.
Marketing expenses. You can’t expect clients if no one knows you exist, so consider the marketing plan you’ve outlined in your business plan. It may include search engine optimization or social media ads, television commercials, radio ads, or billboards. Your marketing plan will also include networking and entertaining leads (dining and drinks, etc.).
Starting your own law firm can be the best decision of your life, but only if you think it through and take the advice of those who have gone before you. So what’s holding you back?
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Matthew Willens is founder of Willens Law Offices, Chicago, and is recognized by the Illinois legal community as the “Best of the Best” in personal injury law and for taking his cases to trial and succeeding. He attended Loyola University of Chicago’s School of Law.