Have you ever wanted to start your own law firm?
Most practicing attorneys will think about this at one point or another, and for those with an entrepreneurial drive, it can make perfect sense.
But if you don’t have business skills or experience, you may want to be a little more careful when opening a legal startup.
Here are some things to consider before you take the leap.
Should you start your own law firm?
Is starting your own law firm a good idea for you right now?
As much as you may be tempted and excited, you may not have everything in place for things to go smoothly.
Things to consider:
- Do you have business experience?
- Do you have law firm experience?
- Are you interested in teaming up with other lawyers?
- What kind of financing options do you have?
- Is there enough demand for your services/niche right now?
- Do you have the time and energy to run a business and practice law?
Maybe a law firm is too big of a jump, and you should start another kind of business to get some practice. Or you could join forces with another firm with the intention of partnering to get some experience.
Business and entrepreneurial skills are not the same as our law skills — obviously, it’s an advantage if you have both types of experience under your belt, but do bear in mind that they are entirely different things.
It takes a lot of stamina to start your own law firm and run it well, so you should have a strong foundation of both law and business.
Benefits of Starting Your Own Law Firm
If you can tolerate risk, have an entrepreneurial drive and a clear vision, you’re probably in the right place to start a law firm. But you’ll also want to consider whether other benefits fit your vision and goals.
Build a Brand With Your Name
Once you build a name for yourself in the legal profession, it will become part of your brand, and that can become synonymous with your practice area or region. So long as all goes well, having this personal connection with your partners and clients can go a long way when it comes to building authority and trust.
Choose Your Practice Focus
You won’t need to be thrown into the ring of unfamiliar legal areas — instead, you can just do what you do best from the get-go. And as you build a reputation, people will trust your name as part of the brand as a trustworthy authority figure in the field.
Choose Your Clients and Cases
With your firm, you can turn down cases and clients as you choose. Your business model and plan, and goals can reflect your priorities here.
How to Start Your Own Law Firm
Here are a few things that need to be taken into account before you move forward in terms of business and operations.
Network
As early as possible, start connecting with your network to let them know you’re opening a firm, and stay in touch to ask for advice. Some may be willing to get an official mentor, and others may be happy to offer referrals if they have different focus areas.
Joining local organizations and getting to know your colleagues, as well as your target market, either online, in-person, or both, are examples of ways to get your name out there.
Develop a Realistic Business Plan
Consider that starting your own law firm might be something to work towards in the future. There’s no need to rush, and you can take small steps as you build the foundations and craft a business plan you can stick to.
Decide on a Business Structure
What type of entity will your business be? Maybe you want to start as an independent owner and expand into a different structure as you grow? Here’s some more information on choosing a business structure.
Have a Clear Picture of Long-Term Expenses and Costs
You’ll have an accountant to help you with your legal start-up — this is a key player on your founding support team.
But you still need to know the numbers and best practices beyond just practices. Your future self will thank you if you are realistic about these areas at the outset:
- Financial forecasts
- Budget and reporting systems
- Cash flow management
- Handling equity and investments
- Invoicing and payments (accounts payable and accounts receivable)
A cost-friendly option if you’re just starting out is a virtual legal startup.
Make Sure You are Legally Protected
If you’re a lawyer, you probably won’t skip this step. But between tax regulations, partner agreements, and employment laws, it’s possible that you don’t know everything there is to know about business law. (The point here is: don’t assume you know everything.)
Asking an expert to help you set up a new startup is one of the best things you can do early to avoid costly mistakes later.
Talk to an Experienced Business Attorney
If you’re going to start your own law firm, congratulations! You are now taking the next step to fulfill your goal.
We’re always happy to hear from entrepreneurs and counsel them on best practices, help them set up their fundamentals, and get clear about what they need for their startup.
We offer business risk management consulting and general counsel to business owners. If you need assistance, don’t hesitate to reach out!
Enjoyed this article? Here are three more to help you:
How to Finance Your Business During Difficult times
Why Every Business Owner Should Have A Business Lawyer
What You Should Expect in Due Diligence if You Sell Your Company
