When I graduated from law school in 2010, legal jobs were very hard to find. After a brief stint as a staff attorney, I wasn't feeling very optimistic about my chances of finding a job that would fulfill the dreams that led me to attend law school in the first place.
So... I started my own practice with one of my law school friends, and our law firm Mays & Kerr, LLC was born. Neither of us had experience as lawyers or business people, but we were entrepreneurs at heart and passionate about the legal profession. Despite our inexperience and some early mistakes, our practice took off and is very successful.
When starting your own practice, advice from well-meaning friends, business relationships, and vendors is abundant. With so many voices focusing on different aspects of your business, it can be difficult to see the big picture of getting your practice off the ground.
Having built my own practice and helped several friends and colleagues start their own, I've continued to learn valuable lessons (both vicariously and personally) about the fundamentals of running a small law firm. Here are the top ten things I've learned about starting your own small law practice and keeping the big picture in mind.
1. Be Lean
The best thing about starting a law business is how cheap it can be. A lawyer doesn't need to buy any specialized equipment or tools. Give a lawyer a computer, a phone, and a suit, and he or she can start making money representing clients. If you can forego to get office space, a nice desk, and other nice-to-haves, then you'll take more money home at the end of the day.
Having a standard of leanness can also help immensely when start investing more in your practice. You'll be trained to ask the following question about every dollar you spend: "How does this expenditure increase my ability to generate revenue?" Getting to the next level often requires a willingness to increase operating costs, but you'll invest more wisely when you know that you can function without any frills.
When I first started my practice, I thought it would be fun to be a general practitioner. I quickly realized it wasn't only not fun - it was my personal hell. Like most people, I enjoy being competent and knowledgeable in my work. But when I was taking family law, personal injury, employment, probate, and civil rights cases right and left, I never felt fully knowledgeable. I didn't know answers to most of the question that came up, and, while I could find the answers eventually through research, this was no way to practice.
So I made a 180 degree pivot, deciding to specialize with a laser-like focus on a single species of employment law claims: those arising under the Fair Labor Standards Act. I didn't have a preexisting interest in wage and hour law, but it seemed interesting enough, so I learned every I could about it. After six months, I knew more about this tiny neighborhood of the law than most of the more seasons lawyers that I litigated against - not because I was smarter than they were, but because I only did FLSA cases, whereas they handled many varieties of cases. What's more, found that I had more (and better) clients than when I was trying to be a general practitioner. In short, nailing a niche turned out to be the key to enjoying my job and making a living doing it.
3. Be Smart About Leaving Your Current Job
Most lawyers start their first firm after leaving another law practice. It's extremely important to wrap up with your past firm and transition any clients in a way that won't create legal or ethical problems for you. You can reference the ABA's Model Rules of Professional Conduct or the guidelines provided by your state's bar association for specific requirements about ethical requirements. Regarding legal duties, note that you may have fiduciary duties to your current employer. It's never a bad idea to consult with a business lawyer at this stage.
Hindi Greenberg, author of The Lawyer's Career Change Handbook, provides some great advice on how to have a smooth transition in her post How to Successfully Leave a Law Job on Vault's Law Blog. Greenberg stresses that remaining on good terms with your former employer should be a priority. "You never know when you may need to work with your former employer again in some capacity, ask for a reference or have some contact in an unrelated business situation." In short, make sure you depart ethically and on a positive note.
4. Prepare for a Ramp-Up Period
While I've already mentioned how it can be inexpensive to start your own law practice, that doesn't mean you can jump in without any financial backup. Building a base of clients and cases takes time, so make sure you have enough in savings to cover your living expenses while revenues are growing.
Take some time to think about your personal living costs. Look back at your budget (and bank account) to see where you are spending money each month. What are the unnecessary extras that you could live without, at least temporarily? What are the necessities that can't be ignored, such as mortgages, utilities, health insurance, and meals? Estimate how much you would need saved to cover expenses for five or six months if you didn't have a penny of profit come in during your ramp-up period. Then, be sure to add in a buffer for those unexpected situations that always arise in the worst moment.
5. Don't Skimp on Essential Tools
Just like with any other business, you will need to spend money to make money with your new practice. Carefully consider when and where to spend your seed money, but don't skimp on the essentials your firm needs to operate.
As we all know "time is money." When evaluating your business purchases, keep in mind that cutting corners can often be more time consuming and costly, in the end. For instance, you may save money up front by using a cheap scanner and PDF editor, but these will cost you time which could be spent more effectively.
Eleanor Roosevelt once said, "Learn from the mistakes of others. You can't live long enough to make them all yourself." Learning how to avoid the mistakes of others have made is one of the most critical skills we can gain in life. Get out and talk with other lawyers in your practice area, especially those who have started their own firm. They will teach you the nuances of your practice area, are a good sounding board for questions, will send you cases, and (most importantly) keep you sane.
7. Obtain a Web Domain, Email, and Website
In this digital age, having an online presence is not only beneficial, it's expected. But this is one of those areas where you shouldn't cut corners. Select and purchase a web domain and have a website that at minimum contains information about who you are, what you do, and how to get in contact with you.
By simply acquiring a web domain and requiring all employees to use email addresses that you provide, you can avoid post-employment nightmares, like email accounts that you can't reclaim if someone quits or leaves. Simply utilizing free email accounts like Gmail and Yahoo can be dangerous because they are not owned by your firm.
8. Build a Brand
Branding can be an intimidating topic for some. As Jay Harrington, co-founder of Harrington Communications shared in an Attorney at Work post, branding is "one of the most overworked and overanalyzed topics in the marketplace of ideas." However, it is one of the key things to keep in mind as you're building a new practice.
It is important to remember that your firm brand is not simply a logo or trademark. Your brand is a conglomeration of all the promises, expectations, and perceptions you want associated with your firm. The message you want your clients and the rest of the world to hear about your firm should be kept first and foremost at all times. Take the time to think about how you want your law firm to be percieved, as well as how to integrate your personal brand into what you do.
9. Get a Bookkeeper
In an effort to save money while starting up my firm, I decided to manage the books myself using QuickBooks. However, spending 10+ hours per month at the office on Saturdays was exhausting and killing my weekends. It was totally worth the cost to hire a professional bookkeeper to manage our accounts. And while I'm rather comfortable managing money, it was a relief to know I was putting my money in the hands of someone who knew the ins and outs of business finance.
10. Learn by Teaching Others
Don't be afraid to share the lessons you've learned, and are learning, with others. I recommend giving presentations and teaching CLEs in whatever area you choose to specialize. The first time I taught a CLE, I was reteaching material I had learned at another conference. I was surprised at how positively my presentation was received and how it led to more speaking invitations.
Keep this in mind: what you have to say has value for others, and the questions and feedback you get from presenting only helps further your own search for knowledge. Furthermore, being able to teach someone else is one of best ways to confirm your own knowledge of a given subject. Not only will teaching others help further your specialization, it will also help build your personal brand as an expert in a given area.