Are you dreaming of starting a law firm? A law school enables you to think like a lawyer but does not make you a skilled business professional to start your own law firm. The process of initiating a startup in a legal business may seem intimidating. You may be a great lawyer, but you need to have enough business knowledge to start a successful law firm. You need to organize your business and implement effective branding techniques to make it stand out from others. Various factors are involved, which should be considered while you plan for your own law firm.
In this article, we have a checklist for your upcoming business venture. Check it out and get started now!
Are You Ready To Start Your Own Law Firm?
Running a law firm is not the same as other businesses. You must develop your business skills besides being a legal practitioner. You are skilled enough to deal with the legal issues that your clients will come up with. But a business will bring up loads of other problems that you need to tackle effectively. Otherwise, you would be soon out of business. These challenges continue throughout and come up with a new formation. Hence, before starting a legal firm ask yourself whether you are ready to take up this challenge or not. If your conscience allows you to move forward and you have that entrepreneurial bone inside you, get on with your dream.
What Are The Benefits?
There are tons of benefits that come along with various challenges. But learn what are the advantages, before you start on with your law firm.
- Starting a law firm you have utmost independence in choosing your client base. Most attorneys practice on the specific type of legal issues that best suits their field of expertise.
- This startup allows you to go beyond your zone to explore more in this business field. Besides practicing legal cases as a legal practitioner, you get the scope to build a successful business on your terms.
- Even business can bound you to certain limitations when you plan to formulate the business plans and structure. Whether working as a partner or as an employee, you have very little control over the business model. But being the owner of your firm you are free to take any decisions and bring about changes that suit your future goals. You get complete freedom to choose what service you would offer your clients and what kind of work culture you want to implement in your workplace.
Startup Checklist for Law Firm
Just the trigger of your instinct or your will is not enough to build up a successful legal firm. You need to have a clear idea about the know-how of this field.
Check out the below section to build a strong foundation for your law firm!
1. Create an effective business plan
A detailed business plan is essential for the sustainability of your startup in the long run. Chalk out all the business factors to create a strong and effective mission statement. Plan out your financial and marketing strategies to stand out in the competitive business world. Formulate an executive summary of your business plan that will give an insight into every detail, which includes location, future goals, and objectives, start-up budget as well as a monthly budget. Your business plan should also include the potential client market, which will guide your business in the right direction. Mention the capital amount needed to initiate the startup so that you operate the firm smoothly.
2. Structure your business entity
You have a well-structured business plan. What you need now is your business entity to establish your startup in the market by giving it an organizational hierarchy. Establishing a law firm involves similar business procedures. But, being a legal professional you must be well-aware of every minuscule detail of this field. Establish your business format as per your needs and other legal aspects. There various types of business entities like,
- Sole practitioner for solopreneur
- LLC for single members
- Professional corporation, partnerships, LLC, and LLP for multi-members
3. Give an appropriate name and design an attractive logo
Though you have well-rooted business plans and a well-established business entity, without a business name it won’t get recognition. The name and logo of your firm would represent your brand to the market. Give an appropriate name based on your area of expertise or name it after yourself. But make sure your creativity in naming your firm does not mislead your clients.
Try to avoid few nomenclatures depending upon the type of business entity your firm belongs to. Avoid using “and Associates” if you do not have any associates as it violates the rules. You can also add a logo to your business name. You can customize it yourself from various designs available in Google or involve a graphic designer to get it done for you.
4. Select your area of expertise
Specify your business domain to enhance your credibility faster. Identify your area of expertise or the type you are interested in depending upon your strength and weakness. Choose your preferences wisely as that would be your prime USP. Generic practices are very rare nowadays. Lawyers prefer to opt for specific domains like bankruptcy or family laws.
5. Select a location for your business
Choosing the desired location for your law firm has a wide significance. The practice area has a lot to do with your business growth. Choose the one that best fits your needs. Do a brief research on the location to find out the availability of similar law firms in that area, as that may affect your client base. Moreover, setting up an office in a rented space, shared workspace, or at home will have an impact on your business. Working from home saves a lot of money and eases your work by giving enough isolation to practice. Whereas, shared workspace pools enough resources to build a strong network.
6. Set up your office
If you are planning to set up a proper office space whether, at home or the rented location, you need some essential stuff to make your workspace more organized. Accumulate all your essential stuff like furniture, computers, printers, dedicated business telephones, files, furniture for reception areas, and other stuff to arrange your workspace.
7. Channelize your networks effectively-join local organization
Developing a strong client base in a business involves a lot of hard work. A startup won’t immediately draw enough clients. You need to build a strong and effective network by cultivating a healthy relationship with other lawyers to get more clients. Lookout and seek referral work that would be of great help during your initial phase.
Joining a local organization can also help you widen up your network. Join lawyers’ associations to meet the professional of your fraternity and attorneys who can mentor and show you the ropes.
8. Build a strong website
Looking for the names of lawyers in a huge phone book is long gone. People nowadays survive on technology. Local SEO has made the search way more easy and fast. Therefore you need to design an attractive and strong website stuffed with valued information.
9. Manage your finances
Finances are the most crucial part of any business. Tracking the finances of a running law firm could be complicated and stressful. Learn what you need to keep a track of while you plan to set up your own law firm:
- Open a separate bank account: Keep a separate bank account for revealing the deposits from the clients. The account could be an operating account, trust account, or IOLTA.
- Monitor your taxes: Few business sectors need licensing and permits for running them. While you design your business finances keep aside some amount for business registration, taxes, and licensing.
- Marketing and advertising expenses: Creating websites, brochures, and business cards involve certain expenses. Count these expenses while you make your business budget.
- Insurance: get insurance for safeguarding your business from unexpected situations. Insurances could be of workers’ compensation, casualty insurance, and professional ability.
- Billing your clients: Billing your client is a vital task and a tedious one as well. Hire a professional accountant who would keep track of working hours, bill cycle, billing terms, rates, employee compensation, and many others.
- Your instinct can be your best advisor and research well to support your instinct with logic.
- Keep your backup plan ready when you don’t make enough money.
- When you find something out of your control, make sure you know where to seek help.
- Be honest and dedicated to whatever you do.
- Get paid upfront.
- Spend your money smartly and don’t be wasteful.
- Create an effective system so that your vacations can be way more enjoyable and tension-less.
- Always be transparent and honest with your clients.
Some frequently asked questions related to the law firm:
The amount earned by a lawyer depends on the size of the firm and what they practice. For example, an Intellectual attorney earns around $150,000, which is 50% more than Corporate attorneys and double the amount that a personal injury or divorce attorney earns.
The start-up cost of a law firm ranges between $5000 and $15000. Though the amount varies and depends upon location, preferred domain, marketing, and advertising, and many others.
No, a non-lawyer cannot start a firm and even cannot be a partner in a law firm.
Apart from being a legal professional, if your entrepreneurial spirit triggers you to open up your own law firm, get on with it. Besides this guide, you have your very own invoicing software, Billbooks for all your financial assistance.