Starting a law firm is a unique business; it is both a profession and a venture. Perhaps, that is why it feels like such an exciting prospect. It may share similar challenges to other types of entrepreneurial endeavors in sectors such as health and retail. But when starting a law firm, you are bound to encounter other obstacles unique to the legal practice.
Nonetheless, you’ve decided to take the leap and start a law firm. Despite the challenges you anticipate, there are many reasons to be excited. Having your practice gives you autonomy, control, and opportunities for expansion.
Why You Should Start a Law Firm
There are some unique benefits to starting a law firm. They may include:
Greater Control and Autonomy
As an attorney, you have the freedom to choose the cases you will pursue and which ones you can forego. Sometimes lawyers have to make decisions based on what, or who, they are comfortable representing. You may want autonomy for ethical or professional reasons.
You may get the inspiration to become a personal injury attorney, based on previous experiences with workplace malpractices. When you have greater control, you are likely to feel more motivated to chase your career goals, regardless of the obstacles ahead.
Focus on your Area of Specialization
It is a common misconception that small practices are not as specialized as bigger firms. But in a small organization, an attorney can have greater flexibility to focus on their area of expertise.
For bigger practices, it is easy to feel like you are a mere cog in a wheel. After a while, the excitement may subside, and every task starts to feel mundane and routine.
A smaller venture may be started by partners often with the same interests, but with varying skills. You can put together a team of attorneys with the same outlook and principles. You can focus on an area that you are all passionate about, such as becoming a personal injury, or the go-to bankruptcy attorney in your community.
Better Career Prospects
You can quickly feel insignificant in a large law firm. By starting your own, you can focus on your preferred area of specialization. When you set up your team, you’ll be more motivated to work with like minded attorneys.
With your practice, you can get more exposure and advance your career. Small organizations have fewer employees and can engage clients directly.
An attorney with a private practice is free to start partnerships with existing firms. You can not only meet high-value clients that you will engage directly with, but you can also meet professional mentors in your line of work.
Implement Your Ideas and Express Yourself
The flexibility of starting your business gives you the freedom to pursue personal projects and ventures. Do you have an idea on how you can improve the business by applying technology? Or do you have a new approach to improving the firm’s processes?
You can think of the law firm as a way of putting your ideas in practice. You have the opportunity to test your projects in the real world. You can tap into varying skills of mentors and like-minded lawyers in your area of specialization.
Capital is one of the biggest obstacles for small businesses trying to get off their feet. So it may be surprising that capital costs are considered here as a plus for an attorney.
But in recent years, the cost of starting a law practice has gone down significantly. You can start your firm with the essentials for as low as $5000 a month. There are several financial options, such as hard money loans, credit cards, or conventional banking. In practice, you should expect the cost to be over $10,000 depending on your location and the size of your business.
Starting your firm is not about money. Today, businesses leverage technology and adopt client-focused services to attain affordability in their attorney services. Keep your eyes on the budget, have a sound strategy, and stay disciplined. You can meet your career goals with commitment and focus.
Making Your Law Firm Stronger
There are many perks to starting your practice, but it is not always going to be easy. To be successful, you ought to adopt the right mindset. If you focus on money, power, and influence, you are likely to give up once you encounter the inevitable challenges.
You can avoid challenges better if you anticipate them during the planning phase. You may have to come up with a model that factors operations, budgeting, and marketing, amongst other aspects. Before working on possible solutions, you ought to evaluate the following potential challenges:
- Administrative Tasks: According to statistics, an attorney can spend up to 30% of their day on billable tasks. Some of the duties are consistent with the operations of most practices. But others may involve tasks such as acquiring security cameras for your practice or buying new computers. Poor billing and financial management can ruin a law firm.
- Time Tracking: It is important to know which tasks are taking up your resources. The data you get will be useful in enhancing productivity and time management in your organization. There are free tools online you can use to improve operations.
- Poor Marketing Metrics: You can gain ground over your competitors by leveraging on technology. However, digital advertising can take up a considerable chunk of your revenues. Watch your budget and formulate good metrics so that you can evaluate the return on investment and make necessary adjustments.
- Isolation: When you start your attorney practice, you should remember that everything is now on your plate. You’ll be working on the budget, and making decisions about your organization’s health insurance plans. You’ll also have to do the legwork and find clients on your own. It can be a challenging prospect, especially if you were relying on the networks you had from your previous firm.
Working on Your Overall Strategy
Not only should you start with passion and purpose, be clear on your mission and principles. You can come up with an outline of your strategy by using the following blueprint.
- Mission and Values: What is your mission? Write it down and make sure you document it. You can sharpen your understanding of your company by taking a deliberate step to writing it down. Make sure it is understood by your staff and other partners in your law firm.
- Goal Setting: What are your goals? How do you know when you attain them? Write down your short term and long term goals. Use key performance indicators to measure your progress.
- Target Audience: For your strategy to be successful, you must have a clear understanding of your target audience. The more you capture your client’s concerns, the more impactful your messaging will be.
- Competitive Analysis: Understand what other attorney firms in your area of specialization are doing. You can find opportunities by exploring gaps in the service they already offer their clients.
Advancements in technology have created many opportunities that attorneys today can exploit. As a professional getting into the legal field, you probably have no choice. That is especially true today, where other practices are finding interesting applications to use technology to enhance their processes.
You can keep your attorney practice ahead of the competition by adopting the following principles when implementing technology.
- Paperless Documentation: You no longer have to use fax paper rolls or printers for all your documentation. You ought to keep most of your transactions paperless. It will enhance the speed and efficiency of communications, in and out of the organization.
- Mobility: Will you be receiving clients from a fixed station? Or would you consider working from home or a remote location? When it is deployed correctly, technology can help enhance advertising, brand awareness, security, and finances in your law firm.
- Security Assessment: You need to map out and access security threats within the organization. Technology can enhance both the capability of hardware devices such as security cameras and detectors. But you can use technology to keep virtual threats at bay by periodically conducting compute and network audits.
- Competence and Literacy: Everyone in the firm should be capable of understanding the technology so that you can fully exploit its potential. That means you may have to factor training into your plan. You also need to ensure you acquire the relevant systems that reflect the operations in your organization.
Marketing and Promotion
Marketing is another aspect of running a law firm that can take up a lot of time and money. Fortunately, there are many techniques and tools at your disposal. With a good plan, client acquisition shouldn’t be a major challenge.
For small firms, the image of the business will have a great impact on your success. Your brand’s reputation can spread quickly through word of mouth. You should make sure the brand’s message and business practices are consistent with your organization’s purpose, mission, and values at all times.
Also, you ought to have a clear map of your marketing plan. Understand the prospects and the target market so that you can craft your messaging effectively. Once you have mapped your path, there are many sources for clients you can exploit:
- Client-Focused: Many clients today expect businesses to be responsive to their concerns. Regardless of the challenges in time and resources, make a point of setting aside time for your clients. By answering their questions and queries, you can open doors to new opportunities.
- Leverage Digital Media: A digital presence is probably the most convenient and affordable means to engage your future clients. You can set up a website with free content that resonates with your target audience.
- Volunteer: You may lend your expertise to a cause in your community, even if it is not strictly related to law. Take the opportunity to introduce yourself to people who may need your services in the future. On the other hand, you should approach the opportunity to volunteer with a giving mindset. Being too promotional can put off potential clients.
- Sharing Referrals through Networks: You can share your referrals with other lawyers when you are busy, or when you get a case that is not in your area of specialty. A network with reciprocal relationships can help you get clients during the low seasons of your business. You can go to various events such as a local bar association meet up to create a network of lawyers.
- Hiring and Recruitment: For your law firm to be successful, you need to find people with the right qualifications. They should also reflect the same values and ideas as what you’ve envisioned for your organization.
- Ideally, you want qualified employees to stay for the long term. Recruitment can be costly, so you should have incentives like a conducive working environment, compensation packages, or a health insurance plan.
- You ought to have a clear understanding of the role of each employee in your organization before you commence with recruitment. Outline the organizational chart and place every role where it will be most impactful to your organization.
Running a law firm will also require some entrepreneurial and management skills. The efficiency of the firm’s operations can have an impact on the reputation of your brand.
Even though certain aspects of the firm may seem mundane and routine, they are crucial to your success. There are certain decisions, such as what type of scanner to buy or where to find cheap paper cups that can run up the costs if you ignore them.
You may have to spell out the workflows in your office. The procedures and processes ought to be documented before you share them with the relevant staff. Get your employees to commit to principles of time management and productivity.
New law firms also need to pay attention to their invoicing and budgeting processes, especially if they want to be paid upfront. You may reconcile your billing systems to match your client’s preferences to facilitate timely payments.
Like with most ventures, starting a law practice is not a walk in the park. You will face challenges in many different areas, ranging from security to finances. But with a sound business model, positive mindset, and commitment, you can be successful and happy.