Starting your own law firm may be a life-long dream, but it’ll never be a reality unless you put forth the effort to make it happen. Many lawyers are content to work in more prominent firms or private practices, but you do have the rare few who are daring enough to strike out. If you’re one of those, know that this venture is possible—it just takes a lot of legwork.
But of course, anything worth having isn’t easily obtained. With that said, here are five things you should know before you enter your planning phase.
1. Create Your Visions for Your Perfect Practice
Your vision is what shapes your practice. You can’t just decide to start your law firm and then hope the vision will come to you along the way. Your vision is what you want your firm to be which is a representation of your legal beliefs. This isn’t something you can just come up with, it takes time.
>> Learn how to create the vision for your perfect law firm by answering these four simple questions!
2. Have Enough Capital for Contingencies
Regarding finances, the excess is always better. Once you have your vision, come up with a solid business and marketing plan. You’ll need a marketing analysis, financials mock-up, marketing strategy, and all that good stuff. This should tell you how much capital you’ll need to jump-start your setup and how much you’ll need to make to break even.
Once you know how much you should have, add a few thousand or hundred thousand on top of that. If you’re starting your law firm with just enough capital, you might find yourself deeply in debt during emergencies.
3. Identify Your Area of Specialization
Generalization is the road to failure. That’s not technically an adage, but it might as well be. You can’t be the kind of firm that caters to every legal issue that walks through your door. Not only will this policy drive you to the brink of exhaustion, but it will lower your success rate as well.
Pick one or two areas of law that you’re genuinely passionate about and stick with them exclusively. This way, you can focus on specific cases that come through. and you lower your competitor spectrum.
4. Prepare Financially for a Rough Road
As mentioned earlier, emergencies can happen at any time. When they do strike, you’ll be happy you had a couple of extra stashed in your bank to cover you financially. Starting a law firm is not an easy thing to do. On top of potential market scarcity, oversaturation, and intense competitors, it might be awhile before you reach something resembling stability.
5. Buy a Pre-Existing or Start from Scratch
Creating a law firm from the ground up can prove challenging, especially if you don’t have much experience backing you up. Employment lawyer Branigan Robertson started his law firm right out of law school, and his story proves that it is possible—but not for the faint-hearted. You’ll need to build connections, find clients, and construct a referral network. As mentioned, you’ll also have to accept the fact that you’re not going to see any actual revenue before you’re half a year in.
Of course, as Robertson points out, there are also advantages to starting from scratch. Aside from the complete control you have over the practice, it can sometimes prove to be more cost-effective than the alternative.
As it turns out, buying a pre-existing law firm comes with a hefty price tag, as you are essentially purchasing the existing client list, the contacts, the website (if any) and, of course, the name. This is called “paying for the goodwill.”
On top of the goodwill, you’ll be purchasing the pre-existing problems as well. This means potential problems with the existing firm’s tradition, the current clients (who might not be too happy about the transfer of ownership), and the existing reputation—both good and bad.
>> Still Need Some Advice on Starting Your Own Law Firm? Learn How to Jumpstart Your New Law Practice Today!
Of course, one isn’t necessarily “better” than the other. Whether you choose to build from the ground up or build from an existing foundation remains your choice wholly. You need to explore all options, examine the pros and cons each option has to give you, and then choose whichever one you feel will suit you best.