Don’t start your small business off on the wrong foot.

“I’m not that great of a lawyer, and if I can do this and make money, anybody can do it.” That was the advice of the late Joe Francis, a member of the Washington County Bar Association, when Erick and I decided to start CamsonRigby, LLC. While I don’t wholly endorse his advice, he isn’t that far off. Starting a law firm is challenging but not difficult.

When I graduated law school I wanted to be a prosecutor. I had interned in three different prosecutors’ offices, worked for political candidates for Attorney General and District Attorney, and loved the courtroom. I got a job right after law school clerking for a trial court judge, which I thought would make a great segue into the prosecutor’s office.

I’ve never been happier to have a plan fall through.

While my boss was being forced out of office and indicted, my friend Erick and I decided to start our own firm. Why? Well, as I mentioned above, Joe Francis told us we could. And he wasn’t the only one. We looked around at our local bar and saw a dearth of young lawyers ready to provide quality legal service. So we did our research and decided to make the jump.

Anybody can hang a shingle, although few have real shingles anymore. The question is, should you hang a shingle? Go out on your own? Start a business? If you’re even thinking about it, there are five key questions to consider.

 

1. Do I Want to Do This?

Some people go to law school because they have a political science degree and no other plans. Others go so that twenty years from now their mother won’t say to people “He’s really successful, but you know, he never went to law school.”

If you’re considering starting your own law firm because you don’t know what else to do, don’t. If you’re doing it because you can’t find a job, don’t.

Starting a law firm is more than a job. It is an entire life shift. You become a business owner, which is a lot different than being a lawyer. And, depending on where you are in your career, you may have to do most or all of the business stuff (what I called “Erick work”) on your own. This is doubly true if you don’t have any partners.

So the first question is: why am I doing this and do I really want to do this? Dig deep and think it out. Only you can answer the question, but if you fail to ask the question you run the risk of looking back in six months or six years and realizing you’ve made a huge mistake.

2. Do I have the knowledge and skills to do this?

When I went to law school, the standard curriculum barely taught how to be a lawyer. And they certainly didn’t teach how to run a business. While that has changed somewhat in the last decade, it hasn’t completely changed. So you have to ask yourself if you have the legal and business skills to both run a company and represent clients.

The Legal Skills

There is some debate about which skills should come first, the legal skills or the business skills. But I am a firm believer you have to have the legal knowledge to represent clients before even thinking about opening a law firm. Otherwise, you risk malpractice and ruining people’s lives. Being a lawyer is a weighty responsibility. We have people’s careers, money, businesses, and sometimes their literal lives in our hands.

But Josh, how am I supposed to get experience if I don’t work at a firm first?

I did not work at a firm before starting my own and got along fine. After four years of college mock trial, three years of law school mock trial, clinics, and internships, I understood the basics of representing people in court. What I didn’t know were daily nuts and bolts. Like how to file a motion to suppress. How does a case get scheduled for trial? What are the logistics for filing an appeal? Do I just declare we want an appeal like Michael Scott declaring bankruptcy?

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This is where the trial court clerkship was invaluable. But if you can’t get a clerkship, another valuable resource is your local bar. Meet with other attorneys. Watch people in court. Shadow other lawyers. Of course, this only applies to those fresh out of law school.

The question of requisite legal skills also applies to the lawyer with some experience under their belt looking to start their own solo venture. It will be very tempting to handle whatever walks in the door, from divorces to DUIs. Again, the question becomes: do you have the requisite skill and knowledge to do this? Don’t dabble. It’s a recipe for disaster.

The Business Skills

The business side of the firm is, of course, easier to outsource. If you are starting a firm with a nice number of existing clients or partners and cash to spare, hiring a bookkeeper, advertising company, law firm startup consultant, and staff can make your life much easier. Then you will have a lot less on your plate. But most folks starting their firm are not in this position. They need to be a jack of all trades for a bit.

Luckily, the business side is easier to learn than the legal skills. There are books, podcasts, and YouTube channels out there chock full of information for the aspiring small business owner. Most small business advice, even when not tailored to law firms, is applicable. But it still takes work to understand balance sheets and budgets. To plan for advertising costs and figure out how much to spend on software, equipment, and office space. Are you ready to think about these things? Or do you want to ‘just be a lawyer’? If it’s the latter, starting a firm may not be for you. Unless you find a terrific partner who can do the business side while you focus on the law.

3. Do I have the support to do this?

I don’t mean hiring support staff, although good for you if you have the initial startup cash for that. I mean professional support and family support.

Let’s start with professional support. Do you have a network of other lawyers, business professionals, and colleagues who can help support you in this endeavor? Do you have relationships with the court if you’re trying to get court-appointed work? None of these are must-haves, but they are things to consider before starting your firm. And once you’ve considered them, remember to use them! Don’t hesitate to reach out to more senior members of the bar for advice. Go to CLEs and learn things and meet people. Let your colleagues know of your plans and let them know you’re looking for referral partners. When smaller cases come in the door that I want to refer out, I try to refer them to lawyers just starting out who are hungry for work.

Support from your family and friends can be more important and more difficult to obtain. If you have a family to provide for financially, it can be even more stressful. So whether it is your significant other, your extended family, or your chosen family, you will want their buy-in. From a pure logistics view, of course, you will need your significant other on board if it means a salary cut, longer hours, or a personal financial investment.

Beyond your immediate family, having support from extended family can make all the difference. They are (hopefully) your biggest cheerleaders. Use them. Make sure they are spreading the word that if someone got in trouble, you’re the one to call. Have them tell their hairdresser, their accountant, and their next-door neighbor that you’re the gal to call if they need a will.

4. Can I afford to do this?

Most small businesses do not make any profit for at least six months, sometimes twelve. When lawyers ask me about starting their own firm I always advise them to be able to live off of savings for at least three months. This is even more critical for contingency-based work like personal injury law.

Like any small business, law firms need some time to get cash in the door. Even if you are starting with existing clients, the first bills will not be due right away, and you will have startup costs of at least a few thousand dollars. So remember to budget and plan and consider this before starting that LLC.

5. What are my goals?

This is the hardest question to answer, and ties in with the first one. See how I did that? Any excuse to make a sandwich.

You don’t have to have all your goals planned out. And they’ll change. When I started my firm, the goal was to get by. Eventually, the goal became to grow so we could expand. Then the goal became making sure our business was steady so I could fully hand it off to my partner when I decided to move 300 miles away. Today, at my current firm, I tell people I’m in the empire business. We are growing in revenue and bodies and my medium-term goal is to be able to transition to just running the firm and bringing in clients rather than running around to court.

But those are my goals. What are your short-term goals? How much money do you need to make in the first two years?

What are your medium term goals? Do you want to be a true solo? Expand and bring on a partner?

How about long term? Is this just something to do for a few years and then try to get acquired by a bigger firm? Do you want to acquire another firm and grab their book of business? The long term possibilities are exciting, terrifying, and endless.

Bonus: What Should My First Steps Be?

Any lawyer knows not to say you only have a few questions. So here we are, the sixth question. You’ve gone through these five and decided running a law firm is for you. What’s next?

Your first step is a budget. How much cash do you have to invest and spend on startup costs, hardware, software, office space, advertising, etc. Once you know that number, you can make decisions about entity formation, renting an office, etc. From there it’s time to decide on things like practice management software, who to hire to build a website, which computer to buy, and so forth.

Don’t know the answers to those questions? Follow me to be notified as I continue with more tips on starting and running a law firm and reviewing all the technology you need (or want) to succeed.

 

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