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A Comprehensive Guide to Starting a Law Firm

In 2008, I decided to leave my job as an attorney at a firm and start my own law practice. I went from having no clients in the midst of a recession to now having thousands of clients and a dozen employees. But it wasn’t easy. I had to put in a lot of hard work and time to get my firm to where it is now.

If you are an attorney considering starting your own practice, this article highlights the steps you need to take to ensure your new company is prepared to launch.

To learn more about how to start, manage and grow a law practice, check out Josh’s YouTube channel.

Is starting a law firm right for you?

The very first thing you need to consider when deciding whether you should start your own law practice is if owning a business is right for you. It requires a lot of hard work that goes beyond just practicing law.  In order to be successful, you need to work a lot of hours and take care of general business tasks like billing and marketing.

If you want more out of your legal career, but all this extra effort seems like too much stress, you can often take on more responsibilities and unique tasks within the structure of your current firm.

Laying the foundation to your firm

If you do decide to move forward with starting your own firm, there are two things to decide on from a brand perspective before getting into the nitty gritty of the business.

1. Picking a niche

One of the most important decisions you will be faced with when setting up your law firm is which niche you will be working in. This will impact the clients you market to, your marketing materials, your day-to-day activities, and so many other aspects of your business.

Pick an area of law that you can get really good at and that doesn’t have too much competition. Your aim should be to become an expert in that field and to brand yourself as such. Narrowing your offering can also make it easier to target clients and market your company through online ads.

When I first started my law firm in 2008, I created two different websites: one for a general legal practice, and one with a focus on trademarks. After I started running Google Ads for both sites, I noticed that the more specific trademark website was resulting in a lot more conversions. People search for their specific issue that they need a lawyer for, rather than look up lawyers in general. So finding a niche can help potential find you as well.

2.  Creating a client acquisition plan

Before walking away from a secure job, make sure you know how and where to find clients. For me, it was by using Google Ads. For you, it might be different. It’s important to not jump into creating a solo practice before you understand if you can actually find clients that will hire you.

To learn more about how to start, manage and grow a law practice, check out Josh’s YouTube channel.

Everything you need to start your own firm

Once you have determined your niche and how you’re going to acquire clients, the next step is to get together everything you need to have ready to open the doors to your firm. This stage of the process can be daunting if you don’t know where to start, but it’s essential to have ready to go. Here are the ten things you must have set-up before you should open your business.

1. Firm name

One of the first things you need is a name for your firm. In recent years, there has been a shift away from traditional names, like last names, to more unique names. As a trademark attorney, I see the value in less traditional names because they can be easier to protect from an IP point of view. It also prevents the mess of having to rename your firm if a partner decides to leave in the future.

Once you decide on a name, it is essential that you begin the trademark registration process to protect the mark and to ensure you don’t infringe on someone else’s brand.

2. Corporate entity

Set-up your law firm as a corporate entity, rather than a sole proprietorship. Being a limited liability company or a PLLC gives you liability protection, which is essential. Be sure to talk to an accountant when figuring out the specifics of this step. You will likely be an S-Corp, which is a tax designation that allows for passthrough taxation on your income.

3. Website

In today’s age, a website is critical. This is one of the biggest ways you will likely be acquiring clients, so make sure your website is clean, informative, and easy to navigate. It is so important that you should invest around $10,000 to $15,000 on a good, responsive website.

4. Credit Cards

The next step is to make sure you are ready to take credit cards. Don’t rely on requesting checks for your services, because credit cards are faster and easier to work with. You don’t want to have accounts receivable, especially when you’re starting out.

I recommend using authorize.net to get started accepting credit cards. Then, you need to talk with your bank about a merchant account. Look around before choosing a bank to with because they all have different rates.

5. Phone System

Avoid having a fancy phone system. It’s not worth the cost. All you need to do is be able to answer phone calls from potential and current clients. Go with either Voice Over IP or just a separate cell phone. Voice Over IP is great because any missed messaged will be transcribed and sent to your email, while a cell phone is just easy to adapt to.

6. Email

Find an email that works for you and have it ready to go. We use Gmail in my firm, which comes with a bunch of enterprise solutions that make my employees jobs easier. There are so many apps you can connect to your mail to manage your messages, so it’s a great organization tool too. Outlook is another option that many new firms consider using because they’re familiar with it. If it’s easier to stick with something that you already know the ins-and-outs of, then go with that. However, I find that Google provides a lot more customization.

7. IT Security System

As a law firm, one of the most important things is protecting your clients. Make sure you have IT security systems in place that prevent anyone from accessing your emails or records. Use two-factor authorization for your email, encrypt emails if necessary, and have a retention plan for any files saved to the cloud.

8. Client Engagement Forms

Prepare client engagement forms before you open your law practice so that you don’t have to scramble to put something together when you get your first client. There are many templates you can reference online if you need guidance with this step.

9. Docketing System

Depending on your practice area, you will have different requirements when choosing a docketing system. You need to ensure you can keep track of cases, whether that’s through a calendaring system or an off-the-shelf program for attorneys.

10. Malpractice Insurance

The final thing you should have ready to go before you launch your law firm is malpractice insurance. It’s never a fun thing to have to pay for, but it’s essential to protect you if it’s ever needed. Do your research and expect to have to pay a lot of money for this. I also recommend talking with an insurance broker to see if there are any other types of insurance you may need for your business.

Bonus: Office Space

The one thing I do not suggest doing is investing in a fancy office space and signing a long-term lease. When you’re just starting out, you don’t need to be putting money in a room. Work in coffee shops or from your apartment and save some money. If you think you will need to meet with clients often, go to them instead. They’re probably appreciate the gesture. Not finding an office allows you to be flexible and to keep your fees down.

If you’re serious about starting your own firm, this list will ensure you have everything you need to hit the ground running and bring in clients. If you have any further questions about going solo, feel free to reach out to me at josh@joshgerben.com.

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