Starting Your Own Law Practice?
Starting your own law firm offers multiple benefits. You can define the firm’s practice areas, select which clients you want to work with, and – most importantly – be your own boss.
That said, if you want your business initiative to succeed, you’ll have to put in the work. Law firms collapse for diverse reasons, from failure to bring in enough clients to disputes between partners. If you’re going to start your own law practice, advanced planning can help you avoid the common pitfalls.
12-Step Checklist: Considerations for Starting Your Own Law Practice
Starting your own law firm is an exciting career move. The below checklist can help guide the process.
1. Define Your Niche
The legal field is vast, covering everything from family law to copyright and intellectual property. Defining your niche may allow you to deepen your understanding of the law in a set field and can help you brand yourself as an authority in that practice area.
If you already have extensive experience in a specific field from working for other law firms, you may choose to pursue that path.
2. Decide Whether to Go Solo or Partner Up
When you start your own law practice, consider whether you want a partner. This offers some advantages, like sharing the burden of overhead costs.
If you choose to take on a partner, make sure the business relationship is clearly defined in the business plan (more on that below). For example, you should clarify the partnership shares and rights.
3. Get the Necessary Licenses
Wherever you choose to set up shop, you will need the necessary license to practice law in that state.
You should further register your business with the state. Creating a formal entity like a limited liability company, LLC, can help protect your personal assets if liability issues arise (e.g., a client sues you for malpractice). Check with your state’s bar to confirm what professional and business licenses you need.
4. Write Your Business Plan
A business plan provides details regarding how your business is managed. This document should include a description of your law firm’s services, business entity, and management structure. It should further provide financial projections (which you may need if you want to secure external funding) and a marketing plan – more on those points below.
5. Figure Out Your Startup Costs
Tally up your startup costs to determine how much you’ll need to establish your law practice. Expenses include office space, furniture, and supplies; hardware like phones, computers, and document scanners; legal software (e.g., legal research tools); marketing costs; and professional expenses, such as professional liability insurance.
You will also need money in the bank to cover your day-to-day living costs until your law firm starts earning money. If you don’t have the funds to cover this yourself, you may need to borrow it. While you can turn to a bank loan, you can also look to less traditional sources, such as a U.S. Small Business Administration loan, credit card, or personal loan, e.g., from family.
6. Set Up a Business Bank Account
It’s best to have a distinct business bank account to separate your personal finances from your law firm’s.
If you start your own law practice with a partner, a different business bank account can help avoid money disputes. It can also simplify bookkeeping and tax filing. Note that you may need to prove that your business entity is registered with the state to open a business bank account.
7. Invest in the Necessary Office Space and Supplies
Decide whether your law firm will be a traditional brick-and-mortar space or a virtual firm.
These days, a physical location isn’t always necessary, and relying on a virtual office can help you cut overhead costs. You can also save money on office furniture – although you still need to account for costs of office supplies like paper, printer cartridges, and postage.
That said, you do need a plan for meeting clients. Will you offer to meet them at their homes? Is there a coworking space where you can rent private offices on a per-hour basis? It’s good to come up with these solutions in advance.
8. Buy the Tech Tools You’ll Need
Whether you opt for a traditional office space or not, you will need basic office technology like a computer, scanner, and printer.
Certain software products can further help streamline your business operations. Possibilities include timekeeping and billing software, law practice management software, and a basic office suite of tools (with calendar, email, and document management capacity).
9. Create a Website
Your law firm’s website should be organized and provide helpful information for potential clients. This includes details like your practice areas, credentials as a lawyer, service area, and contact details.
A website can also be a valuable marketing tool. For example, search engine optimization (SEO) makes it easy for people to find your law firm via Google.
10. Start Marketing Your Services
Website SEO is just one of many marketing techniques you have at your disposal as a law firm. You can also use social media marketing, content marketing, and traditional advertising (e.g., television ads or billboards) to attract clientele.
11. Foster Your Relationships
As your marketing initiatives take hold and start bringing in clients, take care to foster these relationships. Word of mouth can be a powerful marketing tool. Further, cultivate your relationships with other attorneys in your field – for example, ex-colleagues at your former place of employment. You never know what relationships may result in new work.
12. Get Insurance to Help Protect Your Firm
After taking all the above steps to start your own law practice, the last thing you want is to jeopardize its future because of legal issues. Malpractice insurance can help cover you and pay for damages related to professional liability claims.
Start a Law Firm with Confidence
Attorney’s Advantage provides business owners policies for lawyers that bring together various commercial property and liability coverage types. This kind of package offer can help you save money as you start your new law firm while providing coverage to help you proceed with confidence.
Get a quote today.