Most new grads choose to join an established law firm when they finish law school to reap the benefits of a pool of clients, mentorship from experienced lawyers, and freedom from running the day-to-day business.
Others prefer the control and flexibility of starting their own solo firm. Though it’s a little scary, they take the risk and head off on their own.
Starting from the ground up isn’t easy and it could take time to become stable and profitable. If you’re considering leaving your stable firm for a solo venture, you don’t need to do it as a side hustle, but you do need to plan accordingly.
Plan Your Finances
Lawyers often graduate law school with student loan debt, which is sometimes substantial. With that financial obligation in mind, an established law firm offers stability and a steady paycheck to get on track. It also comes with benefits like health insurance and paid time off.
When you go out on your own, all of these financial burdens fall on you. There isn’t the luxury of an established client base with steady revenue, and it could take months to draw in clients and income.
Before you take the leap, create a plan for your finances. You should have a cushion for your personal and professional finances for at least a year, or two if you can. This way, if something unexpected comes up, you have some peace of mind.
You should also consider the expenses that come up when you’re starting a law firm, including office space, furniture, décor, office supplies, technology and equipment, tools for virtual consultations and scheduling, and utilities.
There are several mandatory professional services you have to pay for as well, including membership in legal databases, licensing, and professional and malpractice insurance. If you plan to hire staff, consider their salary and benefits in your estimates.
Some lawyers choose to go out on their own without a financial cushion, and that’s okay! If you’re comfortable, go for it. But you should still plan your expenses to prepare for what may come up when you’re starting out.
Consider Your Practice Area
When you join an established law firm, you may have the luxury to focus on a niche practice area like criminal defense. You’ll also have the benefit of senior partners who can mentor you and guide you as you navigate your legal career.
When you’re on your own, you won’t have this safety net. You probably won’t be able to afford to be picky and choose only cases that interest you – you have to pay the bills. When you’re making ends meet, you may want to focus on a wide range of practice areas to bring in more clients and build your presence and reputation.
Conversely, being a solo firm may give you access to smaller cases that the big firms don’t have time for. This is a good way to get the ball rolling and build your practice.
Think About Work-Life Balance
Many young lawyers have complaints about the long hours and grueling schedule at an established firm. You won’t have seniority to delegate tasks. In fact, you’re probably the one getting tasks assigned to you by senior staff. But with that, you don’t have to worry about loose ends, missed court dates, filing deadlines, or catching up if you’re ill and have to take time off.
When you’re on your own, the work-life balance may not necessarily be better, at least at first. You may work without a day off for weeks, and you need to be prepared for how demanding this schedule can be while you’re starting out. Everything at the firm depends on your work, and it falls on you if you make mistakes or miss important deadlines.
Keep Your Discipline
Flexibility and autonomy are major benefits of starting your own firm instead of working for an established firm. When you’re a new grad or associate, the senior partners will assign cases and clients to you. These positions rarely have the authority to refuse a case or ask for a case that’s interesting to them.
On your own, you have the flexibility to set your hours, choose your cases and caseload, or work remotely or in the office. You’re your own boss, and you set the pace, even if you bring on more lawyers in the future.
But with that, you may not have the opportunity to be picky in the beginning. As mentioned, starting a business – any business – often involves long hours and weeks without a break. You may not have the option to decline cases if you need clients and money coming in. The day will come when you’re in full control, but don’t expect it to happen immediately.
Plan Your Compensation Structure
Lawyers have a lot of different ways to bill. You can be compensated by the hour, with a flat fee, on retainer, or on a contingency basis. This pay structure depends on the type of law firm and the practice area.
For example, personal injury attorneys often work on contingency and they’re paid when the case concludes and compensation is recovered for the client. If you lose, you won’t get compensation.
Most often, lawyers bill by the hour and they don’t take care of the billing process. Another staff member tracks time sends out invoices and receives the client’s payment. With your own practice, you’re responsible for all of that.
The pay structure you choose will determine how much you could make and how quickly you’re paid, but you must also consider the expectations of your clients within your area of practice. If you’re charging a retainer or flat fee for personal injuries, you may not attract any clients. You may also be waiting months before your firm has the profits to give yourself a paycheck.
Leave on Good Terms
The terms of leaving your current firm can make or break your solo firm. It’s vital to leave on good terms and maintain transparency with your firm to build a good professional relationship for the future.
When you’re going out on your own, you need to consider how you’ll attract clients and whether your firm will be helpful with referrals. For example, a large firm may handle big cases, but they could hand off the referrals for small cases, such as prenuptial agreements, to you.
If you leave on bad terms or try to steal clients as you leave, you probably won’t get this courtesy. In return, you can hand off big cases that are out of your current scope or capacity to your current firm, and the arrangement works for everyone.
Consider Client Acquisition
Lawyers used to be able to count on name and reputation to bring in business, but that’s not the case with the current competition on the market. Clients find law firms in a number of ways, from online advertising to print ads to billboards, so you need more than a name and other lawyers to bring in new clients.
You should have a strategy in place for client acquisition before you open your firm. Consider your marketing mix and budget, what channels you’ll advertise on, and your brand assets and messaging. Make sure you have an overall strategy with goals, client profiles, a well-designed website, social media accounts, and the appropriate mix of traditional and digital marketing for your audience.
Use Your Network
If you can work out a referral program with your previous law firm, that’s a great start. If not, you will need to use your own personal and professional network to gain referrals. Consider your family and friends, former classmates, and acquaintances, as well as businesses that may have a connection to your area of practice.
For example, counselors and therapists may have referrals for a family law firm. If you’re in personal injury law, a local doctor’s office or physical therapy office may have referrals. For tax law, you can speak to your accountant or other business owners you know.
Networking should begin the moment you decide you’re starting a solo firm. Let people know early and give them a timeframe for when you think you’ll launch your firm.
Remember that there are rules for what you can tell clients at your current firm. It’s not ethical or appropriate to try to recruit clients from your current firm. You can speak to your personal and professional network outside of your firm, however, and prepare them for your future departure.
Get Started with Your Solo Firm
Going out on your own and building a firm from the ground up is overwhelming and a little scary, but it’s a great opportunity for your career. It’ll take work in the beginning, but over time, you can build a steady flow of clients, take the cases you want, and set your own hours. And best of all, all the money you make is your own! Just prepare with a solid plan for how you’ll leave your firm and how you’ll weather the challenges in your startup period.
—
Author Bio: Maxwell Hills is the founder of Hills Law Group, a premier Orange County divorce lawyer law firm with a concentration on high net worth divorces. Max’s entrepreneurial career stretches back to his teenage days when he had his music used in Grey’s Anatomy and ESPN. Today, Max has used that experience to build Hills Law Group with 0 customers and $0 in revenue into a respected firm in the industry.
Image Credit: freepik.com
