Whatever your motives, you've decided it is time to take the plunge: you are going to start your own firm. But, making the decision to strike out on your own, believe it or not, is the easy part. Now you need to figure out just what it takes to start a viable, let alone successful, legal practice from nothing.
At LawMaster, we've been developing practice management solutions for law firms of all sizes for nearly thirty years. And, we're proud to say we've helped our fair share of start-up legal practices not just get to their feet, but also grow. For example, just three months after our start-up client Lawhub transitioned to LawMaster's integrated practice management software from its incumbent multi-platform solution, its revenues had surged 36% ahead of budget thanks to its lawyers capturing more billable time, a reduction in running costs, and a host of efficiencies made possible by the LawMaster software.
Here are a few insights on starting your own legal practice that we've gathered along the way:
What Will It Cost and How Long Can You Survive?
Before you let office space, hire an admin, or send out announcements, you will need to identify the bare minimum infrastructure your firm will need to operate, which typically will include office space (including somewhere you can meet with clients in confidence), a phone line, basic IT hardware and service, firm management software, insurance, stationery, access to legal research and knowledge bases, and professional attire. Do your research and figure out how much those basics will cost you on a monthly basis, then run your estimates by a seasoned lawyer for feedback, and revise accordingly.
Once you have confidence in your numbers, draw a deep breath and ask yourself: "How long can I survive without earning a dollar?" On the day it opens its doors, your firm may well have no clients, no reputation, nothing but your talent and determination to succeed. It could take six months or more to begin seeing revenue. You should have enough set aside to carry you through at least that long, covering both your estimated firm expenses and your personal needs too.
How Will You Attract Clients and Generate Revenue?
Of course, your goal will be start billing immediately, and presumably you wouldn't be starting your own firm without having at least a general idea of who your clients might be, and how you'll attract them. But, if you want to maximise your odds of success, you should have more than just an idea. You should have a detailed marketing plan that identifies the specific client market you expect to target. Develop a clear plan for building a specific practice speciality, and try to learn as much as possible about how much competition you'll face for new clients. Research billing rates and set conservative goals for revenue generation. Then, take your revenue goal and cut it in half. If that's all you earn the first year, will it be enough to keep you going? If not, revise your plan until you feel confident there's a market out there in which you can keep your head above water.
Be Prepared With An Integrated, Scalable Practice Management Solution
You open your doors and after a few lean months, work starts rolling in. Are you prepared to handle the extra work that now comes with managing client relationships, trust accounts, time-keeping and billing, just to name a few? With LawMaster's small firm practice management solution you will be, and not just in the sense of shouldering administrative tasks. Our solution will also help you track your performance, to identify your most profitable clients, matters, and fee structures. When the time comes for you to add your first employee, an admin perhaps, or maybe another lawyer, your practice management software should be intuitive, simple to learn, and scalable, keeping growing pains to a minimum and ensuring that you have a consistent set of data and reporting capabilities to track your firm's progress over time.
It is no small task to build your own law firm from the ground up. But, by asking and answering the right questions, and benefiting from LawMaster's three decades of experience, you can succeed. Contact us today to start a conversation about how we can help.