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Small Business Basics

Where to begin? A guide to starting your own law firm

Everything you need to know about starting your own law firm.

February 27 · min read

Starting your own law firm can seem overwhelming at first, but getting it right can be a pretty rewarding experience. Not only do you get to be your own boss, but it can also give you flexibility and financial independence.

However, setting up a legal practice is something that requires a lot more than passion. You must first possess the right stuff — an entrepreneurial, adventurous spirit and an unshakeable drive to succeed. Law school may be good at producing top-quality new lawyers, but they don’t really touch on the ins and outs of setting up a law office, let alone positioning it for success.

The good news is many thriving law firms today started where you are right now. With the right foundation, you can set up your own legal practice and join their ranks too.

With that in mind, here’s everything you need to know about starting your own law firm.

First, make sure you’ve got what it takes

Anyone can be a business owner. The hard part is running the business smoothly and maintaining profitability. For this, you need to understand the fundamentals of business ownership, particularly a startup law firm. You must also be licensed by the American Bar Association (ABA) and/or any other relevant organization to practice law.

Running a law firm is different from running a retail business. Your legal practice is both a profession and a business — like different sides of the same coin. It’s on you to find that perfect balance between maintaining top-quality legal work and at the same time navigating all the nuances that come with founding and managing a startup.

It certainly helps if you’ve already got a retinue of clients, so you are at least assured of some income. That’s why the usual practice is to work for a couple of years with a law firm, hone your skills, and ramp up your experience before setting out on your own.

Can I start my own law firm fresh out of law school?

Of course, you can! Many new lawyers want to establish themselves quickly and launching a solo practice or small law firm after they graduate law school is a great way to go about it. However, it’s crucial that you at least have decent funding in place.

One of the major barriers to starting a law firm, or any business for that matter, is funding and the lack thereof. Everything from research and branding to registration and daily operations — all of them will require funding. You’re not doing yourself any favors by trying to do everything all at the same time.

How do I know that the time is right to start my own law practice?

Right off the bat, there’s no standard answer for this kind of question. Ultimately, it is you who must decide to make that move and keep pushing forward with all you’ve got until you become the go-to law firm in your community.

That being said, several signs might indicate the need for a career shift and finally give ‘being your own boss’ a try. These include:

  • You’re a natural leader

You know what needs to be done, and you have the discipline to see things through. Many first-time business owners struggle because they’re used to having a boss to tell them what to do. That was safe and structured; now it’s like you’re in uncharted waters.

Having the discipline and determination to succeed are what make you a leader. And you need to be first a leader if you’re going to run your own business someday.

  • Your mind is bubbling with great ideas

There’s no telling when inspiration strikes, but when it keeps coming up, you should definitely lean into it. Perhaps you excel at your area of law, and you have ideas that would significantly improve the firm’s legal practice. Perhaps you’re spotting mistakes in your firm’s current processes, and you have actionable solutions.

  • You’re tired of the work culture

Whether it’s the office politics or the unfavorable work hours, or anything else about the work culture that you can’t seem to stand anymore. Sometimes, it’s enough to make you want to make the switch to solo practice.

  • You want a new challenge

Perhaps you’ve been considering expanding your legal practice areas. Maybe your current law practice has fallen into a dull routine, and the boredom is starting to make you restless. This is an excellent time to reevaluate what you want from your professional career.

  • You’re sure you can have work

This is just being practical. If you already have clients lined up and enjoy working with you, starting your law firm gets so much easier. So brush up your address book and get ready to start connecting with existing and potential clients.

Starting a new business involves a ton of hard work and perseverance. It will also be a learning experience unlike any other. If that’s where you see yourself, then go for it.

Checklist for starting your own law practice

1. Develop your business plan

Be as detailed as possible. Clearly outline everything about your law firm, from the mission statement to the staffing structure, profitability analysis, market research, and everything else in between.

Your business plan is the foundation of your new firm. Make sure it’s a solid one. Do all the necessary research to understand the landscape — market opportunities, competition, operating expenses, billing and invoicing strategies, etc.

2. Decide on your legal practice area

Naturally, you’ll want to play to your area of expertise. Drill down on a particular practice area and deliver the best possible legal work. This will help build your credibility much faster and possibly open the doors to more opportunities.

These days, it’s rare for law professionals to offer a generic legal practice. Of course, these practice areas are also quite broad, meaning there’s always room for expansion. For instance, family law covers everything from marriages and civil unions to care of children and property (real estate) division.

3. Form your entity

Start by choosing an appropriate business name for your law firm. A common practice is to choose a name based on your area of expertise. Another is to use your own name.

Whichever name you choose, make sure it’s unique and not misleading. For instance, if you’re starting a solo practice, using the words “and Associates” or “Group” in your business name is misleading. This violates the Rules of Professional Conduct. The state bar may also have some requirements.

4. Decide on your law firm’s business structure

What kind of business are you looking to create? For instance, you’re starting a one-man firm, you could choose sole proprietorship or single-member limited liability company (LLC) entity. On the other hand, multi-member firms typically go for limited liability partnerships (LLP) and professional corporations.

When deciding on your business structure, also remember to consider your plans for the future. For example, if you initially register as a sole proprietor, you’ll need to change the business structure if you decide to take on a professional partner.

5. Find your ideal location

Your ideal location is simply the best possible place for potential clients to find you. Shop around for affordable office spaces, ideally not too far away from where you live.

It also depends on your clientele. If you cater to premium clients, you should have your own office space. This builds trust and establishes your reputation in the industry. However, there’s no reason not to start small —shared office space or maybe even remote working.

6. Invest in must-have automation tools

One of the most important tools you’ll need in your law firm is a Customer Relationship Management (CRM) system. CRM tools can help take on a big chunk of your day-to-day operations, thereby freeing up precious time that you can spend on actual billable work.

Check out: Our top picks for best CRM software in 2021 for law firms

Other categories that you can automate include:

  • Scheduling and appointments
  • Proposal writing
  • Invoicing
  • Project management
  • Video conferencing
  • Bookkeeping

7. Set up your firm’s banking

You’ll need a designated operating account as soon as you register your new firm, even as a solo lawyer. There’s also the Interest on Lawyers Trust Account (IOLTA), which is essentially a unique way of raising funding for charitable purposes.

Put some thought into the kind of bank you want for your business account. Sometimes, a small credit union in your neighborhood can offer more value than a national bank. Particularly look for their offerings for startups and small businesses.

  • Maintain low overheads

You may be surprised at how quickly every dollar adds up now that you’re a business owner. Some expenses can’t be helped, but it’s also important to know when to be frugal. One of the biggest capital expenditures is office space. Another is your initial marketing costs.

One great way to keep this down is to put in some word of mouth marketing. Everyone is a potential referral source. You never know if your next client will come from these referrals.

8. Build your official law firm website

Having an online presence is so crucial that it has now firmly cemented its place in the business development process. There are many ways to define what an online presence means, but it always starts with an excellent website for a law firm.

A well-designed website gives your law firm a certain professional appeal. It’s the perfect way to announce your business to the world and begin carving out your share of the market. More importantly, most of your new clients will probably come from the web, and they must see and interact with a professional website.

Another reason to invest in a business website is that you get access to valuable consumer insights. It helps with your marketing strategy because you know what’s working and what needs to be tweaked or replaced altogether.

  • Can I build my own business website?

Absolutely! Today, building a website has never been easier. Some platforms even offer hundreds of web design templates and easy website builders, and many freebies for the first year. As this would likely be an important investment, however, it’s always a good idea to hire professional web designers to build your law firm website.

Many things go into building a business website — domain name, web hosting, web design, back-end work, on-page optimization… the list goes on. The last thing you want is to add these concerns to your already full plate. It’s simply more efficient to hire someone to do it for you.

Related: Everything you need to know about law firm web hosting in 2021

B12 is an excellent resource for your law firm’s website. This web design company uses AI technology to automate repeatable tasks in the website building process. The design team then takes over personalizing your website according to your vision.

With B12, you can usually get your completed business website in one to two weeks, plus you get to save on all those upfront costs as the company offers complete end-to-end solutions for website building, maintenance, and marketing.

9. Expand your network

Networking is one of the best ways to attract new clients. Sometimes it’s easy to get all caught up in the day-to-day, but remember to set aside time to cultivate relationships with lawyers and other professionals in your local area. Have your business cards on you at all times.

Consider joining local organizations and professional associations. This is a great way to tap into their Listserv system, allowing you to expand your potential email list and target the right audience.

Marketing your new law firm

Client acquisition and retention are important to running a successful law practice. Your ​marketing strategy is critical to attaining these goals. Let’s break down some proven marketing techniques to lift your new business from relative obscurity to online prominence.

1. Local SEO

You’ve probably heard of search engine optimization. Local SEO is a step further and focuses on optimizing your online presence for local search results. When looking for a particular service, the average user searches for “particular service near me.” Local SEO helps your law practice rank for “near me” searches and builds your credibility in your local area.

2. Social Media

Social media is great for reinforcing your branding and building personalized relationships with your target audience. You can immediately see why this would be crucial to a law firm’s marketing strategy. A sizable, loyal social media follower base can become a consistent source of new work.

3. Blogging

Authority and credibility are must-haves in any business sector, even more so in the legal industry. Blogging regularly helps promote your online image and transform you into a leading industry resource. The more people come to see you as an expert in your field, the more they’re willing to trust what you say. If you don’t have the time to write blogs, you could always do other publications like podcasts and vlogs (video blogs).

4. Paid ads

If you want to get your new business off the ground quickly, consider investing in paid advertising. You’ve probably come across various ads covering different practice areas, including personal injury, dispute resolutions, simple contracts, and so on. Paid ads are also great because you’re only paying when the user takes action (clicks) on your ad. This way, you get to maximize your marketing dollars.

5. Reputation Management

As a lawyer, you already know the value of a reputation. Trust is everything, and people will often judge your business based on its reputation. Even a simple accusation of malpractice can tank your firm’s image. Be transparent with your services, maintain open communication at all times, over-deliver for your clients, and always respond to client reviews and feedback.

Final thoughts

Starting your law firm doesn’t have to be an overwhelming process. The key is to focus on the important stuff and know when to hire experts for the other stuff. For example, B12 can help you with your law firm’s web design needs.

More than that, we offer a full suite of marketing solutions, including SEO, copywriting, blogging, and custom coding, booking and scheduling systems, and many more. Get started with us today, and let’s help you launch your new law firm to greater heights. You can also visit our resource center for more relevant how-to guides and informational posts.

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