Looking to start your own law firm but don’t know how to go about it? Starting a law firm can be as challenging as starting any other business, or even more. Contrary to what you may think, being a lawyer doesn’t make it any easier.
While being a lawyer equips you with the necessary skills and knowledge to guide and offer services to a businessman, it doesn’t give you the essential skills needed to run a business successfully. Running a law firm is a business, and it requires separate skills from the ones needed to practice law.
This article will guide you through the essential steps you need to take to start your own law firm. But before we go into that, have you asked yourself, “Why should I own a law firm?”
Why Should You Own a Law Firm?
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Before you quit your job to open your own law firm, you have to be ready for the demands that come with it. Apart from taking up cases and practicing law, which is your dream profession, you’ll also have to hire and handle employees, take care of staff payroll, work to acquire clients, and even carry out client communication and follow-up. To run your law firm successfully, you need to understand you have to handle it as a business and a profession.
There’s no doubt that working for someone as a lawyer can be challenging and, maybe, demoralizing. At some point, you might start questioning your decision to become a lawyer in the first place. It’s understandable given the level of workload, sleepless nights, uninspiring cases, poor work culture, and even horrible bosses. There might as well be a case of sexual harassment from your employer.
Though it can be challenging to own and run a law firm, the benefits outweigh the drawbacks, especially if you have the desire and patience to make it work. So, if you ever found yourself asking if you should start a law firm, here are the benefits of doing so:
- Owning a law firm affords you the opportunity to be your own boss
- You finally get to work only on those cases you find interesting
- You get to choose your employees and clients yourself. You now have the privilege to attract top talents to your law firm
- Owning a law firm allows you to create the work culture and reputation you desire
- You’ll be the one to decide how much you bill clients and how many percent of it goes into your pocket
- Owning a law firm affords you the opportunity to mold yourself into an expert. You’ll acquire experiences as a lawyer, employee, business owner, and even as a negotiator.
Is starting a law firm profitable in the United States and the UK? Starting your own law firm can be rewarding, but you have to be ready to deal with the discomfort that comes with running a business. If you desire the benefits above and wish to set up your own law firm, let’s look at the necessary steps you need to take.
What Steps Do You Need to Take to Start Your Own Law Firm?
These are the steps you need to take to set up your own law firm:
Decide You Want to Own a Law Firm
The first step to starting your own law firm is deciding if it’s really something you want to do. Most law graduates allow themselves to be misled by the euphoria of being their own boss and rush to set up their own law firms. Unfortunately, when they venture into it, they find out it’s not as easy as they thought.
Is it easy to start a law firm? Starting a law firm is an uphill task. You shouldn’t undertake it if all you desire is to study cases and practice law. This is because owning a law firm doubles as practicing law and running a business. Practicing law and running a business are demanding on their own.
However, if you’ve decided to start your own law firm, let’s proceed to the next thing you should do.
Determine the Entity Structure of the Law Firm
Whether you want a sole proprietorship, a partnership, a limited liability company, or a corporation, this is where you make your decision. The entity structure you choose affects you in a lot of ways. While a sole proprietorship and general partnership expose you to business profits and liabilities, a limited liability partnership or company and a corporation protect your personal belongings from business shortfalls.
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Prepare a Business Plan for Your Legal Firm
Once you’ve decided on the structure of your law firm, the next thing is to prepare a business plan. A law firm business plan is like your third eye; it helps you look at the business from an objective point of view.
Preparing a business plan helps you produce workable, achievable business goals and objectives. This is also where you state your management plans, source of capital, and operational plans. A business plan typically walks you through the journey of setting up your business, from the point of ideation to the point of execution.
Register Your Law Firm
Having gotten clarifications and directions from your business plan, the next stage is to register your business. With over 26% of American lawyers being solo practitioners, there’s a need for you to create a brand identity. And you can only do this by registering your business and obtaining the necessary permits and licenses. At this stage, your firm is ready to start taking on clients and other legal engagements.
Registering your law firm in the United States and getting the necessary permits and licenses is important. It’s also important you work towards getting professional liability insurance.
Get Professional Liability Insurance
Professional liability insurance, commonly known as errors and omissions in the US, is a type of liability insurance that covers business owners from claims of negligence. Getting this type of business insurance is necessary. It prevents your clients from suing your law firm for errors that led to them encountering financial losses. This is especially important if you’re starting off without experience in legal practice.
Promote Your Legal Firm
Unless you’ve had years of experience in legal practice and gathered lots of loyal clients, you’d have no clients, to begin with. Lawyers who gather experience and connections before they start their law firms don’t struggle much in this regard. Most times, their clients transfer their cases to their new law firm without hesitation.
If you’re a new lawyer who has zero experience in legal practice, you need to adopt more online and offline promotional strategies. While talking to your law school colleagues, family, and friends works, building a strong online presence is important. You can start by setting up a website where you educate people about their legal rights. Your attorney blog will also teach your prospects how to defend themselves. You can also take on pro bono cases and gain experience and exposure with them.
If you opt to open a website for your law firm, a good knowledge of technical SEO for attorneys will help you build a good client base with little or no advertising cost.
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Conclusion on How to Set Up Your Own Law Firm
The challenges of having your own law firm can be energy-draining. You’ll get exhausted from handling tasks that are not related to legal practice. Examples of tasks you will face that are not related to legal practice are:
- The task of setting up the business
- Administrative duties, payroll tasks, employee recruitment, and management
- Law firm leads generation and marketing, etc.
Is starting your own law firm worth it? The rewards of starting your own law firm are numerous and surely drain out the challenges. The fulfillment that comes from practicing the kind of law you want, taking up the kind of clients you want, and working the number of hours you want in a week is out of this world. You’d also get to handle the income: pay your employees, take care of business financial obligations, and decide what happens to the remaining money. That is something most public attorneys don’t get to enjoy.
Hopefully, this article has given you the information you need to start your own law firm. Cheers to a rewarding career and business ahead!