Of course, the reality of starting your own firm can be quite different from how you imagine it. Probably, you will face many difficulties, many ups and downs along the way.
Opening a law firm for a young professional is a very attractive prospect. It does not require huge start-up capital. What is more, due to the constant demand for such types of services in America, the investments are paid off fairly quickly. The main difficulty lies only in the lawyer’s ability to build his client base in a short time to ensure profitability. Editor’s note: Young here refers not to age but to the “newness” of the lawyer. Some great lawyers finished law school later in life.
Moreover, the current trend shows the globalization of the legal services market in the US, which makes this field of activity an even more attractive option for a business. In addition, American law firms are at the top of the rankings of law firms in the world.
In this article, we will detail the main features of running a legal business in America and provide a checklist for young lawyers with tips on opening a law firm or set up an llc online.
Should You Open Your Own Firm?
First of all, you should ask yourself if you are ready to open your own law firm. After all, there are many positive aspects of working for a large firm. In big companies, there are already developed working structures, established contacts with clients, accounting, etc. If you open your own company, then the organization of all processes will be on you. This is not easy and very responsible. Are you ready to face various difficulties with attracting new clients, managing personnel and financial aspects, constant monitoring of legislation, establishing contacts with state authorities, and so on?
If your answer is a firm yes, then and you are ready to cope with all the difficulties and risks, then it’s time to open your own company.
How to Start Your Law Firm: Checklist
The first thing a young lawyer should do after he/she decides to start a law company is searching potential clients and competitor’s markets. This will help you get a lot of the information you need to make a business plan.
Next, you will have to describe the main features and strengths of your future firm, plan financial investments, and formulate a marketing strategy. The goals and objectives of the business should also be included in the planning.
Remember, it is always easier and more reliable to work with a clear plan.
The second step on the young professional’s path to his or her own law firm should be the choice of the practice area. Less and less often, lawyers offer universal services. Choosing your field of practice helps you gain a clientele quickly.
Evaluate your strengths and weaknesses to choose the right field. Also, consider the fact that the choice of practice area affects your earnings. For example, lawyers who deal with cases of intellectual property protection earn two or even three times more than specialists in divorce proceedings, labor protection, etc.
Choosing the name of a law firm is one of the most important stages in its foundation. But there are some rules that must be respected while making a decision.
When coming up with creative names, remember that they should not be misleading. Do not use the words “and partners” if you do not have partners or “group” if your firm is not run by a group of people.
Choose the Legal Form of the Business
Determine how you are planning to run your firm and then choose the right business form. If you are going to manage the company on your own, you can choose a sole proprietorship or an LLC. If there will be more than one lawyer running the company, there are some options to choose from:
- Limited liability partnership (LLP);
- Partnership. It is a partnership with unlimited liability of its members;
- Professional corporation. It is similar to usual joint-stock companies in many respects but differs by the fact that only the representatives of a certain profession (in this case – lawyers) can own shares.
A convenient office and its location are very significant for your practice. Check different office options in your area to accurately choose the one that meets all your needs.
Equipping your workplace with everything needed is also important and quite costly. Don’t forget to allocate a part of your budget for a good office setup when making your business plan.
If you do not have a client base yet, or if it is not well developed, you need to consider the ways to attract new customers.
First of all, contact lawyers in related fields. About 31% of clients find a lawyer through a recommendation from another professional. Join local bar associations, so you can meet experienced lawyers, seek advice, and ask questions.
A great idea for attracting clients at the initial stage is to organize free consultations (for example, once a week at certain hours).
Also, an excellent but risky option may be to represent the interests of citizens with an active life position. Especially if it is covered in the media. But in this case, good PR is possible only if the court decision is positive.
Certainly, your clients will not look up your contacts in the phone book. About 37% of people look for law firms through search engines like Google. In this case, the saying “fine feathers make fine birds” can refer to your website because your customer gets the first impression of your company when visiting your site. There, your clients will be able to get acquainted with the list of services the company provides, prices, and make a decision about cooperation.
Moreover, online marketing is very important for the promotion of the lawyer’s services. Most likely, you should consider contacting a marketing company that provides professional services of contextual advertising. They will help you promote your website and attract more clients. Large financial investments will be needed only at the first stage of promotion until the client base is formed. Then, personal recommendations will play a much bigger role.
One of the most difficult aspects of running a law firm is financial planning.
- You need to open a bank account for your business to handle client payments and pay your fees;
- It’s important to set aside money for mandatory expenses: business registration, license fees, taxes, etc;
- Approve a budget for promotion and advertising;
- Determine how you will charge for your services (flat or hourly) and how you will pay your employees if you have any;
- The budget for rent, office renovations, and the purchase of necessary equipment should be well-calculated.
Of course, the reality of starting your own firm can be quite different from how you imagine it. Probably, you will face many difficulties, many ups and downs along the way. Starting a law business is a serious and responsible step. We hope this checklist will help you on this difficult but exciting path.