Can a law firm be considered a startup?

A small law firm can be a challenging entrepreneurial endeavor. There is constant competition for clients and it can take effort to get your name out. Is a law firm considered a startup as it’s getting off the ground? While a law firm might not fit the traditional image of a startup, a new legal business does have those same elements of a new business getting off the ground. 

What’s the History of Startups?

The world “startup” often pops up in everyday conversation, but a precise definition is hard to come by. Many people think of a startup as any new business, but it has its roots in the dot-com boom of the 1990s. 

A startup typically has a founder with a burgeoning idea for a product or service. They are in the proof of concept stage, where they are showing their idea is viable from a business standpoint, or just in the early phases of production and distribution. Part of the allure of startups from the perspectives of investors and employees is working on something new that hasn’t been tried before, like a rideshare service that competes with traditional taxis (Uber) or a food delivery app that lets customers order from a huge number of restaurants (DoorDash). 

In the technology boom of the 1990s, startups were often notorious for bringing in large amounts of investor money before there was any profit on the books. These investors were looking for a huge payoff once the business could grow and scale exponentially. Today’s startups also tend to rely on outside funding from venture capital, friends, family, and other investors while they undertake research and development of their product idea. 

A startup, when it reaches a certain stage of success, might decide to hold an initial public offering (IPO) and make its stock available for trading on markets like the New York Stock Exchange (NYSE) or NASDAQ. 

Startups have a high rate of failure, which means many of them close up shop within the first few years. There’s no hard and fast rule about when a startup stops being a startup, but once they have survived these first few years, they might look less and less like a new venture and more like a traditional company. 

Can a Law Firm Be a Startup?

So, all of that said, can a law firm be a startup? There’s no reason why a new legal concept cannot be a startup. Perhaps a founding lawyer, or group of legal professionals, have a new and innovative idea in the legal space they want to get off the ground. In particular if that idea has the potential to scale and grow quickly, it could be a startup.

Most business observers would not consider a solo law practice a startup, even if those lawyers are without a doubt entrepreneurs. In order to find success with a small practice, you often have to start with the business basics first: developing a business plan, settling on a legal structure, securing office space, and marketing the firm. 

In many ways, this can feel like you’re taking a risk similar to that of a startup founder: at the end of the day, you have to serve enough clients to make the economics of your firm work. 

Tips to Build Your Law Practice

So, how can you get your small firm off on the right foot? You know how to represent your clients in a negotiation or courtroom, but it might be harder to determine the best ways to build your legal business. Here are a few things to consider:

• Law firm branding. A simple logo makes your first easy to distinguish among a sea of legal professionals. It also makes it easy for clients to identify you and your firm when they visit your various online properties. Your social media, website, and business pages should all have the same brand.
• Social media pages. Speaking of online properties, having social media pages is essential. Even if you don’t see yourself posting much to social media, the presence of your firm on these sites increases your internet presence. In short, it makes it easier for potential clients to find you. 
• Network online and offline. Getting out into the legal community is essential, especially if you are a solo practitioner. This is one way you can get contacts for referral business and cross-marketing opportunities with other firms.

Above all, don’t forget to have periodic check-ins on the health of your business. It’s easy to get caught up in giving clients the best representation possible and forgetting to monitor the firm’s cash flow. 

Get Help from Martindale-Avvo

The best news for any law firm getting off the ground is that you don’t have to do it alone. Martindale-Avvo has the resources you need to get started, including advertising, SEO, and pay-per-lead program. Contact us today to see what we can do for you.