First Steps to Starting Your Legal Practice
So you’re an attorney who doesn’t want to work for just any law firm. You want to start your own legal practice. Maybe you’ve always dreamed of being your own boss. Maybe you’re tired of being pushed around by senior partners at your current firm, or you want a choice in the cases you take on. Starting your own legal practice can be exciting, but it’s also hard work.
To start your own legal practice, you need both legal skills and a head for business. After all, you’re not just practicing law and representing your clients. You’re also building a business. The good news is that those business skills can be learned, and you can receive help for some aspects of business you may never have dealt with in the past, like marketing.
It’s important to make sure you’re fully prepared before opening your own law firm. Here are the first steps you need to take when starting your own law firm.
Figure Out the Finances & Form a Business Plan
On the bright side, when you open your own law firm, you’ll be a senior partner if not the sole practitioner, which means you can start to bill more than you would have as an associate or junior partner. On the other hand, you’ll also be much more responsible for thinking about how much the firm will need to live.
Take stock of what you need to maintain your standard of living and what you’ll need to keep your firm running. That may include:
- Rent for office space
- Office supplies and equipment
- Legal software
- Salary for employees/pay rate for contract employees
- Marketing costs
Once you know what your expenses are, you can figure out how much you will need to earn to make a profit. Figure out how much you will charge for billable hours and how many billable hours you’ll need to work to meet that goal.
This is when you’ll need to set goals for the number of cases you’ll need to have each year to meet your revenue goals. You will also need to figure out how you plan to bring on new clients. Do you have any current clients who will follow you? Will you bring on partners and associates to help spread the workload? Keep in mind that this will also spread the revenue a bit thinner and increase the amount of work coming in.
Choose Your Entity Formation
So you’ve figured out the finances and you still want to go forward with starting your own law firm. Now you’ll need to meet with an accountant and a business lawyer who can help you figure out the right business entity for you. The business entity you choose will impact your taxes and liability for business debts.
Many law firms choose to form a limited liability corporation (LLC) or a professional limited liability corporation (PLLC). PLLCs are not recognized in every state and may not be an option for you. A PLLC is a specific kind of LLC for licensed professionals such as lawyers or health care professionals. Regardless of whether you choose a PLLC or an LLC, the benefit is the same: it makes the business its own entity so that you can’t be held personally liable for the actions or debts of the business. Your personal assets remain protected.
A professional corporation (PC) is also a popular option for law firms. This functions like a traditional corporation, except that it requires a licensed professional to be at the head of that corporation. Like an LLC, it offers protection of your personal assets by separating you from your business. Since all shareholders of the corporation must be licensed attorneys, ownership is easy to transfer down the line. Some states require a PC formation, so it’s a good idea to check with the Secretary of State in your location.
A final common entity option for law firms is a limited liability partnership (LLP). An LLP requires at least two partners and, like PCs, some states require attorneys starting their own law firm to form an LLP. An LLP offers each partner in the firm some protection from being held liable for the actions of the other partners and is a good choice if you plan to grow your law firm.
Name Your Firm
Most law firms simply use the name or names of the founding partners as their business name. For instance, if your last name is Michaelson, you might have a firm named Michaelson Law, PC. It might be Michaelson & Hawthorne, LLP if you have a partner. If you specialize in a particular practice area, you might also work that into your name (i.e. Michaelson Injury Law, PC).
However, there’s no strict regulation that your legal practice must be named after yourself. You can certainly get a little more creative with your firm name — within legal frameworks. For instance, you cannot name your firm after a jurisdiction unless you are a public legal aid agency. You cannot use the name of a renowned attorney who does not actively practice at your firm. You cannot name your law firm things like The Best Law Firm or anything that would be seen as a comparison. And, of course, derogatory names cannot be used.
Take a look at law firms in your area and make sure the name you have in mind isn’t too similar to one of theirs. If it is, find a way to make your name stand out a little more. Then officially register your name and business.
Build a Presence Online and Start Crafting Your Brand
These days, a law firm has to have an online presence if you hope to bring in business. Your competitors are all online, and most of your prospective clients will be searching for attorneys online.
Now is the time to register an online domain, even if it will take some time for you to set up the website. You should also set up a Google My Business profile, listing your contact information and a description of your business. You may also want to set up a Facebook page, Twitter account, or even an Instagram account, depending on the types of clients you’re likely to bring in.
You also want to begin thinking about your brand. How do you want clients to feel about your legal services? What do you feel sets you apart? You can build this brand into your website, as well as your social media marketing.
Design a Logo
Your logo will go on your letterhead, on signage for your firm and on any promotional items, as well as on any online locations where your business can be found. It should be unique, eye-catching, and representative of your brand. If you have design skills, you may create this logo yourself. Otherwise, you might hire an artist to design one for you. It’s a good idea to trademark your logo so that no one else can attempt to use it.
Set Up Office Space and Make a Plan For Personnel
Are you going to practice out of your home, or will you have a separate office space? If you plan to have a law firm with multiple partners, you’ll need a physical office space where you can all work and welcome clients, as well as hold meetings with clients and other counsel.
As you set up your office space, you should also make a plan for personnel. Do you plan to practice solo or are you bringing on other attorneys? What about administrative positions? Will you need an assistant, a receptionist, an office manager, or an accountant? Many law firms start small, and that’s okay. You may be able to add more staff as your business grows.
Open Your Doors and Bring In Clients
Ideally, you’ll need to start marketing before you open your physical office for business. You’re going to want to have a few clients already on day one. But the marketing doesn’t stop once you open. You’ll need to keep the lights on now, which means continuing to bring in clients.
Law firm marketing can be overwhelming for new legal practices, as you might not have years of loyal clients to rely on. Plus, most lawyers are not themselves marketers. It can help to outsource your marketing to professionals who can provide you with marketing materials and services that will bring clients to you. This is far less stressful and the initial investment will pay off with the new cases you’ll be able to take on.
How Martindale-Avvo Can Help You Start Your Legal Practice
Martindale-Avvo can help with a vast array of marketing areas, whether it’s our profile services, boosting your SEO, advertising, or our highly targeted pay-per-lead program. We use our marketing expertise to give you the tools you need and connect you with potential clients. When you need to grow your legal practice, we’ll help you hit your business goals.
Contact Martindale-Avvo today to learn more about what we can do for you or to set up an evaluation to discuss your marketing needs.