Virtual office New York lawyer Vivian Sobers explores how the initial cost of starting a law firm is an investment in yourself.
I hope you all had a great Thanksgiving. As I write this, I envision many of you will be recovering from a turkey hangover or trying to get a great deal on 55” inch television – such is human nature on Black Friday.
For me, Black Friday is truly a Black Friday this year. I am experiencing positive cash flow. Therefore, this will be the best Black Friday of my life to date. The fact that I will have a turkey hangover rather than a bruised body and ego from an overzealous shopper making their way to the flat screen aisle makes it even better.
Last year, on the other hand, was more like Red Friday.
As many of you know, I started my law firm, Sobers Law PLLC, last October. Opening a law firm is expensive, but not as expensive as you would imagine. I didn’t even have any money saved up. If I could do it, so can all of you.
Here is a financial road map of what I needed to start my law firm.
1. I needed an office.
The first thing I needed to do was to figure out what I would do for a law firm address. Let me be frank, your address matters. It is part of your firm’s identity.
I knew I couldn’t afford “rent” in the traditional sense, so I started looking at virtual offices. If a traditional law office rental is not in your budget, I highly recommend a virtual office when you start your practice. For us cheap people, it is the best deal. You get all the trappings of an office at a MUCH cheaper price.
I found Law Firm Suites online, booked a tour, and signed a contract. Honestly, what is the worst that could happen for $99.00 dollars a month. It costs more than that for a dinner out.
2. I needed malpractice insurance.
Malpractice insurance is a necessary evil. Although Utah may be the only state that requires it, practicing without malpractice insurance is like playing Russian roulette.
Lawyers are a different animal. If we make a simple mistake, we could lose our homes. It is humbling and scary. For me, much of my original case load was real estate closings. In order to perform these, the bank required that I have malpractice insurance and a bond.
Malpractice insurance is not crazy expensive (unless you do IP work or securities). I got my insurance through the New York City Bar Association. It was around $1200.00 a year, which I was able to pay in $100.00 monthly increments.
The bond, however, was a bigger hit. The $1300.00 fee had to be paid in full. Handing over $1300.00 unexpectedly is painful. It is more painful when you have already mentally spent that money elsewhere.
My dreams of a new sofa had to be put on hold.
3. I needed a business entity.
This was the most expensive part of the process. I still do not quite understand why I had to spend close to $2,000.00 on filing my corporate papers. Like most rational people, I literally thought you just filled out the forms and paid your money to state.
I chose a PLLC. It seemed the most formal and it was what all the law firms I worked for prior to starting my firm used.
Beware of the PLLC. They don’t tell you in law school that New York State has ridiculous publishing requirements for certain business entities. The rules are seriously arcane and seriously expensive. I could have just elected to use a P.C. and saved $1,500.
4. I needed “stuff”.
Remember when you moved into your first apartment after living with your parents all your life?
Remember when you opened the kitchen drawer and were shocked that utensils did not magically appear?
Remember when you were shocked at the cost of things you previously took for granted? You know? Like cutlery, plates, and cleaning supplies?
Opening a law firm is the same thing. I had to get “stuff” for my new law firm. A printer, pens, paper, staplers, stickies, paper clips, filing racks, filing cabinets with locks, toner, label makers… Stuff.
Stuff costs money. Real money. Seriously, I spent close to $1000 at Staples, just on stuff. You need this stuff to practice effectively.
5. I needed to network.
Believe it or not,networking costs money as well. When you first start your law firm, you should be out there networking 80% of the time. You need to make connections that lead to future business.
I found the easiest way to network was to join the New York City Bar Association and the New York County Lawyers’ Association. They have events all the time which are free or tremendously discounted for members. Annual membership for both of these organizations runs around $500.00. I have made valuable connections there that have referred me cases.
Joining these organizations also mitigates the need to pay for a legal research service. They provide Westlaw and LexisNexis free to members. This is the best money a solo attorney can spend.
In total, starting my practice cost me around $7000.00
Let me tell you, there is no better feeling than opening the first check that gets you “in the black”. It is a moment you will never forget.
Starting my own law firm is the best decision I ever made. I viewed the money I spent getting it up and running as an investment in myself. You should too. If I can do it, so can you. Hopefully, your Friday is as black as mine.
My name is Vivian Sobers. I am young, hungry and in the black. I have weathered one year of challenges in private practice. Despite the challenges that lie ahead, I am committed to replicating my success for many years to come.
Vivian Sobers is a commercial litigator pursuing a solo law practice right out of law school. She is a client in Law Firm Suites’ Virtual Office Program. Vivian’s weekly blog series “Young, Hungry and Committed” documents the trials and tribulations of a young attorney navigating her way through the challenging world of self-employed legal practice.