Personal injury attorney, Kel Vrana, shares the top three factors he needed to consider before quitting his job to start his own solo law firm.
Leaving the security of an established firm to go out on my own was not a decision I made lightly. Starting a solo law firm can be risky, but what I found was that it is also highly rewarding.
I spent four years at a large personal injury law firm in one of the biggest markets in the Southwest. It didn’t take long to realize that there was significantly greater earning potential in starting my own practice than working for others.
Once I felt that I had learned enough to be self-employed, I started to explore partnership options. Ultimately, I decided that going solo was the best choice for me.
Now that I’ve taken the leap, many people have asked if I regret not doing it sooner. I do not feel everything would have come together the way it did if I wasn’t fully prepared before I resigned from my job, and I believe it is in your best interest to make sure you ask yourself the right questions before you take that big step.
Based on my experience, here are three key questions you’ll want to consider:
1. How will your departure from your current firm impact you?
How you resign from your firm can make or break you, especially in a personal injury practice.
While it’s important to try your hardest to leave the firm on good terms, you’ll also want to find out how the community you typically get clients from will feel about you leaving.
For example, if one of your referral sources would be less inclined to send you new cases after you leave the firm, you may find it challenging to get new work when you first go solo. This could be a problem if you were relying on referrals from that source when forecasting your initial budget.
Leaving on good terms with your firm could mean keeping the door open to referrals or co-counsel work.
A lot of this will be determined by how you resign from your job.Leaving on good terms with your firm could mean keeping the door open to referrals Click To Tweet
When I left my firm I asked that we send out letters jointly to each of my active clients. I also agreed that I would not begin to contact the clients until one week had passed.
Many of the doctors I worked with at the firm respected my efforts to be diplomatic about my departure. Now, those same doctors have sent me smaller cases that I couldn’t take on while working for the firm.
In the end, the clients saw that I was leaving on good terms, and I was able to secure more than twice as many clients as the last attorney to leave that firm.
2. How will you get clients after starting a solo law firm?
Finding new business can be stressful once you start a solo practice. You will need to implement a well-planned strategy for bringing in new clients, whether it includes networking with potential referral sources or advertising.
As a part of my advertising efforts, I sent each of my former clients a $5 Starbucks gift card that was co-branded with my new logo, firm name and phone number. This generated significant business for me.
If you go the advertising route, be leery of costs and pay attention to the timing of your campaign. For example, one of the things I learned was that advertising costs are higher during election season.
You may be able to market cheaply and effectively using Google Adwords. However, keep in mind that in a crowded legal market, attorneys with a niche practice area usually see better ROI from Google Adwords than generalists.
Focusing your practice area on something specific will increase the likelihood your firm will show up in search results. For example, “estate planning lawyer for single parents” or “child support lawyer for military dads” would rank higher than “trusts and estates attorney” or “family law attorney.”
3. Can you afford the jump?
At the end of the day, financial planning for a solo law firm was the biggest challenge, and there is no definitive answer as to how much it will cost to launch a firm.
You will need to carefully plan out your expenses, from rent to technology, and determine how many billable hours you will need to work. The key is to be realistic and leave room for the unexpected.
In my case, I started with enough funds to cover both my business and personal expenses for two years. About a month into launching my practice, rapid growth required me to hire a staff member, lease additional space, and increase my malpractice insurance.At the end of the day, financial planning for a solo law firm was the biggest challenge Click To Tweet
All of these expenses almost doubled my anticipated overhead. Fortunately, having more than a year’s worth of funds gave me the financial flexibility I needed in order to avoid turning away cases.
While I do recommend at least two years’ worth of reserves, there are many attorneys who start out with less. Ultimately, your referral sources, practice area and collection methods will make a huge impact on the budget you require.
Being a solo lawyer still has its challenges, and I have a long road ahead of me to maintain the growth of my practice. However, addressing these questions before I quit my job helped my law firm thrive from the very beginning, and I’m looking forward to continuing the journey.
About Kel Vrana
Kel Vrana is a personal injury attorney practicing in the greater Phoenix area. He is the owner of the Vrana Law Firm. He attended Washburn University School of Law in Topeka, Kansas and is licensed to practice in Arizona. He can be reached at Kel@VranaLawFirm.com. Feel free to check out his website.