If you want to get your new practice up and running, then the answers to these 5 questions are a good place to start.
Did you know that 20% of small businesses do not make it past their first year — and nearly 50% will close their doors before their five-year anniversary? Solo and small law firms fall under this same shocking statistic. Nonetheless, eager entrepreneurial lawyers regularly take the plunge in order to follow the American Dream of owning their own firm and being their own boss. If you are thinking about blazing your own path, despite the odds, you are not alone.
But how do you start a law firm that will stand the test of time and beat the odds? There are many things you can do to prepare yourself or tools you can buy, but having a set plan and established goals will help make sure your practice starts out on the right foot. Before you leap into opening your solo or small law firm aka your new business venture, consider these 5 questions:
1. Are you looking to create a solo practice or a scalable law firm?
Many lawyers that open their open practices are just looking to create a solo practice just for themselves, not to necessarily grow in to a large firm. That’s okay, but if that is not your long-term goal, you need to have a clear vision of how you will scale your practice before you begin. Otherwise, you risk finding yourself working hard and taking on more than you should, without either the funding or the people you need to succeed.
For example, we know of some lawyers that have made the decision that whenever legal work takes more than 50% of his time, then he hires another staff member so he can focus on marketing and growing his firm.
2. What funds do I absolutely need to start?
Maybe your dream is to open up an office in a big city like NYC or maybe have a smaller shop located in your town. If either of those sound appealing to you then, you’re going to need a lot of money up-front to open your office. Instead, what might be a better idea is to spend smartly in the beginning and keep your expenses low.
Keeping your expenses low doesn’t mean you have to sacrifice or put certain goals on hold. But what it does mean is that you need to know what is necessary for your practice right now, and what you can compromise on in the meantime. For example, a business address is absolutely necessary for your firm, but you don’t need the massive overhead expense that comes with leasing or buying your own commercial space. So a compromise might be using a virtual office, that way you can get the address and access to conference rooms/workspace that you need at a lower cost until the day comes that you can rent/buy your own office space.
3. Who are you going to compete with?
You can’t play the game if you don’t know the players. Do a simple Google test to see who else is out there doing what you’re doing. This will also give you insight into how much local SEO marketing you’re going to need to do in order to rank on the first page of Google.
Just because someone else is out there operating a small or solo law firm, doesn’t mean your out of luck or that you need to pack up and move to a new area. However, you need to see what the competition looks like in order to decide how you can offer something better/different to local audiences.
4. What’s your Why?
Friedrich Nietzsche said, “He who has a why can endure any how.” Knowing your why is the best way to figuring out how to achieve your goals.
Your why may be similar or even identical to your business core values, and just as your core values help you make the right decisions for your business, so can your why.
List down all the reasons why you want to start your own law firm. Go through them one by one. Which of these reasons will still be there in a year when even when you and your law firm are going through tough times? Look for the why that’s strong enough to endure hardships and compelling enough to survive a major drop in quality of life in other areas.
Your why might be attached to the very specific idea or belief. The cause or clients you are fighting for. The passion that burns inside you.
Your why might be the realization that you just can’t work for anyone else and running your own law firm is the only path forward for you. Either way, knowing your why is essential to your firm’s growth and success, especially in the beginning.
5. What resources do you already have?
Too often you’ll hear people talk about what they don’t have. But many would argue that your time would be better spent focusing on what you do have access to and how you plan to utilize it.
So, make a list of everything you have that can help you: potential referral sources, mentors, finances, skills and anything else. You’ll be surprised how resourceful you can be even when you feel limited.
Another question too many people ask themselves before they start a solo practice is, “Is this the right time?” Here’s a secret that will save you some time, there will never be a time that feels 100 percent right. And that’s okay too!
But if you want something badly enough, you make time for it no matter what. Starting a law firm isn’t about the stars aligning and your feeling 100 percent confident. Starting a business is about your passions and excitement outweighing your fears and doubts.
Starting a new law firm, whether it be on your own or with another lawyer, is exciting and energizing, but you need to be prepared for all the ups and downs that come with it. If you want to beat the odds, the answers to these 5 questions are a good place to start.