In this week’s edition of Things I Wish I New, New York lawyer Joleena Louis discusses the expenses that caught her solo practice by surprise.
Starting a solo practice can be inexpensive, for example leveraging free tools and a home office can help for if you keep your overhead low, but there are some expenses that many new solos may not consider.
These expenses can quickly inflate your monthly bill to an unreasonable amount. And before you know if, your once inexpensive solo law firm has become overwhelmingly expensive.
I went through this process myself when first launching my solo practice. So to help, here are a few expenses that I never considered when starting my practice. Take note and don’t make the same mistakes that I did.
1. Insurance
There are several types of insurance you should consider for your new firm, but professional liability and health insurance are the two you need at minimum. The rates for both will vary from person to person, but they can quickly add hundreds of dollars to your recurring expenses.
When I started my practice, I didn’t have both of these expenses, at the time I was covered under my husband’s health plan. But now that I am single, health insurance has become a pretty big monthly expense that has an effect on the rest of my budget.
2. Emergency Repairs
Nobody is immune to sudden technology issues.
In the four years since I started my practice, I’ve had two laptops and a printer crash. And of course, they happened at the most inopportune times. Along with learning the importance of backing up my data, I also learned the importance of having cash set aside for emergency repairs and replacements.
This way when you open your laptop only find to that blue screen of death, you can get a replacement quickly and easily.
3. Additional Help
A virtual assistant can be brought on to help your firm during busy or chaotic times, like the holidays, and you only pay for them as needed.
I waited a long time before hiring a virtual assistant and now I realize that it would have been more cost effective to hire one earlier. The expense of hiring an assistant has almost paid for itself. I now have more time to work on more productive and profitable tasks.
If I had to do it over again, I would have included it my budget a long time ago.
4. Subscription Software
Time is money and as your practice goes on you will be willing to pay for services that save you time or make your life easier. For most lawyers, this means signing up for various subscription-based service.
But all these subscription services add up. For example, I pay for Office 365, MailChimp, MyCase, Buffer, and more.
It’s easy to sign up for something that costs $10 here and there, but look at how much you are spending in total and you might be surprised at the amount you’re spending.
5. Networking Expenses
Like many other lawyers, many of my cases come through referrals. But when starting my practice I did not consider the cost of building my referral network as an expense. While there are several expenses associated with networking, not all of them are monetary.
Networking events cost me time as well. Taking referral sources out for coffee or lunch, and sending thank you cards are all expenses that need to be considered.
These are just a few of the expenses that you should consider. While you can’t know every expense in advance, keeping some of these in mind will help you and your firm to be better prepared for the future.
