Modern times are seeing an emergence of solo practitioners and boutique law firms in the United States – nearly 75% of all licensed attorneys. The technological landscape has made this easier than ever. It has decreasing start-up costs with virtual employees and offices. There is numerous software providing inexpensive business management tools. Most notably, the internet offers every entrepreneur a spot in the digital marketing space. While the actual creation of a law firm may not be difficult, growing the firm is the true challenge.
A search of ‘how to start a law firm’ will result in pages of feel-good success stories. Stories of seasoned professionals and recent law-school grads who abandoned the traditional route of a large law firm and went out on their own. Their thriving business is chalked up to networking, advertising, and pleasing clients – but there is so much more that goes into creating a successful business model for a budding practice. If you are considering starting a law firm, here are the basics of what you need to know.
Money Will Be Slow at First
The consensus for start-up law firms is that it may be months before getting the first client. It is challenging if one isn’t starting a law firm with a pocketful of loyal clients from a previous position. You are tasked with marketing your firm and acquiring new clients before seeing the first paycheck. As such, it’s usually recommended to save enough for four to six months of overhead expenses. Technology makes it extremely easy to minimize overhead costs, in fact, you can treat your start-up as a virtual law firm to save on setup costs.
Be Mindful of Your Branding
Names, letterheads, and slogans can land an entity in trouble if it is misleading or purposefully deceptive. Rules and restrictions vary by jurisdiction. Implying that the firm is larger than it actually is (falsely using “& Associates” in the name, referring to the firm as having “offices”), implying associations or using the names of deceased/retired lawyers, or mimicking large firm’s letterhead, are examples of instances that firms were punished for.
Social Media has Rules
While lawyers have just as much right to promote their businesses on social media as any other, there are limitations and some states more strict than others. For example, the Solicitation of Clients rule prohibits lawyers from having real-time contact with potential clients via social media. This is similar to the illegality of ‘ambulance chasing’. Other restrictions are due to concerns about client confidentiality and can affect a lawyer’s website and even their blog.
Invest in Malpractice Insurance
The American Bar Association estimates that between 5% and 6% of private attorneys are subject to malpractice charges every year. Malpractice insurance is not required in all states but it is highly recommended. Lawyers who face a disgruntled client can end up paying an exorbitant amount in fees, on top of staining their professional record. Certain areas of law are more prone to malpractice suits, and lawyers with many years of experience (that that take on more complex cases) also find themselves at a higher risk. Fortunately, this means that new lawyers can often get inexpensive malpractice insurance.
Create a Website
Starting a law firm website is the number one lead generation tool for any small practice. Don’t worry about the technical part (for now). What is most important make sure the site is visually appealing. Leads acquired in-person or from references can be directed to your website to reaffirm your legitimacy. Digital marketing specialists can later optimize your website to be found by search engines. The experts at Attorney Business Consulting can assist with web design and digital marketing specialized for lawyers and law firms.
The road to having a self-sustaining legal firm is long – but it doesn’t necessarily have to be difficult. Avoid the common rookie pitfalls of starting a law firm, and begin your path to success. If you need assistance creating a winning business model for your law firm, you can get a free consultation today at Attorney Business Consulting.