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Starting a New Law Firm

By August 31, 2018October 8th, 2023law practice, Starting a New Firm

Starting a new law firm is a significant move that requires careful planning and consideration. This article addresses the following important aspects of creating your own firm:

  1. Main Considerations when starting a new firm
  2. Common Questions about starting a new firm
  3. Starting a Solo Law Firm
  4. Getting Clients (Marketing)
  5. Typical Expenses to Consider
  6. Staffing Considerations
  7. Outsourcing Options
  8. Technology Recommendations
  9. Advice from Other Lawyers
  10. Strategic Assessment (SWOT analysis)

Main Considerations for Starting a New Law Firm

Here are some primary factors to consider when getting started.

Determine Your Area of Specialization: Choose the field of law you want to specialize in based on your expertise, potential clients, market demand, and personal interests.

Develop a Comprehensive Business Plan: Create a detailed plan that outlines your firm’s purpose, target market, competitors, financial projections, marketing strategies, and operational procedures. Define your mission, vision, and values.

Choose an Optimal Location: Consider the proximity to your target clients, access to courts, local competition, and office space costs when selecting the location of your law firm.

Secure Adequate Funding: Understand the financial requirements of starting a law firm and explore options such as personal savings, loans, or investors to cover upfront costs like rent, technology, marketing, and staff salaries.

Determine the Legal Structure: Decide whether your firm will be a sole proprietorship, partnership, LLP, or corporation, considering the legal and tax implications of each.

Ensure Compliance and Licensing: Ensure you and your partners or employees have the necessary licenses to practice law and adhere to relevant local, state, and federal laws and regulations.

Consider Staffing Needs: Depending on your plans, hire staff such as paralegals, administrative support, or other attorneys to support your firm.

Develop a Strong Marketing Strategy: Attract and retain clients by implementing a comprehensive marketing strategy that includes an online presence, networking, and possibly advertising.

Invest in the Right Technology: Determine the necessary technology for your firm, including case management software, legal research tools, billing and time tracking software, and basic office software and hardware.

Prioritize Risk Management: Protect your firm with appropriate insurance coverage, such as malpractice insurance. Ensure the security of client data and fulfill ethical obligations.

Common Questions

Picking a Name for Your New Firm

When you’re starting a new law firm, your firm’s name sets the tone. It’s the first impression clients will have. Think about the message you want to send. Do you want a traditional vibe or something more modern? Your name should be easy to remember and unique. It’s worth taking your time on this.

What Legal Entity to Form

The structure of your firm matters. It impacts taxes, liability, and daily operations. LLCs offer liability protection without corporate tax rates. On the other hand, S-Corps can provide tax benefits for owners. Consult a financial advisor to decide what’s best for your situation.

How to Announce Your New Firm

You’ve put in the work, and now it’s time to let the world know. Consider using social media, press releases, and local news outlets. Hosting an opening event can also make a big impact. Make it memorable and reflective of your firm’s values.

When to Announce

There’s no “one size fits all” answer here. But it’s wise to announce your firm when you’re fully prepared. Ensure you have all your services, team, and office. This enables you to present your best face to potential clients.

Telling Your Old Firm That You Are Leaving

It’s a tough conversation, but being honest and upfront is crucial. Schedule a meeting with your seniors. Express gratitude for your time there. Assure them this decision is about your personal growth, not any issues with the firm.

How to Keep the Peace When Leaving

Avoid bad blood. Always honor any agreements or contracts you had. This might include client solicitation rules. Transparency is key. Let your current firm know about your plans. This builds trust and avoids potential legal issues down the line.

Dealing with Trust Accounting

Trust accounts are important, obviously. They’re where client funds are kept. You must abide by strict ethics rules. So it helps to get the right software and perhaps even hire a dedicated person. Mistakes will be costly, both in money and reputation.

Choosing Technology

Today’s law firms can’t shy away from tech. It streamlines tasks and improves client service. From case management to virtual meetings, tech is a must. Do your research. Pick tools that fit your firm’s size and needs.

Managing Your Business

Starting a new law firm is just the first step. Running it efficiently is an ongoing challenge. Create clear processes. Keep your team trained. And always, always listen to client feedback. They’re the heart of your business.

Starting a Solo Law Firm

Going solo feels like a brave move, so it’s common to have worries. Here are two that many solo lawyers think about:

  1. Fear of Going It Alone: Practicing law on your own can feel isolating. Not having a team to discuss tricky cases with can be daunting. But remember, there’s a vast network out there. Many solo lawyers join local legal groups or online forums. This gives them a space to share ideas and get feedback.
  2. Worries About Prestige: Making a name on your own can feel like an uphill battle. There’s a belief that bigger firms mean more prestige. But success isn’t just about size. It’s about the impact you make on clients’ lives. As a solo lawyer, you can offer a personal touch big firms can’t match.

Going solo isn’t easy, but it’s rewarding. Believe in yourself and the unique value you bring, and don’t worry about what lawyers in big firms are doing or thinking.

Getting Clients to Start a New Law Firm

Knowing you can pull in clients reliably and steadily is vital. Here are some key considerations:

  1. Cash Flow: Before the clients start pouring in, there’s a gap. This gap can affect monthly bills, payroll, and more. It’s essential to have a buffer. Saving up before you launch or securing a line of credit can help bridge this period.
  2. A Steady Stream: Getting that first client is great. But what about the second, third, or tenth? Building a robust referral network is key. Happy clients, fellow lawyers, and community ties can all lead to referrals. Also, don’t shy away from online marketing. A strong online presence can drive a lot of business your way.
  3. Finding Your “Bread & Butter” Clients: Every firm has them. Those loyal clients who truly value your services and happily recommend you to others. To find yours, think about what sets your firm apart. Is it your niche expertise? Your personal touch? Once you figure it out, tailor your marketing to attract these ideal clients.
  4. A Firm Website: A website isn’t just recommended—it’s essential. It’s where potential clients will first get to know you. Consider hiring a professional to ensure your site is user-friendly and represents your firm well.
  5. Choosing the Right Domain Name: This is crucial for two reasons. First, it’ll be the web address where clients find you. Second, it sets the tone for your firm’s email addresses (e.g., Pick a name that’s easy to remember and represents your firm.
  6. Business Cards: A tangible business card still stands out in the digital world. It’s a piece of your firm you leave behind after meetings. Use professional services to design and print them. Ensure they match your firm’s style and ethos.
  7. Digital Marketing: Beyond a website, consider other digital platforms. Social media, online ads, and email marketing can all boost your firm’s visibility. They help you reach clients where they spend their time: online.

Starting your own law firm is a bold move. Marketing it right ensures you don’t just start but thrive. With the right strategies and a bit of patience, you’ll build a client base that supports and grows your firm.

Expenses in Starting A New Law Firm

Budgeting for general expenses is necessary for any new business. Let’s break down some of the ones you’ll need to consider in starting your new law firm:

  1. Legal Malpractice Insurance: It’s a must-have. To find the best deals, shop around. Different providers offer various rates. It’s also wise to ask fellow lawyers for their recommendations.
  2. Choosing Office Space: You’ve got options here. A traditional office gives a professional setting for client meetings. A home office can save on costs but might lack a formal vibe. Co-working spaces offer flexibility, often with perks like networking events. Evaluate your needs, client base, and budget to make an informed choice.
  3. Furnishing Your Office: You’ll need the basics at home or in a dedicated space. This includes a sturdy desk, a comfortable chair, good lighting, and file cabinets for organization. Don’t skimp on quality. These are long-term investments that affect your daily work life.
  4. Accounting Costs & Fees: Managing your finances is crucial. Hiring a professional accountant can save you headaches, especially during tax season. They’ll ensure you’re compliant and help you make smart financial decisions.
  5. Bookkeeping Costs: Regularly tracking your expenses and income is essential. Whether you hire a bookkeeper or use software, there will be associated costs. It’s an investment that pays off by keeping your finances in order.
  6. Time and Billing Software: If you bill by the hour, you’ll need this. Keeping time effectively is about ease and accuracy. Time tracking software saves you time and presents a professional image to clients.
  7. Legal Research Service: Doing your due diligence is a lawyer’s mantra. There are both free and paid services. FastCase and Casemaker offer affordable options. On the higher end, there’s Westlaw and Lexis. Weigh the costs against the depth and breadth of research you’ll need.

Starting your law firm comes with its fair share of expenses. But remember, these are investments.

Staffing When Starting a New Law Firm

Having the right support is invaluable, so here’s what you should consider:

  1. Support Staff: As your firm grows, you might feel the need for administrative or paralegal help. But, there’s the question of budget. Be realistic about what you can afford. Sometimes, starting small and then expanding as revenue increases is the best approach.
  2. Solo Without Support: It’s not uncommon for new law firms to operate without support staff initially. If budget constraints hold you back, it’s essential to be organized and efficient in your work process.
  3. Mastering Delegation: If you do have staff, how good are you at delegating? It’s a skill that many struggle with. It’s essential to trust your team and hand off tasks that don’t need your direct attention. This lets you focus on high-priority cases and firm growth.
  4. Addressing Secretarial Needs: In today’s digital age, many secretarial tasks can be handled through software or outsourcing. Virtual assistants, for instance, can manage scheduling, call handling, and more. Evaluate what tasks you can automate or outsource to save on hiring full-time staff.
  5. Paralegal Support: Paralegals are a vital asset, but hiring one full-time might be out of budget. Consider outsourcing some of this work. Many companies offer paralegal services on-demand, giving you flexibility and expertise without the commitment of a full-time salary.
  6. Receptionist Needs: First impressions matter. A receptionist ensures every call is professionally handled. If hiring one isn’t feasible, look into virtual receptionist services. They offer the professionalism of a dedicated receptionist without the overhead costs. And, given their effectiveness, it’s a solution you should seriously consider.

Building your support team is about making smart, budget-friendly choices.

Outsourcing Options

In the gig economy era, even law firms can tap into the vast resource pool available online. Platforms like Fiverr, Upwork, and FancyHands offer a plethora of talented professionals ready to tackle a variety of tasks. Here’s how you can benefit:

  1. Diverse Skill Sets at Your Fingertips: Need a graphic for a presentation? Or a quick website fix? These platforms house experts in design and IT fields, ready to jump in on short notice.
  2. Budget-Friendly Solutions: Hiring full-time staff or dedicated agencies can strain your budget. With gig platforms, you pay per project or task. This means no long-term financial commitments and the flexibility to adjust as your needs change.
  3. Short-Term Assignments: Sometimes, you might have a one-off task. Instead of hiring someone full-time or overburdening your team, you can outsource it. This is particularly useful for projects outside your team’s expertise.
  4. Quick Turnaround: Many freelancers on these platforms are used to tight deadlines. This is a viable option if you’re in a pinch and need something done fast.
  5. Scaling Up or Down: As your firm grows, your needs will fluctuate. These platforms allow you to scale your external support up or down as needed. This flexibility ensures you’re always adequately supported without overspending.
  6. Administrative Assistance: Platforms like FancyHands specialize in administrative tasks. Whether it’s data entry, scheduling, or basic research, they have assistants ready to help, freeing up your time for more critical tasks.

Incorporating these outsourcing platforms into your operations can be a game-changer.

Technology for Starting a New Law Firm

Let’s dive into some tech essentials for your new firm:

  1. Equipment:
    • Computer: A reliable, fast computer is a must. Depending on your preference, this could be a desktop, laptop, or a combination of both.
    • Printer: For hard copies and official documents. Consider a multi-function printer that can also scan and copy.
    • Extra Monitor: A second screen can significantly boost productivity, especially when researching or drafting documents.
    • Scanner: Vital for digitizing documents and ensuring a paperless office.
  2. Software:
    • Microsoft Suite: Word for document drafting, Excel for financial tasks, and Outlook for emails.
    • Adobe Acrobat: Essential for working with PDFs, from editing to e-signatures.
  3. Phone Service:
    • Landline: Traditional but reliable.
    • VOIP: Internet-based phone service that often offers more features than traditional lines.
    • Soft-phone: Software that allows you to make calls via the computer, especially handy for remote work.
  4. Email: Your email address should exude professionalism. Something like ‘‘ not only looks clean but also boosts client confidence.
  5. Practice Management Software is crucial for case management, billing, and client communication. Platforms like Clio, MyCase, PracticePanther, and Filevine have become industry standards. Evaluate each to see which aligns best with your firm’s needs.
  6. Tech Consulting: As you grow, tech needs can become complex. Companies like LawTech Partners offer specialized guidance, ensuring your firm remains tech-savvy without unnecessary expenditure.

Incorporating the right technology is an investment in your firm’s future. For more insight, read this article.

Other Lawyers’ Advice

The Reddit Law Firm forum is one of the best places to get a broad sense of what other attorneys advise. (it has 48,000 members and has been around since 2012). Here are two discussion threads to start with:

Some of the advice you’ll see looks like this:

  • “My biggest suggestion is to go 100% paperless”
  • “Get your email (Outlook), file hosting (OneDrive), and cloud apps all together through Office 365.”
  • “Consider using free Google Voice if you’re on a tight budget”
  • “Billing and e-signing are important”

The challenge of reading too many online recommendations is that you don’t know enough about the person making the recommendations, or sometimes their needs differ vastly from yours. But, still, it’s worth doing a quick scan of the comments to get ideas.

Assessment of Opportunities (SWOT Analysis)

Taking the time to assess your needs and priorities in key areas of law practice is a wise investment. If you’re interested in doing a SWOT analysis for your new firm, check this out.


Starting a law firm is not just about practicing law; it’s about running a business. It requires strategic planning, financial management, and expert technology assessment. If you need help, get it as soon as you can because the payoff over the long haul will be tremendous.

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