PRACTICE MANAGEMENT
Wide Open Spaces: AdviCe for Starting Up a Solo Practice

By Lori J. Kannenberg, James A. Calloway, Stephen J. Harhai, Cory J. Furman, and Reba J. Nance

Are you considering taking the plunge and starting up your own solo practice? Before you do, read the advice below from five experts in the field.

Practice management software will ensure that nothing ever falls through the cracks.

Look to your circle of support in your decision making. Lori J. Kannenberg advises that when planning to go solo, you need the support of family and friends to help determine whether you have the traits necessary to be successful as a sole practitioner. Those traits include an independent self-confidence, a burning need for personal involvement with clients, ingenuity, a desire to make a difference in the lives of others, an entrepreneurial spirit, and flexibility.

After preparing a business plan and budget, which includes financial forecasting to the best of your ability, talk to your banker about establishing a line of credit to help deal with cash flow fluctuations. Your accountant can help you determine the type of business entity that is most appropriate. Accountants can also help with establishing a general ledger chart of accounts and can provide guidance in designing financial reports, such as income statements and balance sheets. You will likely need an accountant to help with taxes and possibly audits.

You’ll need to have adequate insurance coverage, so talk to a qualified agent about your options. You will need professional liability, business/property, and liability coverage. You may also need workers’ compensation coverage.

Look to your bar association or ethics advisor, too. Determining ethical obligations to clients during a transition to another firm is crucial to avoid potential complaints or problems.

Make your target client base drive your plan. James A. Calloway advises that the threshold decision is to determine the type of client services that your new law firm will provide. This will inform many of the other decisions relating to practice setting, technology, and office equipment. Among the questions to consider: Will you continue to represent the same sort of clients? Will any of the clients for whom you currently provide services follow you to the new practice? Do you dislike the type of work you currently are doing and seek new challenges?

Initially, focus on the types of matters you wish to handle and the types of clients you wish to represent, then determine your marketing strategy to build a practice representing these clients. The type of clients and style of practice will affect everything from staffing requirements to the technology used to your location. A bankruptcy or other consumer-oriented practice may benefit from a suburban location. A practice requiring daily court appearances needs to be located within walking distance of the courthouse.

You need to keep all of that in mind and view your marketing in a broader sense than just putting advertisements in the Yellow Pages or local newspapers. Marketing is about building relationships, both with potential clients and potential referrers of business. Paid advertising will be a significant component of certain types of practices, such as family law and criminal defense, but will be virtually useless for representing businesses and corporations.

In terms of technology, there are two critical aspects. One is practice management software. A new lawyer establishing a practice cannot function effectively without it. Second, the purchase of a laptop computer rather than a stationary desktop is critical for today’s beginning lawyer. One cannot overstate the importance of having all of your client informational forms, calendar, and other data with you at all times. This allows you to make use of what would otherwise be dead hours and to easily work from home when necessary.

Use technology to push a competitive advantage. Stephen J. Harhai advises that, in going solo, you will have the opportunity to start fresh in designing the technology you will use to support your practice. All important client and administrative documents should be electronic. This will create great savings in staff expense for filing, space to hold all the paper, and more efficient use of time.

If your client documents and research and production tools are all electronic, you and your staff can work from anywhere. Setting up remote access will give you greater flexibility and more options in staffing because you can use people who want to work from home or even other cities. Consider using laptops for most or all of the staff so that they can take their “desks” anywhere they need to be. Throw in some small and light printers and scanners and you can set up a fully functioning office anywhere with an electrical outlet and Internet access.

There are virtual office environments springing up across the country in which you can have a phone number, mailing address, and meeting space when you need it, but no permanent staff or office space. If you need or want to minimize the risk and expense of starting a new practice, this might be a great way to go.

Find the proper balance to stay your course. Cory J. Furman advises that one of the primary things to watch when starting a law practice is the proper allocation of your time to the various tasks that must be completed. You can, to a limited degree, expand the amount of time available to accomplish professional tasks by staffing and delegation. It is good to be slightly overcapacity and overstaffed rather than constantly understaffed.

Consider purchasing a legal-specific billing program as well as case management software early in your practice. In terms of billing, if you have the proper software and wish to keep your costs to a minimal, you may not need any accounting staff until you become quite busy. Most of the products available in small-practice versions are simple enough that you can do your own basic timekeeping and billing and maybe just have a bookkeeper come and do your accounting a couple times a month.

In determining the solutions or products you will buy, factor in the value of your time and pain in the design and implementation of any particular legal solution using custom or off-the-shelf products. You may be rewarded for spending a bit more money on products that are designed specifically for you, rather than trying to bootstrap something together.

Strive to create a mind like water. Reba J. Nance advises to get your firm infrastructure in place. Every lawyer should use practice management software. Research the applications, pick one, set it up properly, and get training. Practice management software will ensure that nothing ever falls through the cracks. Absolutely everything should be entered into this software—your contacts, deadlines, phone notes, to-do lists, and ideas.

Strive for a “mind like water.” Write absolutely everything down and review it all at least once a week to keep it fresh.

is a certified legal manager and the firm administrator of Lawton & Cates in Madison, Wisconsin. is director of the Oklahoma Bar Association’s Management Assistance Program; is principal of the Law Office of Stephen J. Harhai in Colorado. is a partner in Furman & Kallio in Regina, Saskatchewan. is director of Law Practice Management and Risk Management at the Colorado Bar Association.

Copyright 2007

for more Information About the Law practice management Section

This article is an abridged and edited version of one that appeared on page 38 of Law Practice, December 2006 (32:8). It was adapted with permission from an article that originally appeared in September 2006 in the author’s Creative@Work series on the Burson-Marsteller website, www.burson-marsteller.com/pages/insights/povs/creative. For more information or to obtain a copy of the periodical in which the full article appears, please call the ABA Service Center at 800/285-2221.

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