General Practice, Solo & Small Firm DivisionMagazine
Creating Camelot: Practical Magic for Starting Your New Firm
Where Do You Begin?
By Merrilyn Astin Tarlton
You’ve had it with your firm. You’re ready to toss it all and go somewhere else. Should you start your own firm? Maybe you’ll go it alone. Regardless, the task of starting your own business can be pretty daunting. Where do you begin?
Here’s a list of things to think about. It is certainly not exhaustive, but covering these basics will free you to deal with the surprises from a position of power.
What about ethics and the Code of Professional Conduct? What does your state code say about leaving a firm and starting a new one? Read it thoroughly and conform!
Who are your clients? Which of your clients will go with you? Should some decisions about your new firm’s capabilities be made with specific clients in mind? How will you determine with your old firm which clients are whose? How will your clients be told about your departure? What reasons for the separation will be given? Should fee breaks be offered for clients who stick with you? How can you get existing clients to invest in the success of your new firm by referring new business? What needs to be done to make certain no steps are missed in ongoing work?
Are you prepared to strike the deal? Do the players agree about the purpose and future of this new firm? Are you compatible? Have you been frank about your individual expectations, long-term career plans and what you can really bring to the table at the new firm? Do you know how firm management decisions will be made in the future? What about your partnership agreement? Does it clearly support the norms you have in mind for the new venture? How about the compensation system? Have you talked it through and created something that works now and will work next year? Have you applied what you learned from that anachronism of a system used in your former firm? Are you smart enough to get it nailed down now, even when revenues look thin, so you don’t have to fight about it when the money starts pouring in?
And speaking of money, where will the start-up funds come from? Contributions from each party? A business loan? How will they be paid back–and when? Have you developed a good financial plan that anticipates several possible scenarios? What if most clients won’t come with you?
Will you hire staff? It’s either just you or you and a bunch of soon-to-be firm principals. Will you bring associates with you? Must you start hiring now to get the nonpartner support you’ll need? And how about secretarial and administrative staff. If you’ll be a solo, will it work best to do your own word processing? Is a 10-lawyer firm large enough to require a full-time legal administrator, or can you get by with a contract bookkeeper and a senior secretary/office manager? What’s most important to you when hiring staff? Will the focus of your practice require other technical staff? Paralegals? Computer graphics specialist? Medical researcher? What staffing procedures will you follow? Who makes these decisions?
What about office space? Where will your new office be? How much space do you need? Where do your clients need you to be? Can you keep the cost down by subleasing, taking over an existing lease, moving out of the high-rent district or officing at home for a while? Do you have a working relationship with other professionals that would benefit from proximity? Can you sublease from a big client in exchange for proximity? Can you make a space decision untouched by status concerns, or are status concerns legitimate in your area of practice?
What kind of furniture do you need, and how will you acquire it? Buy? Rent? Lease? Borrow? Barter? Will you make do with "gently used" until the firm’s business grows? Or is it important to look like an affluent, established firm from the start? What will be important to your clients about the appearance and nature of your office space? Will you focus your furnishing budget on technology? What are your priorities?
What about equipment? Face it: You’re not in business until your computers are up and running. How many will you need? Will you buy up in technology or sneak by for a while? Will you need the help of a consultant to make quick and cost-effective hardware and software decisions? Internet access? Intranet? Extranet? Color printer? And how about your telephone system? Buy new? Used? Lease? Wireless?
Do you have information resources? You’re leaving a wonderful library behind. What must you purchase now? What can you invest in later? Can you negotiate access to a law library near your new space? Will you replace books with CD-ROM and DVD technology? Will you farm out research needs? What about the public library or the Internet?
How will you market your firm? What will you name this new firm? What is its niche–full service, maritime law, personal injury, technology businesses? How will you best use the excuse of starting a new firm to present yourself to the hearts and minds of your potential market? Where is information about you and your practice published–and how quickly and effectively can you change it? Martindale-Hubbell? The telephone directory? Web sites? The newsletter you publish? Your front door and the building lobby? Consider your firm’s letterhead. How will it represent this new enterprise to the world? Which referral sources must be immediately and clearly informed of the change? Where will your business come from in the short term and the long term?
Media relations? How will you use the media to communicate the message of your start-up before the grapevine spins it for you? Press releases? Meetings with critical reporters? Is it time to hire a public relations professional?
How will your departure be announced within the old firm? Who will announce it, you or the firm? Will you go away angry or friendly? Which relationships will you need to and want to protect and continue? Are there other lawyers you’d like to take with you? What is the professional and humane way to leave?
Merrilyn Astin Tarlton is a management consultant to law firms and creative editor of Law Practice Management.
- This article is an abridged and edited version of one that originally appeared on page 24 in Law Practice Management, January/February 1999 issue (25:1).