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Without question, running out of money is the number one reason that new practices fail. A state of financial panic always leads to a failure to spend time on the other critical practice-building tasks: excellent client service, administrative duties (especially billing) and marketing.
First, get advice from your state bar's practice management advisor. Next, prepare a detailed business plan and a realistic budget (see www.practicepro.ca/finances booklet). Keeping your financial house in order means arranging for a line of credit, and pinching pennies the first year or so. Share space or work from home, don't rush to hire staff—and stay out of Staples. Bill something every week to create cash flow, and spend time on management and marketing. And remember, for handling all the deadlines and tasks that come with running a practice, nothing is more powerful than practice management software.
Communications and relationship problems are responsible for 40 to 50 percent of the malpractice claims in most areas of the law. Excelling at client service means making lawyer-client communication the top priority. Keep clients informed on everything they need to know and understand, and always document the information they provide to you and the advice and work you give to them. You will never get sued by a happy client.