The following tips will help you establish a strong foundation for opening your solo/small-firm practice.
Use free professional law office management assistance and resources. The initial decisions to be made and tasks necessary to be completed at the outset of your journey to open a solo/small-firm practice may seem daunting. What type of business entity will you choose? How will you maintain your client files? Do you need a law firm trust account? How will you handle office finances? These are only a few examples of the questions that you will need to address.
Most attorneys have no training or experience in operating a business. Further, working as an associate provides limited exposure to the business side of law. Only more recently have some law schools included an optional component to prepare students for the business and ethical issues associated with owning a law firm.
The good news is that you don’t have to reinvent the wheel: free professional assistance is readily available. An increasing number of state and local bar associations offer professional law office management assistance, including resources you need to set up and operate your law practice. In addition, the American Bar Association (ABA) has valuable resources available online in its Solo and Small Firm Resource Center.
Your state bar has a vested interest in assisting you to maintain a productive and ethical practice. Doing so helps to avoid attorney grievances and malpractice claims, through formalizing all aspects of your firm’s operation. For example, the Florida Bar Practice Resource Institute provides a new law office checklist and samples of essential documents, such as the business plan, trust account procedures, and firm formation documents (shareholder/partnership agreement, bylaws, buy-sell agreement, etc.). Administrative and client forms, such as various retainer and fee agreements, are also available. Furthermore, webinars and continuing legal education (CLE) courses addressing various aspects of law firm management are provided.
Utilizing professional law office management assistance and resources will help ensure that your firm is built on a solid foundation.
Seek sound advice from multiple mentors. Essential to my decision to open a law practice was sound advice that I received from multiple mentors. I aspired to emulate these individuals in my practice. It is important to develop relationships with mentors with whom you can have completely honest and candid conversations. Hearing examples of things that did not work for a mentor is equally as important as—if not more important than—hearing success stories.
Developing a trusted mentor-mentee relationship takes time. I recommend developing relationships with more seasoned attorneys through active participation in practice area and affinity groups in your local bar. This will allow you to build relationships over time based on common interests. I have found that active and accomplished members of the bar generally want to assist younger attorneys.
Seeking advice from multiple mentors will greatly assist you in building a successful practice.
Obtain the services of an accountant, business banker, and financial adviser. One of the best pieces of advice that I received prior to going into practice for myself was the necessity of interviewing and retaining (1) an accountant, (2) a business banker, and (3) a financial adviser. The importance of retaining the services of each of these professionals cannot be overstated, and I recommend doing so prior to filing the paperwork to incorporate your business. Mentors are a good source of recommendations for these professionals.
An accountant will provide you with important advice regarding your business plan, operational budget, accounting software, and taxes, as well as the choice of entity for your law firm. Having a complete understanding of the financial aspects of your practice will allow you to better plan and prepare for the future.
Likewise, it is important to engage the services of a business banker who has experience working with law firms. You will likely need to open a law firm trust account that has specific requirements. Further, depending on your practice area and business model, financing or a line of credit may be necessary to effectively operate your firm.
I believe that the role of a financial adviser becomes especially important when you decide to open your own practice. You should have in place the necessary financial vehicles to provide for your retirement, as well as unfortunate circumstances such as disability or death. Your current employer may be making contributions to your retirement and providing insurance benefits, which you will no longer have after the transition to your own practice.
Develop and periodically revise your business development plan. Business is the lifeblood of a law firm. Without a consistent influx of revenue-generating matters, the law firm will not survive. Studies have shown that the majority of business referrals originate from people with whom we have close relationships, such as friends and family members.
It is important to develop and periodically revise your business development plan to maximize possible sources of referrals. Law office management assistance resources (discussed above in the first tip) often contain sample business development plans.
Prioritize your personal well-being. Although prioritizing your personal well-being is the last tip in this article, in my opinion it is the most important of all. It is impossible to operate and effectively manage a successful practice without making your personal well-being a priority.
Recently, attorney well-being has been at the forefront in legal articles and discussions regarding the profession. Multiple factors, including professional and financial stress and lack of autonomy and motivation, can lead to dissatisfaction.
It is important that we each determine the personal and professional factors that provide us with satisfaction. Although income and prestige can be significant factors, data from recent studies suggests that the quality of personal and professional relationships, meaningful work, and autonomy are fundamentally important. To the extent that you can prioritize the factors that truly give you satisfaction, you can achieve success on both a personal and professional level.
Transitioning to your own solo/small-firm practice is an exciting and challenging process. Various resources are available to aid in planning, operating, and effectively managing your firm. Implementing the steps outlined above will assist you in establishing a solid foundation for a successful practice.
Damian Thomas is a shareholder with Wasserman & Thomas, P.A. in Miami, Florida.