Earlier this year, the Standing Committees on Ethics & Professionalism (TIPS) and Outreach to Law Students conducted a one-hour online seminar for graduating law students who intend to open their own law practice.
Practicing law is challenging enough, but running a business adds complexities and time commitments that entrepreneurs must also navigate. Nevertheless, lawyers are smart, and it can be done! During the seminar, we discussed some of the ethical and practical considerations.
As you begin planning to open your own law practice, you should first recognize the concept of “brand.” Your brand is your public identity and reputation. It will dictate how you are seen by potential clients and is a harbinger of your long-term success.
Potential clients will ask others about you, consider your advertisements, and, of course, search available social media.
You will want to ask yourself: Is my brand who I strive to be? Does my brand communicate professionalism, competence, and trustworthiness? Is my brand consistent across all platforms?
Moreover, are you ready to live your brand, not only during practice hours but also in life? You can have a private life but be self-aware. Lawyers, like everyone, have strong opinions of the day and are free to share them. However, oversharing on controversial topics, particularly on social media, could cost you future, well-paying clients.
Remember: Potential clients are watching and listening to you.
Competency in your chosen area of practice is your most important legal skill. You can be a general practitioner or instead focus on distinct types of representations.
The following comment to Rule 1.1 succinctly states the level of competency required of a lawyer, regardless of practice area: “Perhaps the most fundamental legal skill consists of determining what kind of legal problems a situation may involve, a skill that necessarily transcends any particular specialized knowledge.” (All references to rules are to the ABA Model Rules. Consult with your jurisdiction’s rules of professional conduct, as the language may not be identical.) You will need to fully understand all of the elements and contingencies for every step of your legal representation so that you can competently meet your client’s objectives.
Finding a mentor in your area of practice is a great way to build skills and remain current on the law. You should build a network of colleagues and join the relevant sections of your local bar organizations. Fellow lawyers whom you trust can be an excellent sounding board as well as a font of knowledge.
Competency includes the substantive and procedural areas of your legal specialties and also your use of technology. You must invest in a secure case management system to protect your case information. Rule 1.6 prohibits you from revealing any “information related to your representation of a client,” subject to limited authorizations or client consent. Dedicate an office or private room for your practice to ensure no unauthorized people can see or hear you practicing law. If you use your laptop in public places, have a privacy screen.
Now that you have your own law practice, you may find that relatives and friends will seek you out for their legal problems, regardless of your area of expertise. Be careful when agreeing to a representation of an unfamiliar or novel matter. You can refer potential clients to other trusted lawyers when you are not the expert.
Finally, be mindful not to fall into the trap of accepting a referral fee from another lawyer just because you referred the business. Unless you are willing to assume joint responsibility for the representation and obtain the client’s consent in writing, Rule 1.5 prohibits fee splitting.
Running a solo practice takes a tremendous amount of time. Not only are clients retaining you for legal work, but you alone are responsible for maintaining your law business. As the comment to Rule 1.3 emphasizes, your “work load must be controlled so that each matter can be handled competently.”
Once you receive new work, heed the comment’s additional admonition:
Perhaps no professional shortcoming is more widely resented than procrastination. A client’s interests often can be adversely affected by the passage of time or the change of conditions; in extreme instances, as when a lawyer overlooks a statute of limitations, the client’s legal position may be destroyed. Even when the client’s interests are not affected in substance, however, unreasonable delay can cause a client needless anxiety and undermine confidence in the lawyer’s trustworthiness.
If you cannot devote the anticipated time to handling a particular representation, it is best to decline or refer the matter to another lawyer.
“While it may be just another case to you, it is important to remember that it may be the most important issue in your client’s life.” Erika Winston, Are These Common Client Complaints Plaguing Your Law Practice?, https://tinyurl.com/3jf3jujr. Your clients need you and will want to hear from you about their legal matters regularly.
Rule 1.4 requires promptly returning all calls, emails, and texts. The best way to minimize communication issues is to set expectations at the start of the representation. For example, let the client know you will communicate with them every 30 (or 60) days on what is happening. Of course, when anything significant occurs, you must communicate with your client promptly.
The most significant difference between working for a law firm and flying solo is who is handling the money. You are now in charge. You will need separate bank accounts for your practice: an operating account for your business expenses and a client trust account (CTA) for retainers and other client deposits. State bar associations typically offer guidance on proper money handling.
Your money must never be commingled with your client’s money. The only money that belongs in your CTA is your clients’ money, and the only money that belongs in your operating account is your money.
A client retainer must be earned to transfer funds from the CTA into your operating account. One of the biggest mistakes a lawyer can make is directly depositing client funds into their operating account before earning the money. Generally, states prohibit non-refundable retainers. As you complete legal work for your client, measured by hours billed or tasks completed, you can transfer the earned money from your CTA to your operating account.
As a solo lawyer starting out, your money likely will be tight. It is tempting to want to “borrow” funds from your CTA. Borrowing client funds, however, is the same as misappropriating, which, if discovered, can lead to suspension or disbarment. It will not matter whether you intend to repay or repay the “loan.”
If you think no one will find out, think again. Most states require banks to notify the disciplinary authority if a CTA check bounces for any reason. If that happens, both of your accounts may be audited, and poor recordkeeping, commingling, or misappropriation will be obvious to the state bar’s forensic accountant.
Finally, you must maintain financial documents and ledgers. According to Rule 1.15, failure to maintain records is a separate rule violation and can lead to a negative inference for any disciplinary issues regarding proper money handling.
Of course, all lawyers, regardless of the structure of their practice, should be familiar with all of the Rules of Professional Conduct in the jurisdictions in which they are admitted.
A last point was made during the online seminar: Even if your state does not require it, you should obtain legal malpractice insurance with sufficient coverage. You worked hard to fly solo, but mistakes can happen. You do not want to lose the legal empire you are building. Good Luck!
