Of course, the reality of starting your own business can be very different from how you imagine it. You will likely run into many difficulties, many ups and downs along the way.
Opening a law firm for a young professional is a very interesting prospect. It doesn’t require huge start-up capital. In addition, due to the constant demand for this type of service in America, the investments are amortized quite quickly. The main difficulty lies only in the ability of the lawyer to build up his clientele in a short time to ensure profitability. Editor’s Note: Young does not refer here to the age but to the “novelty” of the lawyer. Some great lawyers finished their law school later in life.
In addition, the current trend shows the globalization of the legal services market in the United States, which makes this field of activity an even more attractive option for a company. In addition, US law firms lead the rankings of law firms in the world.
In this article, we will detail the main features of running a legal business in America and provide a checklist for young lawyers with tips on opening a law firm or starting an llc. in line.
Should you open your own business?
First of all, you need to ask yourself if you are ready to open your own law firm. After all, there are many positive aspects to working for a large corporation. In large companies, there are already developed working structures, established contacts with customers, accounting, etc. If you are opening your own business, it will be up to you to organize all the processes. It is not easy and very responsible. Are you ready to face various difficulties in attracting new clients, managing personnel and financial aspects, constantly monitoring legislation, establishing contacts with state authorities, etc.
If your answer is a firm yes and you are ready to face all difficulties and risks, then it is time to open your own business.
How to start your law firm: checklist
The first thing a young lawyer should do after deciding to start a law firm is to research potential clients and competing markets. This will help you get a lot of the information you need to make a business plan.
Then you will have to describe the main characteristics and strengths of your future business, plan financial investments and formulate a marketing strategy. The goals and objectives of the company should also be included in the planning.
Remember that it is always easier and more reliable to work with a clear plan.
The second step on the path of the young professional towards his own law firm should be the choice of the area of practice. Less and less often, lawyers offer universal services. The choice of your area of practice allows you to build up a clientele quickly.
Evaluate your strengths and weaknesses to choose the right area. Also consider that the choice of area of practice affects your income. For example, lawyers who deal with intellectual property protection cases earn twice or even three times as much as specialists in divorce proceedings, labor protection, etc.
Choosing the name of a law firm is one of the most important steps in its founding. But there are certain rules that must be followed when making a decision.
When coming up with creative names, remember that they shouldn’t be misleading. Do not use the words “and partners” if you do not have partners or “group” if your firm is not run by a group of people.
Choose the legal form of the company
Determine how you plan to run your business and then choose the right business form. If you are going to run the business on your own, you can choose a sole proprietorship or an LLC. If there is more than one lawyer at the head of the company, you have several options to choose from:
- Limited Liability Company (LLP);
- Partnership. It is a general partnership with unlimited liability of its members;
- Professional company. It is similar in many ways to regular limited companies, but differs in that only representatives of a certain profession (in this case lawyers) can own shares.
A convenient desk and its location are very important to your practice. Check out the different office options in your area to accurately choose the one that meets all of your needs.
Equipping your workplace with everything you need is also important and quite expensive. Remember to allocate part of your budget for a good office setup when developing your business plan.
If you don’t have a client base yet, or if it is not well developed, you need to think about ways to attract new clients.
First, contact lawyers in related fields. About 31% of clients find a lawyer through a referral from another professional. Join local bars to meet experienced lawyers, seek advice and ask questions.
A great idea for attracting clients at the initial stage is to organize free consultations (for example, once a week at certain times).
In addition, an excellent but risky option may be to represent the interests of citizens with a working life position. Especially if it’s covered in the media. But in this case, a good PR is only possible if the court decision is positive.
Of course, your customers will not look for your contacts in the phone book. About 37% of people search for law firms through search engines like Google. In this case, the saying “beautiful feathers make beautiful birds” may refer to your website because your customer gets the first impression of your business when they visit your site. There, your customers will be able to get acquainted with the list of services provided by the company, prices and make a decision about cooperation.
In addition, online marketing is very important for promoting the services of the lawyer. Most likely, you should consider contacting a marketing company that provides professional contextual advertising services. They will help you promote your website and attract more customers. Large financial investments will only be necessary at the first stage of the promotion until the clientele is built up. Then personal recommendations will play a much bigger role.
One of the most difficult aspects of running a law firm is financial planning.
- You need to open a bank account for your business in order to handle customer payments and pay your fees;
- It is important to set aside money for mandatory expenses: business registration, license fees, taxes, etc.
- Approve a budget for promotion and advertising;
- Determine how you will bill your services (fixed or hourly) and how you will pay your employees if you have them;
- The budget for the rent, the renovation of the offices and the purchase of the necessary equipment must be well calculated.
Of course, the reality of starting your own business can be very different from how you imagine it. You will likely run into many difficulties, many ups and downs along the way. Starting a law firm is a serious and responsible step. We hope this checklist helps you on this difficult but exciting path.