Four things to consider before opening a solo practice
From a careful evaluation of financial capacity to reliance on a professional network, here are steps to take before starting a solo practice.
No matter how long you have been practicing law, the idea of starting your practice might sound appealing because you would be your boss. But before jumping into it, there are a few steps you should take to prepare yourself.
Crunch the Numbers
Take some time to sit down and look over your finances. Determine how much you will need to earn to pay your bills and support yourself and any family members. Then figure out how much it will cost to run your new law firm. If possible, eliminate extra expenses like subscriptions. Getting your finances in order can give you a safety net when you are working for yourself. Another way of cutting down your monthly expenses is by refinancing your student loans by taking out a new loan to pay back the old one. Once you understand how much expenses will be, add the numbers up, and leave some room for taxes.
Choose Resources Carefully
When you are in business for yourself, you won’t have as many resources as larger corporations, and the expenses can add up quickly. Office space is often a big expense, so consider the best location for your clients. The location matters too because everyone can be a source of potential referrals. Choose your banking carefully as well. You will need dedicated accounts, like IOLTAs and operating accounts. Understand the rules around these types of accounts, as it will be on you to ensure you are following them. Choose the bank itself carefully as well. Smaller banks could offer more value, but larger ones may have more resources. Understand potential referrals as well. Smaller banks might be more likely to refer your firm to other clients.
Get Everything in Order
You already know there are legal requirements for launching a startup, even if that startup is your firm. Other elements are not legally required but are very important, like a website. Even if you are going solo and setting up a small practice, you will still want a website. It doesn’t have to be fancy, but the style will depend on the area of law you are practicing in. No matter your area of law, make sure it leaves a good impression because this is often the first aspect of your practice potential clients see. You’ll also want to come up with a name but name it carefully. There are certain rules around naming law firms that may not apply to other businesses. It should reflect the firm accurately. You could even get in trouble for a small detail like using offices instead of office if you only have one.
Rely on Your Network
Think about those in your professional network who you could rely on for referrals. If you are entering tax law, ask your accountant to help spread the word. If you are going to work in family law, speak with counselors you know. However, if you currently work at a law firm owned by someone else, make sure you don’t do anything that could be interpreted as trying to steal that firm’s clients.