Well, you’ve done it. You’ve left your law firm and decided to open your own firm. And that idea that sounded so tantalizing while still a fantasy in your mind is now much more stressful when facing the real life decision making process that is staring you in the face.
Deciding to go solo doesn’t have to be overwhelming. Organizing your expenditures and tasks around a budget and timeline will help you to create the most secure foundation for a successful future.
If you have not already formed your own entity for purposes of conducting business as a law firm, now is the time! Depending upon the type of entity you form, you may need some or all of the following: Certificate of Formation, Bylaws, and an Employer Identification Number (EIN) from the Internal Revenue Service. When I set up my own entity in 2010, I hired a lawyer to undertake the formation on my behalf. I know many lawyers that choose to do this themselves to save money.
When planning the monthly budget for your new firm, rent will be expense number one. Rent can vary widely based on location and amenities, so make sure you explore different options before committing. Don’t overreach with the new space; no, it won’t have all the bells and whistles of your old firm that has been around for 40+ years, but as long as it provides you with functional space then your needs will be met. Sometimes, working in a shared office with many other solo practitioners can be a great way to pool your collective knowledge, skills, and funds to help each other out.
While a seemingly trivial concern at this point, it will most assuredly impact your own daily work life and all visitors that come to your office. Make sure that you have dedicated parking for you, your employees, and mostly importantly, your future clients. Nothing makes a worse first impression on a client than having to circle the block multiple times trying to find a parking space.
Now that you have your new office space, make sure you get the lights turned on. Obviously, electricity will take priority, but don’t forget about phones, alarm system, Internet, and cable. Make sure you ask the new landlord about any restrictions or if the building is already wired for certain providers.
So the space is secure, and the lights are on. You are standing in the middle of a big empty box. Office furniture is a crucial next step, if for no other reason than needing a place to actually DO work. You don’t have to spend a small fortune on office furniture, though, in order to set up. Start with something basic that will provide you with functionality. You can find lower cost and decent looking office furniture through used office furniture resellers or at stores like Costco, Ikea, and Office Depot.
Think strategically here, and anticipate the structure of your new firm. Then start with the basic hardware items required for everyone to operate at their maximum potential. Invest money in an IT consultant to assist in the selection and implementation of your law office network, software, and hardware, including a law firm database or case management software and a photocopier lease.
Even though we do tend to do the majority of our work these days on computers, iPads, and other digital devices, a law firm office does still need office supplies. Purchase a small amount of copier/printer paper, pens, highlighters, paper clips, legal pads, and whatever else you use on a regular basis to have on hand for you and your staff.
Your new law firm will need to purchase several types of insurance, including health insurance, general liability insurance, professional liability insurance, workers compensation insurance, and more.
LAW FIRM BANK ACCOUNT / LINE OF CREDIT
Before you even start looking at expenses, open a bank account for your new firm. Most banks have a variety options and a lot of flexibility available for business accounts. If you have a personal relationship with a banker already established, then utilize it to set up your new account. Establishing a line of credit for your new firm will also help with initial start up costs and keep cash liquid as you begin creating your business.
STAFF SALARIES / PAYROLL SERVICE
Establish staff salaries and a formal employment policy. Your law firm payroll can be run through your own accounting software like QuickBooks, or you can sign up for a payroll service. Your law firm can outsource its payroll and tax obligations to a variety of different companies including Paychex and ADP.
ACCOUNTING SOFTWARE AND CERTIFIED PUBLIC ACCOUNTANT
Running your own law firm will require accounting software. Hire a CPA to create your initial chart of accounts and set up your business financial architecture. You will also most likely need to retain their services for filing taxes at fiscal year end.
BUSINESS CREDIT CARD
Having a business credit card will make your life easier. A corporate American Express or other charge card will sync up with QuickBooks and update your charges automatically. Gone are the days of scribbling notes on paper statements to classify charges. Now, you can update your law firm’s finances in real time with a cloud-based accounting program that interfaces with your business credit card.
LOGO AND BRANDING
Getting your logo designed can be much easier than you think. Digital design auction websites allow you to enter certain guidelines (color preferences, industry, values your logo should communicate), and then sources multiple graphic designers to create logos for you. You can rate and rank your favorites, provide feedback, and direct the designers towards your perfect logo. You can also hire a reputable local design firm to handle the branding, messaging, logotype, and pantone colors for your entity.
When you meet professional contacts, or really anyone, the main point of introduction will be your business card. A law firm business card should make a statement, but be careful exactly what statement you are making. Select a pantone color for consistency of your law firm colors across all media. Print a small batch of 250 cards on the first go-round to make certain you are happy. I personally like a card printed on heavier stock as it feels more substantial to the touch.
Make sure you have a digital version of your letterhead. In today’s digital world, more and more documents are sent via email, so having a digital template is crucial. You can save money on printing costs by buying bond paper and only printing out your letterhead when necessary.
This is not a place to go with the cheapest option, as it is the most important digital asset you will utilize. Your website needs to reflect your firm and provide avenues of engagement for both new clients and referral partners. Hire a professional to create your website, and discuss search engine optimization in order to provide you with more exposure.
SEVEN AWESOME RESOURCES FOR NEWLY SOLO PRACTITIONERS:
- MyShingle – Carolyn Elefant
- Solo Practice University – Susan Carter Liebel
- American Bar Association Solo, Small Firm and General Practice Division
- Solo in Colo – Colorado Bar Association Small Firm Section
- How to Start a Law Firm – FindLaw
- Small Firm Innovation – Clio
- Tennessee Bar Association – Solo Practice Toolkit