My co-founder (Hannah Genton) and I excitedly spoke about starting our own law firm for some time before we decided to actually do it. When we did, we sat (with trepidation) in front of a laptop and asked Google to tell us “how to start a law firm.” There are articles upon articles about content calendars, basic business plans, budgeting, and legal technologies – and all this information is great. But the information that’s currently available omits several key lessons and perpetuates some misconceptions about starting a law firm. I’m writing this article to set the record straight.
“Starting a law firm isn’t hard. You really only need one client to get started. What’s hard is recognizing the limits of your expertise and running your law firm like an entrepreneur, not like an attorney.”
Lesson 1: Law School Did Not Prepare You to Run a Law Firm
The most important lesson we’ve learned is that a law firm is, first and foremost, a business.
To run a law firm, you need to be entrepreneurial and creative. You need to be willing to not know all the answers, make mistakes as you go, and respond confidently to risk. Law firm owners must be business savvy as they’re faced with the difficult task of running a profitable business in a highly regulated space.
Yet, none of these qualities are taught in law school, nor are they typically favored by the law firms hiring recent graduates. Attorneys are stereotypically risk-averse, happy to simply outline compliance risk while business owners bravely decide which path to take. Moreover, mistakes made in legal practice are rarely rewarded, and creative thinking has little place in the traditional law firm.
I want to stress the importance of the following points for any attorney thinking of starting a law firm:
- Law school has not prepared you for this. You will need to educate yourself on running a business, not just complying with corporate laws, and you will need to take (intelligent) risks to succeed.
- Starting a law firm does not mean you simply get to practice law on your own terms. Business management is crucial to your success, and it must be a focus of yours if you want to succeed.
- After everything I’ve shared, if you still want to take the leap, the most important step is the first one: getting started. Running a growing law firm has its challenges but it is also incredibly rewarding.
Lesson 2: You Can’t Do It All Yourself
A keystone to our success has been our decision to outsource as early as possible. There’s so much material available that makes you think that you can indeed craft beautiful marketing collateral while also generating robust business plans, woo new clients, and creatively problem solve for your existing clients. But with limited time and expertise in these areas (unless you were a marketer in your past life), it’s best to recognize the limits to your abilities.
We love hiring professionals who know more than us and who embody our corporate values: humanity, quality, and autonomy. Operating our law firm without ego has allowed us the freedom to learn about running a business as we go, make mistakes and grow from them, and collaborate with some extraordinary people across a range of industries and expertise.
While outsourcing across any area you don’t have the knowledge, passion or experience to manage is (in my opinion) a good decision, choosing who is going to manage your books is going to be the most important decision you’ll make. To make this decision, we asked anyone and everyone we could think of – including sole proprietors and law firm founders working in our industry, Google, and legal tech vendors. After some trial and error, we finally landed on the right financial controller and bookkeeping firm, and it has been a game-changer. We now have clearer data that allows us to make informed decisions and we keep a rolling forecast that helps us plan ahead using accurate information from prior months. We’ve grown exponentially since bringing on the right partner on the financial side.
Lesson 3: You Can Do Law Differently, and Profitably
In today’s legal marketplace, passion is a powerful competitive advantage. If you’re keen to start your own firm and make a real difference, it may pay to leverage that passion and use it to differentiate yourself (or your firm) within the competitive legal marketplace.
In the case of CGL, we have created a law firm where attorneys choose their own hours and how much work they want to carry. Our full-time team has reduced billable targets that make work-life balance attainable, as well as the freedom to work from wherever they want. This allows us to attract highly experienced and talented attorneys for whom the traditional model of legal practice doesn’t work. With this exceptional talent on our roster, we’re able to attract and retain clients whose needs and budgets fit our model of practice – and we’ve been growing consistently since we started.
There are countless opportunities within the legal industry to practice differently and profit from it. You simply need an idea, a niche, and a single client to get started. From there, you need to fail well, learn constantly, invest wisely, and work intelligently to grow your business.