Starting a law firm, like starting any business, is hard work. It involves time, patience, capital and a ton of effort in order to make your business succeeds. If it goes well, you may find yourself making a positive difference in the area of law you have always dreamed of working in, earning yourself a great reputation and becoming wealthy.
Of course, if it goes wrong, you’re unemployed.
Starting a law firm is not easy, but with the right preparation it can be done. Here are five things you should know before starting your law firm.
Business planning is required
A basic business plan is essentially a requirement when it comes to the foundation of any business, and a law firm is no different.
Business plans range in size and complexity. In some cases, they aren’t actually written, formal documents. However, you may find that writing down an actual business plan can help you expand on your business goals, set formal benchmarks and better illuminate roadblocks or challenges in your way.
While there is no “required” format for a business plan, they usually contain a few standard metrics, including:
- Company description: The basics of your business, including where you will practice and your areas of specialty.
- Market analysis: Once you know your target customers, expand – who are they, where are they, and what sort of opportunities do you have to connect with them?
- Competitive analysis: What other law firms practice your area of law, and how will you differentiate yourself from these firms?
- Organizational chart: How many employees or partners will you have, and who is responsible for the management and supervision of other employees?Marketing plan: How will you market your business? What kind of marketing budget will you have?
- Financial projections: What are your estimated expenses and projected revenue?
Have your business support team in place
No matter how smart or productive you are, you will not be able to handle every aspect of your business on your own. Before formally cutting the ribbon and opening your door, make sure you have a handle on who is going to manage a variety of your business operations. This includes basic functions like accounting, human resources, marketing and administration. You may not need to keep all of these areas in house, but at a bare minimum, you must know how they will be handled and what the costs of these critical operations will be.
How will you handle the back office systems?
Up until now, this article has emphasized the areas where law offices is similar to opening another small business. However, there are some specific back office operations which are largely exclusive to law offices. For example, what procedures need to be put in place to protect attorney-client privilege? What technology, specific to the legal professor, do you need to acquire? What billing software do you need?
These are all questions which you must be able to answer, along with specific metrics like time it will take to acquire & set up, as well as cost.
Marketing is crucial to your success
Successful law firms, like any successful business operations, do not simply rise from the ground: You must have a marketing vision and plan in place, and be prepared to market your business through paid advertisements. Before you formally launch your business, ask yourself these questions:
- What’s your marketing budget?
- Who are your most likely customers, and how do you plan on reaching them?
- Will you seek business or individual clients, and how do you plan on reaching them?
It’s also important that you not neglect physical marketing and branding. This includes everything from the look of your signage to the logo on your business card. Trying to make a logo on your own is a bad idea, as you can easily design something which looks amateur – the last thing any new law firm can afford! Make sure you find a design agency that understands your law firm and can create high quality marketing materials for you.
Networking – in all forms – is a must
Face to face networking is a fantastic way of getting your name out there. This often requires investing in memberships to your local Chamber of Commerce, or buying tickets to events at your local Bar Association. This can be expensive, but these expenses need to be viewed as an investment which will pay dividends in the long run.
However, social networking is now virtually a requirement. It goes without saying that you need a first-rate website, optimized for search engine discovery, to promote you and your firm. However, an active presence on social media is also necessary. When it comes to the legal community and social networking, did you know that:
- Law firms that use video (like YouTube) see a 41% increase of potential clients who visit their website.
- Social media use can improve your search engine optimization, thus ensuring that your website gets in front of more people.
- Blogs generate 55% more traffic to your website.
- 65% of all law firms are now dedicating “most” of their marketing budget to online marketing.
If you feel that you cannot handle social networking yourself, or are concerned with doing so in a professional way, fear not: There are specific marketing firms available that can manage a legal blog for you and handle all of your social networking needs. Better yet, these firms often have ample experience with maintaining a social networking presence for law firms.
Starting a law firm isn’t easy, and if you think it is, you’re dreaming. However, any firm can be successful if they follow basic principles of business like the ones laid out above. Remember, no law firm has ever been successful without planning, hard work and without approaching their creation like a business startup. Adhere to these basic ideas, and you’re giving yourself a shot at success.
