Just as entrepreneurship is the new American dream, owning your own law firm is the new ambition of many of today’s up-and-coming lawyers.
I’ve seen many young lawyers become disillusioned with the stifling and outdated corporate model of the traditional law firm.
They want to represent clients and fight for causes that they believe are important. They want to hang a shingle and pave their own way.
Running a law firm and embracing entrepreneurship is a worthy and noble calling. I built Pines Federal from the ground up, starting as a one-man operation working from my garage into a successful business with offices in Houston, Atlanta and Baltimore. There is nothing so life-affirming as turning your entrepreneurial vision into a sustainable business.
While many lawyers dream of starting their own firms, only a small percentage actually follow through and create the businesses that they envision. The reality is that law firm management isn’t for the faint of heart.. The decision whether to start your own law firm is a critical crossroads and comes with consequences for your legal career regardless which path you choose.
Like any entrepreneurial venture, I faced countless obstacles and spent years figuring out the nuts and bolts of business ownership and I still learn something new every day. Here are a few of the business frameworks and strategies that I utilized as I got my law firm off the ground and built it into a successful business.
Visionary, Manager, Technician Model of Law Firm Management
The most important thing a would-be founder needs to realize is that growing a successful firm requires you to be a good leader and businessman in addition to being a good lawyer.
Broadly speaking, there are three aspects, or roles, involved in running a law firm: the visionary, the manager, and the technician. Respectively, these are the people who create the firm’s top-level strategy, the people who run the daily operations of the business itself, and the lawyers who devote their time to practicing law.
When you start your own law firm, you often lack resources to hire people to fill the roles you are not proficient at and end up stuck filling all three roles at once. Despite the fact that these roles require very different personalities and skill sets, they are all necessary for building a successful business. The following is a breakdown of these roles:
The visionary is the captain of the ship. He or she determines where the company is headed. They are not just a boss, but a leader and a change-maker.
The visionary is responsible for defining the firm’s mission statement and culture. They ask questions relating to the firm’s identity like, “what kind of law firm do we want to be?” “What is our purpose?” “Who do we represent and why?”
The visionary is in charge of top-level strategy initiatives, such as:
- Marketing goals
- Company culture
- Pathway to partnership
A successful visionary isn’t just good at telling people what to do, but at motivating and inspiring people so that they want to do it.
This is one reason why a clearly defined pathway to partnership is so important. It gives your technicians – your boots-on-the-ground lawyers – a vision for what they can accomplish at your firm. It gives them a path for career growth, a sense that they belong there, and a reason to stick around and invest in your firm’s success.
The visionary has to stay abreast of trends and changes in the world of law and adapt to new technologies as they become available, incorporating the ones that will benefit the firm when relevant. They need to anticipate how a rapidly changing world will change the needs of your clients, and how your firm can pivot and adjust to change.
Do you charge a flat fee or hourly? How can your firm successfully incorporate new technologies like video conferencing and tools like Google Meet and Zoom to its benefit? It’s the visionary’s job to anticipate problems and develop solutions.
The visionary is the big-picture thinker. The manager by contrast is the practical one who runs the business on a daily basis and makes sure people implement the plans of the visionary while keeping the firm organized and profitable.
The manager deals with the day-to-day management of the law firm to make sure it’s running as efficiently as possible. They do this by creating internal systems and processes for every conceivable business task, which includes everything from invoicing and client communication down to which office suite and CRM to use. These processes help the business maintain quality standards and client satisfaction so that your firm runs like a well-oiled machine.
Executing the marketing plan is also the manager’s domain. The manager is responsible for determining your firm’s Key Performance Indicators (KPIs) so that you can easily determine whether your firm is growing its client base and making money.
The manager is responsible for executing the visionary’s plan and maintaining open communication channels so both the visionary and manager can be agile and adapt when the plan needs to be changed.
Last, but certainly not least, there are the technicians. These are the people who execute the legal work necessary for the law firm to produce the work and profit necessary to survive and grow. In the context of law firm management, these are the lawyers who go out and win cases for your clients. In this framework, the technician role also extends to your paralegals, interns, and administrative assistants.
The visionary and manager work together to make it easy for the technicians to do their best work. The visionary motivates them by establishing positive company culture, a respect for diversity and inclusion, and opportunities for career growth. The manager enables them to be good at their jobs by offering systematic processes that outline how things are done and clear communication at every level of leadership.
The technicians need to know not only how to practice law but how to put their client’s best interests first. which includes knowing when to tell them “no” in a respectful way.
The technician should take a holistic view of client relationships. Should the client take the case at all? Should they agree to a settlement instead? Can they even afford to stay in court until the bitter end?
It’s the technician’s job to guide their clients toward what they need, not what they want. The visionary needs to remind the technicians of this. The manager makes sure that the technicians do this regularly, whenever they speak with clients.
Common Misconceptions About Managing a Law Firm
I set off on my own entrepreneurial journey over a decade ago and I have never looked back. Looking back at the beginning, I now realize I had some major misconceptions about running my own law firm. I have made plenty of mistakes over the years and learned from them. Having traveled down this path already, I hope my experiences can spare the next generation of entrepreneurial lawyers some of the surprises I faced.
Anyone planning on starting a law firm needs to know exactly what they’re up against – to have a clear understanding of the sacrifices it takes, and the risks involved.
1. If You Can Practice Law, You Can Run a Law Firm
Law school teaches you how to practice law, not how to run a law firm.
Running a law firm requires not only knowledge of the law, but vision, business management skills, organizational skills, tech-savvy, and the willingness to delegate tasks.
When you’re the CEO of a law firm, you don’t just need to win cases. You need to build a brand, win clients, and run your business efficiently, all while remaining profitable.
2. I Can Always Just Join Another Law Firm If It Doesn’t Work Out
This is usually not the case. The legal sector operates much like a guild or a mob. The moment you decide to go your own way, other firms often see you as a competitor and close their doors to you.
It can be challenging for lawyers who make the jump to law firm management to rejoin another if things don’t work out as they planned. That’s why it’s very important that you only jump into entrepreneurship if you have clearly defined your path to success. Keep in mind also that not everyone is equipped to be their own boss. It requires you to be highly disciplined and ruthlessly efficient with your time.
3. All I Have to Do Is Win Clients
Once again, not true. Running a law firm is running a business. You don’t need to just win clients; you need to hold onto your clients too. Client retention is just as important as client acquisition.
At the end of the day, all businesspeople are salespeople on some level. You need to convince potential clients that they should choose your firm to represent them and not your competitor across town. I recommend To Sell is Human by Daniel Pink for any lawyers interested in the art of salesmanship.
Running a business also means coming up with a sensible business strategy set by realistic and time-bound goals, and a budget that accounts for all the expenses (startup costs, living expenses, marketing, etc.) it will take to get your business off the ground.
4. I Can Do It All By Myself!
I thought I could do it all by myself but quickly realized that doing everything was impossible. The most common mistake that first-time business owners make is assuming that they can get it all done on their own – business management and top-level strategy included. This is delusional thinking and is also the reason why most first-time business owners fail.
Delegation is one of the most important skills a business owner can have, but it’s also one of the most difficult to master if leading people and making decisive choices doesn’t come easy to you. You need to know how to delegate tasks that are not your strengths and allocate time to strategizing with your team.
Always remember that you’re not alone. As a law firm CEO, you have the power to build an awesome team where you’re surrounded by people you trust. That can include having business coaches or non-legal business consultants to help fill the gaps in your knowledge.
So, Should You Start a Law Firm?
I would love to say “yes, absolutely!” but my answer is a conditional “yes.”
When you’re a law firm owner, you get to practice in whatever areas of the law you want rather than lock yourself into a narrow niche. You get to live your life with purpose and meaning rather than fulfill someone else’s dream.
It’s common in entrepreneurship circles – as it is in the legal sector – for people to see the end results and want it for themselves but aren’t willing to meet the demands that business ownership makes of them. Running a law firm requires that you make smart choices and have faith in your own abilities.
I fully encourage any competent lawyer to go for it – but only once they have the practical experience to back it up. That doesn’t just mean law experience, but knowledge of the ins and outs of running a law firm like a business.
It’s a long way to the top and the climb is rough, but you can’t beat the view.