How To Start a Law Firm | Schneider Williamson

If you want to enjoy more independence in your law career and have more freedom to take cases that interest you, then starting your own law firm might be the right option. For the attorneys who possess an entrepreneurial spirit, we’ve provided you with a thorough guide on how to start a law firm, drawing upon our own experiences building Schneider Williamson.

There’s no single formula for starting a law firm, but the process can be generally divided into 4 steps:

  1. Business planning and strategy
  2. Startup Work (i.e., administrative tasks, paperwork, and acquiring infrastructure)
  3. Client Acquisition (i.e., finding your first clients and creating a name for yourself)
  4. Growth Preparation (i.e., making sure you have processes in place for sustainable growth)

Having your own legal practice can be a rewarding and fulfilling career path, but it does require careful planning, hard work, and—once more, for emphasis—hard work.

But, if you follow these guidelines, then you can boost your chances of success in building a thriving legal practice.

Should You Start Your Own Law Firm?

Starting a law firm is highly challenging and, at times, all-consuming. Before you take the leap, it’s important to consider whether or not it’s the right choice for you, or if you’d be happier finding work at a law firm that aligns with your interests and goals (as much as possible).

There are certainly benefits to starting your own firm:

  • Autonomy and Control: As a sole proprietor or partner in a law firm, you have complete control over your work, decisions, and the direction of your practice.
  • Financial Rewards: With careful planning and hard work, running your own law firm can offer significant financial rewards.
  • Flexibility: You can set your own hours, work from home or a remote location, and choose the types of cases you want to handle.
  • Personal Satisfaction: There’s nothing more satisfying than building something for yourself.
  • Opportunity for Growth: A well-managed law firm can grow and expand over time, offering opportunities for higher income and professional development.

The big question is: are these benefits worth the time, effort, and financial risk?

If Yes, Start Your Own Law Firm

You’re in a good position to start your own law firm when you have:

  • Passion and Expertise: If you have a deep passion for law and a strong area of expertise, starting your own firm can allow you to focus on the types of cases you love.
  • Entrepreneurial Spirit: Being an entrepreneur requires a willingness to take risks, be self-disciplined, and be comfortable with uncertainty. If you possess these qualities, starting your own law firm might be a good path for you.
  • Market Opportunity: Researching the legal market and identifying a niche or underserved area can increase your chances of success.
  • Financial Stability: Starting a law firm can be financially challenging, so it’s helpful to have a solid financial foundation before you take the leap.

If No, Hold Off

You might have difficulty starting a law firm if you have:

  • Lack of Experience: If you are new to the legal profession or lack experience in a specific area of law, gaining experience at a larger firm might be beneficial before venturing out on your own.
  • Financial Constraints: Significant financial burdens, such as debt or family obligations, can make it difficult to start and sustain a law firm.
  • Lack of Business Acumen: Every lawyer has legal knowledge, but if you’re going to start a law firm, then you also need to understand business principles and have strong business management skills.
  • Personal Circumstances: Factors such as family commitments, health concerns, or significant life changes might influence your decision to start a law firm.

1. Getting Started

If you’re confident and excited about starting your own firm, then there’s nothing left to do but get started!

There are 3 things you need to do right off the bat:

  1. Find your niche
  2. Choose a business model
  3. Create a business plan

1. Finding Your Niche

When starting a law firm, it’s helpful to identify a specific niche or area of practice. There are many larger firms that tackle a wide variety of cases in different practice areas, but when you’re starting out, it’s best to choose a specialty; having a niche will help you attract clients, differentiate yourself from competitors, and build a strong reputation. It also makes your marketing a lot easier.

“The amount of time, effort, and emotional energy that it takes to start a law firm… I don’t think that people recognize the commitment it takes. So you better care a lot about the practice area that you’re working in.”

–Jason Schneider

Here are some strategies for finding your niche:

  • Leverage Your Experience: Consider your previous legal experience and areas of expertise.
  • Identify Market Needs: Research your local market and identify areas where there is a demand for particular legal services.
  • Evaluate Your Interests: Choose a niche that aligns with your personal interests and passions.
  • Consider Your Competition: Assess the competition in your chosen niche and identify opportunities to stand out.

“I’m motivated by doing good work. I like to help people, and I would much rather help a human being than a big insurance company or a corporation. It’s just different when you’re doing work for a person.”

–Campbell Williamson

2. Choosing a Business Model

The business model that you choose for your law firm is a crucial decision that may impact your business for years to come. 

Decisions you need to make:

  • Fees: How do you plan on charging your clients? Decide whether it’s best for you to charge hourly fees, flat fees, contingency fees, or another type of payment structure.
  • Partnerships: Are you starting a solo practice, or are you partnering with other attorneys? If you’re going to form a partnership, then you and your partner need to decide how profits, responsibilities, and decision-making will be handled.
  • Business Structure: You’ll need to formally establish your business entity with the state that you’ll be practicing in and decide whether you’ll be operating as a sole proprietorship, limited liability company (LLC), or corporate structure.

Related Blog: Law Firm Business Models: What’s the Right Choice for Your Practice?

3. Creating a Business Plan

A business plan will outline your law firm’s goals, strategies, and financial projections. You’ll be thinking about these aspects throughout the entire “Getting Started” process, but it’s important that you formalize all these ideas in a traditional business plan document.

Here are the key components of a law firm business plan:

  1. Executive Summary
  2. Market Analysis
  3. Services & Offerings
  4. Marketing & Sales Strategy
  5. Financial Projections

We created an entire blog post on law firm business plans that will provide you with more detailed information.

2. Startup Work

Once you’ve decided how your law firm will be structured, you’ll need to set up all the infrastructure that’s required to keep your business operating smoothly and in compliance with the law.

“Don’t think that you need to do everything yourself. You don’t want to cut corners on certain things, especially your accounting. It’s helpful to enlist a financial professional to assist with those aspects of the business that you don’t have time to manage.”

–Jason Schneider

1. Legal & Administrative Work

Make sure you have all relevant paperwork, business licenses, and tax forms filed with the appropriate entities—these vary by state.

You may also need to purchase insurance coverage for your law firm, such as malpractice insurance or property insurance.

2. Finding an Office Space

You may (or may not) need to find an office space for your new law firm. Take the following factors into consideration:

  • Location: If you’re going to rent an office, you may want to choose a location that’s in close proximity to courts or prospective clients.
  • Size: Determine the appropriate size of your office space based on your anticipated workload and growth. If you’re starting a solo law firm and only expect to handle one or two cases at a time, then it might be more cost-effective for you to work from home (of course, we always recommend setting up an efficient home office so you can keep organized and on-task).
  • Office Layout: Pick an office that suits your needs. For example, if you expect to host clients in your office, then you’ll want to make sure you have conference rooms or even a lounge area.

3. Setting Up Case Management

“The biggest challenges that attorneys have are time management and caseload management. You can get into trouble when you let a caseload get away from you. Having the right tools and systems in place helps you make the most of your time and handle your caseload more effectively.”

–Campbell Williamson

It’s important to set up efficient processes to manage your casework. Many law firms still use traditional red wells for storing and managing documents, while other law firms are using software and other digital technology to streamline their day-to-day operations.

When you’re getting started, it’s probably best to create a process that is comfortable and familiar to you, but remember that your process should be scalable; as you take on larger and more complex cases, your case management system should be able to accommodate an increasing number of legal documents and client communications.

It costs a lot of money (not to mention time) to switch your entire case management system, but it’s much easier to make slow and steady improvements to your existing system as you gain more clients. Think about where you see your law firm in 5-10 years, and try to build the foundation of a case management system that you can build out over time to suit your future needs.

If you’re going to have employees or partners at your law firm, then your case management system will also need to be accessible to other staff at your firm, and you should be able to teach your system to any new employees that you hire.

Read our blog on legal automation for more information on this topic.

Related Blog: Legal Automation: Should My Law Firm Invest in Automation?

4. Digital Infrastructure

Most law firms these days use technology as a major component of their case management process. Think about the following ways you can build digital infrastructure for your law firm:

  • Technology: You may need to buy computers, printers, scanners, and internet connectivity for your office or home office.
  • Software: Find software that helps you with case management, client communications, marketing, word processing, building spreadsheets, or accessing legal research databases. There’s an endless number of software programs to use; find the ones that are most helpful, scalable, and cost-effective.
  • Data Security: You’re going to store and handle sensitive data, so it’s important that you have strong data security in all the technology you use. It might be helpful to enlist an IT professional to help you in this area.
  • Website: Nowadays, if you don’t have a website, then it’s almost like your business doesn’t exist.

3. Client Acquisition

Once you file all your paperwork and establish a system for managing cases, then you’ll have to do the truly challenging work: finding your first clients. You can do that through:

  • A professional network
  • Referral cases
  • Pro bono work
  • Marketing

1. Professional Networking

  • Professional Associations: If you haven’t already, join professional associations and attend industry events to meet and develop relationships with other attorneys and law firms. This is crucial for getting referral cases.
  • Community Involvement: Explore opportunities to get involved in community activities and build relationships with local businesses and residents.
  • Career Connections: Reach out to legal professionals that you’ve worked with at other law firms or those whom you’ve attended law school with.

“When you start a law firm, you have to find business, and the only way to do that is to start reaching out to people and letting them know who you are, what you do, and what you provide.”

–Campbell Williamson

2. Referrals

When you start a law firm, one of the best ways to get cases and start building “street cred” is by taking referral cases from other law firms. Some law firms or attorneys may not have the bandwidth to handle all their cases, or they’re looking for assistance from attorneys who specialize in a certain practice area.

For example, here at Schneider Williamson, we specialize in personal injury litigation, so we take referral cases from law firms that need greater expertise in litigation or personal injury cases—or law firms that are simply struggling with case overload.

It’s a crowded market, even for referral cases. You can stand out among the crowd by building strong relationships with other law firms and also by offering competitive pricing.

“A great way to get business is to be competitive on pricing. Someone who’s just starting out might be willing to take a smaller percentage of a referral fee just to get the work, and that helps them get cases under their belt and build relationships with other firms.”

–Campbell Williamson

3. Pro Bono Work

Working pro bono could be a helpful way to get some cases under your belt and build a strong reputation. Who doesn’t appreciate the morally righteous law firm that fights the good fight, free of charge? It’s a great news story.

Pro bono cases are not sustainable in the long run (or even in the short term), but if you’re starving for cases then it might be a good way to attract clients. Ideally, you would balance a pro bono case with one or two paying clients.

4. Marketing

Marketing is another skill set they don’t teach in law school. When you start a law firm, your marketing budget and resources will be fairly limited, so you want to focus on cost-effective marketing strategies, such as:

  • Digital Marketing: Create a website where you can give information about your business and highlight your expertise. Social media is also a great way to promote your law firm; posting regular content is a good way to boost your visibility, but you can also run digital ads.
  • Traditional Advertising: Many law firms utilize billboard advertisements, newspaper/magazine ads, or brochures. Not as cost-effective as digital marketing, but you can generate strong leads when you place ads in the right places. 
  • Word of Mouth: The best marketing is a happy client. If you have secured a strong outcome for a client, ask them to leave a testimonial for your website or on your Google Business page.

4. Growth Preparation

Every law firm strives for growth, but growth can unexpectedly cause problems for your law firm. We’ve seen small law firms begin to struggle as they take on more clients and cases; they didn’t have the systems in place to handle the increasing volume of work.

“As your law firm gets larger and busier, it’s important that you leverage your systems to keep you and your team working as efficiently as possible. Remember that missing a deadline is the number one cause of legal malpractice claims.”

–Jason Schneider

You can do the following to ensure that your law firm is prepared for sustainable growth:

  • Hiring Strategies: Develop strategies to hire the best employees for your law firm, and build robust onboarding and training processes. Remember that having an efficient case management system can help improve the efficiency (and happiness) of your staff.
  • Financial Planning: Create financial projections to anticipate your future growth and identity potential challenges ahead of time. You might also want to work with a tax advisor to make sure you’re benefiting from tax credits and deductions.
  • Referral Cases: If you’re dealing with case overload, then you might want to start referring cases that you don’t have the bandwidth or expertise to handle. Don’t sink a case (or your professional reputation) by offering low-quality service that won’t secure the best possible outcome for your client. In the same way that you used referral cases to grow your law firm, you can also use referral cases to manage your growth.

“Get help with your larger cases. Or, if you have too many cases that you can’t handle yourself, don’t be pennywise and pound-foolish because you don’t want to share fees. Your law firm’s reputation can be damaged if you don’t achieve strong case results, so you want to do everything possible to make sure your clients are well-positioned to succeed.”

–Jason Schneider

Final Thoughts

To start a law firm, you need to be something of a hustler, and enjoy the business aspects of the legal industry that lie outside of your principal duties as an attorney—or you need to hire or partner with someone who can manage those aspects of the law firm.

There’s so much work involved in starting a law firm, and the business components can consume so much of your time. You won’t be very happy if you hate things like networking, financial planning, or case management.

However, if you follow the guidelines we’ve discussed in this blog, then you can make the process of starting a law firm much more streamlined and organized, which will keep you focused on handling your casework and legal tasks.

Remember:

  • Establish your identity and create a thorough business plan
  • Create an efficient process for managing your cases
  • Develop a plan for acquiring your first clients
  • Prepare your law firm for sustainable growth

For attorneys with an entrepreneurial mindset, starting a law firm can be a rewarding experience. Happy hustling, and best of luck in the legal world.

The Schneider Williamson Team

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Schneider Williamson

Schneider Williamson attorneys have a proven track record of results that includes securing six, seven, and eight-figure compensation for clients. Right your wrongs and pursue compensation with Atlanta’s preferred personal injury team.

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