It’s not uncommon for lawyers to decide they want a change. Maybe you are at a bigger firm and want to be a part of something smaller; it’s not atypical to find lawyers getting burned out from the 2,000 annual billable hour expectation and desiring a better work-life balance.
Some lawyers find themselves feeling the entrepreneurial itch along with being unhappy with their current circumstance so they decide to “hang up their own shingle.”
Whatever your reason for leaving your current law firm, there is no denying how difficult law firm transitions can be.
To help set you up for success, we offer some best practices for hanging up your own shingle as a lawyer so your new firm will be set up for success from the start.
Define the “Why” You are Starting Your Own Firm
Too many lawyers are running away from the challenges in their current circumstances and not truly running into a new firm start-up because they want to be a business owner.
It often seems like an easier solution for lawyers to start their own firms when all they really want is something different than their current circumstances.
It’s possible that you really want a smaller firm environment or a law firm with a better work-life balance culture. You might also be looking for a more collaborative legal environment than your current firm.
Defining “why” you are wanting to make a change will help you better identify what you are truly looking for. If you determine that you want to try your hand at entrepreneurship, then use some of the below best practices to help your firm get off to the best start possible.
Plan, Plan, Plan before Launch
Setting up your entity and getting your clients to come with you is simply not enough for the short and long-term success of a new law firm.
There are many administrative, marketing, financial and client considerations that go into a new firm’s launching success. Many state bar associations have a checklist for starting up your own firm. These checklists are a great start, but they really don’t accommodate for the nuances that often come along with different practice areas and circumstances.
The plans you will need are the following in order to set your law firm up with a good foundation:
Businesses utilizing a strategic plan are 12% more profitable and of failed start-ups, 67% had no formal strategic plan.
Who are your ideal clients? How will you get your brand and name in front of your target customers? What will it take to implement your marketing plan and who will be doing this implementation?
Will you be starting by yourself and will you need any other support?
What are your financial goals? What is your drafted budget for the year? How will you invest in your law firm over the next few years? What does your CPA have to say about your owner income and how you should be maximizing tax incentives?
Administrative & Technology Plan
How will clients be served at your firm? What software will you need before you can be serving your clients effectively? What forms need to already be drafted and ready for your new law firm launch? How do you protect client information and ensure you and/or your team has all of the tools you will need to be successful?
By creating a detailed project plan for the start-up of a new law firm, including items such as entity name, ownership structure, banking choices, timing of client communications, technology configurations and more, you can ensure that you don’t get met with as many unwelcome surprises after you have launched.
In addition to defining tasks, it’s important to assign responsibility and deadlines for those tasks so you can launch on-time and on-budget.
See our complimentary firm launch & transition spreadsheet for a detailed project plan created by Legal Back Office to assist in your new law firm start-up planning.
Leadership and Administration of the Project Plan is a Must
Defining who is responsible for leading the new law firm start up project and who is accountable for executing the plan is also critical to ensuring the success of a new firm.
Law firm transitions can be very costly in administrative time and mental capacity. Having a leader and project manager who is not directly responsible for client-related work can ensure you are focused on billing/revenue generation and client services.
If you as the lead lawyer are distracted on the new firm launch, you won’t be setting the new firm up for success with a backlog of work, unhappy clients and dwindling revenue.
Trust an outsourced law firm consultant like Legal Back Office who has already managed these new law firm start-ups successfully.
The cost of outsourcing this type of project is typically far less than the lost revenue and cost of administration managing these projects internally.
Outsourcing Law Firm Transitions Can Ensure Your Merged Firm Stays Productive
Partnering with a consultant like Legal Back Office can actually prove to cost far less than you gain by having them partner with you on your new law firm start-up.
A consultant that has in-depth industry experience and outsourced administrative capacity will give you the peace-of-mind that your newly formed law firm is in good hands.
LBO can partner with you on your strategic planning, marketing plan and financial strategy, as well as fully manage your branding/logo creation, website development, entity structure options, financial modeling and budgeting, technology implementation for the new firm and much more.
In addition, they can fully manage the client choice letters being sent to clients, which ones are returned and navigate getting your client files from your former firm to the new firm.
If you think you might want to hang up your own shingle and start your own firm but simply don’t know where to start or don’t want to manage the transition yourself, contact LBO today to schedule a consult and explore how we can assist.