How to Start Your Own
The Simon Law Firm, PC
Should I Open a Law Firm?
- Where will you get clients from?
- Are you experienced enough to properly serve them?
- Fill out a financial plan and figure out how much it will cost you to a) get started and b) operate monthly (your “nut”)
- Courtesy of the ABA
- What are you going to bill an hour? How many hours must you bill to be able to meet the monthly nut? How many months can you last on just that. What is your burn rate? What will it take to become profitable?
- Here is a more detailed budget: http://www.practicepro.ca/practice/PDF/SampleBudgetSpreadsheet.pdf
Can you make it work? If yes, proceed.
Form a Corporation
I suggest you go for a Professional S Corporation unless you are joining up with another lawyer and then go with the LLC.
- Just go to the Secretary of State website and open an account.
- Reserve your company name. Be sure to read the Bar Rules on naming your firm.
- The SOS will approve the name and then you just follow the on screen instructions. It’s very easy.
- File with the Fed for an EIN. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online
- File with the State for a taxpayer ID number: https://georgia.gov/popular-topic/applying-state-taxpayer-identification-number
- Congratulations, you are legal.
Macs are cute but you are going to run into software headaches if you insist on them. Get a Lenovo touch screen Yoga laptop if you can afford it. Quick bootup, touchscreen. Good battery life. $1,000.
Buy it, it’s cheap, wireless and reliably does everything you need.
Brother® Wireless Laser All-In-One Printer, Scanner, Copier, Fax, MFCL2700DW
First year is cheap and it escalates every year for five years and then plateaus. I have 3 lawyers, $1,000,000 in coverage and a $10,000 deductible for just under $7,000. Do not be afraid to shop around. It is cheap in year one. First read this article: http://www.americanbar.org/content/dam/aba/administrative/lawyers_professional_liability/insurance.authcheckdam.pdf
Mainstreet Lawyers Insurance
Small Firm Contact (1-34 attorneys)
125 Broad St.
New York, NY 10004
- Auto: Make sure your car insurance policy will cover you if you are driving for work. Call them and ask. Pretty easy to add your company as an insured.
- Workers Comp Insurance and other business insurance.
Victor M. Hamby, CIC
Hamby & Aloisio, Inc.
53 Perimeter Center East
Atlanta, GA 30346
If you are a true solo, a cell phone or two will do the trick. Much cheaper than a land line. It also lets you write off your cell phone bill. If you want to build correctly from the start and don’t mind a small cost, the best option is RingCentral. For $40.00 per month, per line and a $250.00 charge for the ownership of the fancy phone, you will have an expandable, professional phone system that can forward calls, choose relaxing elevator music or a promo for your own firm etc. It grows with you and some models run on wifi! Think how happy the folks at Starbucks will be with your “office” fully established in their store. The key thing to do is test the internet connection of the place where you will be working so there is no voice chop.
Go with the $299 package and be sure to upload examples of what you want to give them guidance.
There is almost no way your website is going to capture business for you in year one unless; 1) you live in east bumble, 2) you are willing to spend $50,000 a year. So, what you want to do in year one is build a foundation to grow on and make sure your website is findable as a verifier of credibility for someone who has already located you and is considering your services.
is the bomb. It’s $99 dollars a year and you can register your own domain name. Get a .com, don’t be unprofessional. There are tons of free online training courses on how to use WordPress and it is very easy to learn. In year one, you can have an attractive, functional site that will read well with Google.
If you just don’t want to do it yourself, then expect to pay $4500.00 for site design and around $4500 a year thereafter.
and would suggest you give them a hard look if that is your price point. You can spend more and get a fancier product, but remember the goal here is getting started with a foundation you can grow with.
Do you need to have one? Not really. Do you need a place to get mail, meet clients and take depositions; eventually yes. There are a number of emerging options including Regus office suites. regus.com Windowless units run around $800 a month including one wifi user. Windows will cost over $1,200 a month in most places. The kicker is renting the conference room is around $70.00 an hour and expanding with staff is expensive. The plus side is there is a receptionist, it’s always clean and professional and you have your mail handled pretty well.
Another option is based on the hive office concept.
has two locations in Atlanta; Ponce City Market and in Midtown. Offices start at around $950 a month, with no long term commitment.
Finally there is the classic sublease with other lawyers. This one tends to cost more in rent but it can be the most beneficial for three reasons:
- You have a vast human library to bounce legal questions off of an someone else’s paralegal to ask how efile works.
- You may get cases from the more senior lawyers in the office.
- Having other lawyers around is generally good for your morale.
Don’t be cheap. Get an answering service that will professionally answer the phone every time, 5 days a week. When you grow, you can adjust the system. Ruby is the best I have found.
You must have 5 basic systems to operate as a lawyer these days.
You should run your firm’s email through Google apps. It runs it from your domain name, is infinitely expandable and cheap and includes document storage on Google Drive.
Either teach yourself to work for free on Google Docs or get a Microsoft Office 365 subscription.
Case Management Software
What gets measured gets managed.
The decision here is largely based on what kind of practice you will be running.
$65-72 dollars a month subscription, in the cloud.
For Personal Injury and Workers Compensation Only
$79 per month per user. In the cloud and integrated with Google or Outlook. Based on Salesforce.
Also look at:
Westlaw is great, but it is expensive as hell. Learn to use Fastcase. It comes free with your bar membership. Logon at the Georgia Bar website.
Scan everything. Shred everything but pleadings and medical records or evidence. Buy this: http://www.fujitsu.com/us/products/computing/peripheral/scanners/scansnap/ix500/
Banking and a Line of Credit
Go sit down with a private banker that has experience working with law firms. Suntrust has a special division. I chose to work with Brand Bank.
They will help you set up:
- Your IOLTA trust account
- Your check scanner
- A system for accepting credit cards. Consider Square.
Unless you are wealthy or have saved up, it’s smart to get a line of credit to get started. I got a $25,000 line with Brand Bank at 7%. You may never need it, but it helps you sleep at night. Big banks offer services to lawyers, but I like the personal touch of having a banker on call. All checks get scanned in. I have not gone to the bank once in 6 years.
Accounting and Bookkeeping
Get Quickbooks and find a reliable bookkeeper. You have to pay quarterly taxes. In year one, it is hard to guess so unless you will kill it out of the gate, accept that you will pay some late fees. Payroll is a whole other bag of problems so let’s assume you have not employees. Once you get them, see if the bookkeeper can handle payroll. I hate payroll and taxes as I have paid many a penalty over the years.
What Will Your Practice Look Like?
What you don’t do determines what you can do.
Get very good at saying “no.”
Apply the Pareto Principal to ever case you look at it. 80% of your profit will come from 20% of your cases. Focus on those cases and clients. Every six months, take note of the worst 20% of your cases from the perspective of profit versus time and consider headache factors. Then consider never taking that kind of client again. As your practice grows, you can be choosier. Act on it.
The Practice of Law
If you are going to be a civil litigator, you have to know the Civil Practice Act backwards and forwards. You must understand what makes a case vulnerable to Motions for Summary Judgment. You should attend as many Motions calendars as you can; they are free.
Read appellate opinions and buy old copies of Hornbooks on Amazon if you cannot afford the new ones.
The only way to be a great lawyer is to simply prepare better than everyone else. Start a hornbook of your own where you write down cases or principles that you think are important.
Finally, be honest to a fault and put the deserving clients first. Get burned and do not burn people. It will pay off in the end. I have watched many an aggressive lawyer flame out as their peers learn their nature. It’s the only way to practice.
The Business of Law
This is a day by itself, so read these books and then we can talk.
The 4-Hour Workweek by Timothy Ferris
The 7 Habits of Highly Effective People by Stephen R. Covey
How to Win Friends and Influence People by Dale Carnegie
No B.S. Ruthless Management of People & Profits by Dan Kennedy
No B.S. Time Management for Entrepreneurs by Dan Kennedy
This is a good visual mindmap of some of the considerations: https://www.mindmeister.com/12497642/starting-a-law-firm