Starting your own law firm
By Bill Hebert
President, State Bar of California
I’ve worked at big firms and small firms and in the public sector. My wife will tell you I have always been happiest when I’ve felt in charge and on my own. Almost every lawyer has dreamed of starting his own law firm and running it the way he wants: the way he’d treat his clients, his partners, his employees and himself. So many of us have that vision of sitting back in an office chair, surveying our surroundings and feeling really good about what we’ve accomplished.
You can do it. You can start your own firm. You can leave a big law firm, you can leave public entity practice, or you can start your firm straight out of law school. Just don’t expect it to be pretty, and don’t expect it to be easy or anxiety-free.
The reality is a little grungier than the vision. I have worked at large, international law firms that I have loved and admired, and I have started or joined small firms. In my current law firm, we come from large international firms, large corporations, small firms, public entities and solo practices. Each of my partners has given up some security and taken some chances to make a go of it at a small firm. We think it’s worth it. But you need to be prepared if you’re going to take that step. Think carefully about why you want to take that step, how to prepare and what is in store for you if you do.
FREEDOM
The reason most of us start or join a small law firm is freedom – the right to say “yes” when we feel the urge, or “no” when we are just fed up. For some of us, freedom means that we get to set our own hours, because we have kids or an aged parent for whom we are caring. Freedom might mean more time with a spouse or partner. It might mean the gift to say to someone else, “My judgment is as good or better than yours, and there is nothing in this universe that requires me to listen to you – you, who are an idiot.” We’ve all felt it and now I’ve said it. That’s the freedom a lot of us seek when we start a small firm or solo practice.
POTENTIAL AND POSSIBILITIES
The point of starting a small firm or solo practice is that you will realize your potential and possibilities. No one will steal your thunder. If you do a great job, you will get the credit. If a client hires you, they are hiring you, not some law firm. You have the potential to do great things and truly help people: trying cases, structuring deals, helping start-ups get off the ground, developing an international practice, advising the elderly on their final days and plans for their families, taking part in politics, assisting debtors to keep their homes, and the many things that we all do as lawyers every day. We are the trusted advisors to our clients. We owe them 100 percent of our time and attention, which is like the spoonful of sugar in the movie: it helps the medicine go down. If we feel like we are helping our clients, the extra work and hours at night and on the weekends don’t have the same bitter taste as when someone else is telling us to do it.
BUSINESS PLANS
Now it gets a little grungy. You need to generate revenue. Fact: the revenues must exceed your costs if you expect to pay your rent or mortgage. If you are going to start your own small or solo firm, you need to figure out where to get the money to make it through the first few months or years. Can you work as a contract lawyer part time while you try to develop your own clients? Do you have a few paying clients who will cover your overhead and costs? Do you have support from a spouse or partner who sees the upside in starting your own firm and will suffer through the early days of deprivation for the eventual pay-off? Do you have contacts in the legal and business communities, or elsewhere, who will send you work?
If you are typical of most lawyers, be prepared for a shock: the relentless assault on your psyche as you work to build your practice. As a rule, we lawyers are not good at marketing and generating business. We are not salesmen. Think about the time you were on a plane and the person next to you started a conversation and was clearly a salesperson. Before long, she had asked enough questions to know many things about you, and told you about her own work. How did that make you feel? Relaxed? Engaged? Interested? Anticipating the opportunities? Or did you feel withdrawn? Anxious? Threatened? Nervous? If you felt anxious or nervous, you are a typical lawyer. These personal interactions make us uncomfortable. Studies show that on personality scales, lawyers tend to be far less social than the regular public, and far, far less social than the typical salesperson.
A lawyer who seeks to start her own firm and to build her own practice might need to change her personality, or make her personality situation-specific. Based upon experience, I can tell you that it is a personality-altering experience. You make a relentless effort to keep in touch with people who might send you business. You strike up airplane conversations. You call people to have lunch. You try to connect one friend to another. It isn’t enough to start a web page, sign up on LinkedIn or get a Facebook account, and then sit back and wait for the clients to come in the door. Keeping a law firm going requires personal contact at lunches and dinners, at bar meetings, by e-mail and by phone.
Starting a firm, and keeping it going, requires constant devotion, like keeping an orchid in bloom. There is nothing wrong with this attention, particularly if the alternative is facing the fact that you can’t feed your family or pay your rent. You need to generate revenue – by convincing people to place their trust and confidence in you. And you can only do that if you meet people and push them to give you a chance to be their lawyer.
TECHNOLOGY
With the help of technology, you can start a practice that makes you look local, international, professional or homespun. You can work from an office building or from home and no one really cares. They just want to be able to connect with you, day or night, and to get good advice they can trust for a price they can justify. Technology makes it easy.
PROTECT YOURSELF
“Hope for the best, prepare for the worst.” Don’t take an avoidable risk that could destroy your life for years to come. By that I mean that you should take the advice you would give any one of your clients: pick the right form of business entity to maximize the protection of your personal assets, be it limited liability partnership, general partnership or professional corporation, and form the business right away. Buy malpractice insurance. Buy malpractice insurance. Buy malpractice insurance. Adopt internal policies and office procedures that are consistent with good law practice management.
The freedom to start your own law firm bears its own chains. If you have the motivation, the financial wherewithal and the ability to focus clearly on the benefits and risks of starting your own firm, the upside of freedom is worth it.
Resources:
The California Guide to Opening and Managing a Law Office, $99, includes advice from lawyers and others on everything from making the decision to open a law office and creating a business plan to customer service, cash management and quality of life.
The Solo & Small Firm Section, organized in 1987, provides a forum for solo practitioners, both specialists and those with a general practice, and for all other attorneys with a general practice.
The Law Practice Management and Technology Section is devoted to the practical aspects of starting and growing a law practice and running it efficiently with information on such issues as administration, financial management, legal ethics and time management.
Presentation by Jim Quadra, managing partner at Calvo Fisher & Jacob’s San Francisco office, on “How to Build a Successful Smaller Law Firm” for the Recorder Roundtable.