Practicing law is a profession as well as a business.
However, most solo practitioners limit themselves to treating it as a profession. A successful law firm owner is able to see them both. Of course, you can have a thriving career as a lawyer with solid legal knowledge. But it takes more skills to start a law firm than just practicing law.
All of a sudden, you’ll be flooded with a lot more to do than investigating and negotiating.
You’ll have to handle business responsibilities including tasks like accounting, budgeting, hiring, and marketing. And if you’re not prepared for it, you’ll end up compromising your quality of work.
Remember, a compromise in your quality of work means a compromise in justice. You can’t be struggling to figure out how to establish your law firm while handling cases. It can lead to devastating consequences for your client.
But if you make the right moves, you’re going to enjoy the most rewarding experience of your life. You’ll be able to deliver justice to a lot more people in need. You’ll be more than just a lawyer by getting the opportunity to choose your clients, build your team and culture.
Whether your motivation is better work-life balance, financial freedom, or flexibility, it’s time to start thinking like a business owner. If you’re prepared to start your own law firm, you need more than a few tips and tricks. You need the guidance of someone who practices what he preaches – a lawyer turned law firm owner who can guide you through every step of this transition.
Darryl Isaacs founded Isaacs & Isaacs in 1993. He combined his marketing skills and his passion for helping others over the next 30 years to make the firm a well-known and beloved brand in Kentucky, Indiana, and Ohio.
With 60,000 clients and over $2 billion in recovery, Isaacs turned a dream into an empire. Now, Darryl is devoting the same skills and passion to guiding and empowering lawyers to start their own law firms through the Brain Trust Legal Group (BLG).
So are you firm about your motivation to start a law firm? Want to know how to make millions as a lawyer? Want to know the essential steps to start and grow your law firm? If you’re nodding your head, you’ve come to the right place to get ahead!
In this guide, we’ll share everything you need to start a law firm and give you a million-dollar formula to grow and sustain it. You’ll learn how to:
It’s essential to take it slow and go step-by-step to give your law firm the direction it needs. Every law firm needs to hit each of these milestones to stay on the highway to success.
You’ll only find the highway to success if you’re driving in the right direction. Your business plan is the roadmap to give you a clear vision of where you want to take your law firm.
Don’t worry! It’s a lot easier than drafting a complicated legal document. Even a one-page business plan is enough to pin down your law firm's vision accurately.
So what do you need to write in your business plan? You must pen down why you want to start a law firm, what are your top goals, services, budget constraints, and strategy to attract and support clients. In simple words, you’re summarizing what you want your law firm to achieve and sharing a basic strategy to run it.
Think about your goals, ideal clients, and how would you define success for your law firm. Don’t worry! You’re not drafting a new law. These are guidelines to get you started, which will keep evolving as your business evolves to a different stage. However, it’s essential to put some thought into it because you’re setting up the fundamentals of your business practices.
Here are the essential steps you need to take to develop a business plan for your law firm:
A well-planned budget can keep your whole firm running smoothly throughout the year. It sets clear expectations for your annual cash flow and expenses. On the other hand, one financial hiccup can rattle the trust of your team and disrupt operations.
You need to create a realistic start-up budget, estimate your cash flow, and your monthly projections. You can set benchmarks to understand if you’re achieving your financial targets and keep revising them as your business evolves. There may be some months where you get more cases than the rest of the year. So plan your budget in a way that allows you to plan with the bigger picture in mind. You’ll also be able to allocate funds to cover expenses such as:
Here are three key steps to plan your law firm budget:
According to a popular report, the median hourly rate for lawyers across the country was $261. However, you can’t just copy-paste this rate for your legal services. There are law firms that can charge a lot lesser or a lot more than that.
You need to think about a lot more factors before fixing the right pricing strategy for your law firm, such as:
You can choose multiple pricing strategies to suit your needs. Cost-first pricing focuses on covering the costs of your legal services before reaching an outcome. Competition-first models are based on providing a more attractive rate than your competitors.
However, one of the most effective pricing strategies is to keep it flexible and base it on the value your services create for your client. This is called a value-first pricing strategy.
In many cases, clients have a strong case in their hands, but just can’t afford the legal costs to get justice. You can offer a contingency fee to take care of this issue and win the confidence of your client early on.
Some of the other strategies include retainers, sliding scale, and subscription pricing models.
Whether you charge a flat fee, contingency fee, or an hourly rate, it needs to be in alignment with your business expenses and the client’s interests. Low rates might work for a while, but reasonable rates are more sustainable in the long run.
It’s easy to connect with a client on a one-on-one basis. Bringing personality to your brand and turning it into a name that inspires trust, knowledge, and success is a whole other game. But this is where the fun begins. This is where you begin your journey as a proud owner of a law firm by naming it and designing a logo for it.
Your firm name and logo make up your brand's first impression. It plays an important role in how people connect with you and feel inspired to find out more about you.
You already know there’s going to be some important legal work to take care of while launching your law firm.
Here are some federal law naming guidelines that most popular law firms abide by:
Is your personal name enough to do the trick? It depends. Do you have decades of personal credibility and reputation? It could work if that’s the case. But even then, you want to open up a law firm because you want to be more than a big fish in a small pond. You’re trying to reach out to a wider base of clients who know nothing about you.
And that’s why it’s best to include the value you provide in the brand name itself. For example – you can add “Counsel for Personal Injury Victims” or “Bad Faith Insurance Attorneys” in your firm name. This simple trick can become your law firm’s unique selling proposition (USP) that guides your branding and marketing decisions.
As important as it is to embrace a value-first branding approach, it’s equally important to understand that human beings find stimulating visuals just as engaging. Your logo and name are interconnected in terms of their purpose. It will appear on your website, business cards, social media, and emails. So you need to put some thought into your logo before finalizing it.
Here are some factors you should consider while developing your logo:
You can develop a logo on Canva or Adobe Photoshop without shelling out much if you know exactly what you’re looking for. However, hiring a professional designer to understand your brand and customize the perfect logo can be really helpful too. You’ll be able to pick the best out of multiple logo options and iterations.
Importance of It’s time to start structuring the foundation for your law firm. It’ll help firmly establish how your firm will deal with liability and taxation. You can only accomplish this by selecting the appropriate legal entity for your law firm.
Here are the four key legal structures you can choose from:
It’s important to go through your jurisdiction guidelines before forming your legal entity. Certain states may have unique qualifications and obligations for law firm owners.
It’s time to make your legal experience shine and bring organization to your organization. Map out your internal systems and workflows to create a clear-cut process for handling work. They will cater to the way you want to work and help you deliver consistent, high-quality work.
You should reflect on the pros and cons of your tried-and-tested workflows. Choose the ones that truly optimized your performance and can easily be followed by your whole team. These systems will ensure every team member has their work cut out for them clearly and eliminate micromanagement.
Think about where you want to work, what your working hours will be, and how do you want to handle client communications. Your workflows will vary based on your practice area.
Here are a few external client processes that you must consider for improving onboarding, billing, and communication:
Here are a few internal client processes to build that will help you improve productivity:
You’re laying the foundation for a highly productive law firm with these processes and workflows. Firms that use the necessary tools to streamline their workflows enjoy better caseloads and better payments while wasting lesser time. You can enhance productivity by up to 21% over firms that don’t take the initiative to use tools.
Your clients always going to be your biggest asset. They play the biggest role in realizing your revenue dreams and building your brand reputation.
You need to build systems to monitor and manage your client relationships to keep them healthy. And that can only happen when you can make your client feel valued and support every step of their journey.
Your focus should be on building systems that create long-term relationships, not just attracting new clients. And the only secret to client retention is healthy attention.
How do you do that? By designing an optimal client onboarding process, and by using consistent and clear messaging to build trust and credibility.
Here are the essential measures you need to take to improve your client management:
Did you know that many lawyers spend up to 69% of their time working on tasks that have nothing to do with their core skills? They’re stuck with client onboarding and invoicing tasks that cannot be billed. Hiring more people lawyers no sense if you don’t give them the right tools to automate and fast-track all menial tasks.
You don’t need gimmick AI tools or expensive software suites to solve them. Your goal should be to embrace technology that fits into your workflow rather than forcing the workflow around it. It’s about learning to work smarter, not harder. Most of your daily operations like expense tracking, calendar management, billing, and invoicing can easily be automated.
Here are some of the biggest productivity benefits you can get by leveraging the right technology for your law firm:
· Providing instant access to your case files
· Managing your day-to-day workflows
· Sorting out your client data
· Simplifying communication with clients
· Tracking your finances
· Automating menial tasks
9 out of 10 lawyers have already implemented tools to help optimize one or more of these tasks. They have helped free themselves from the burden of mundane tasks and focus on what they love doing. Naturally, their case volumes have increased without any compromise in the quality of service they provide.
Here are eight highly popular productivity tools you can implement for your law firm and get instant results:
95% of people seeking legal advice start out looking for it with a simple Google search. The days of solely relying on word of mouth to get clients are over. You need to make your brand presence known where the people are looking for solutions.
If you’re in tune with your client’s evolving needs, you’ll be able to build a client-centered law firm that never misses the mark.
A good law marketing strategy will help your clients understand the true value of your services and inspire an urgency to take action.
Here are three crucial factors to consider while coming up with your law firm’s marketing strategy:
There are dozens of points of contact through which someone can get in touch with your brand. You can’t just limit yourself to one of them. At the same time, you can’t expect to spread your marketing budget across all channels and make an impact. It’s important to understand where most of your leads come from and which channels they use most often.
Here are some of the most widely used marketing channels for law firms:
Search engine optimization (SEO) – It’s the first instinct for most people who are urgently looking for legal advice to turn to Google. Between 70-90 percent of clicks come from the first page of Google results. However, getting your website links to the first page organically takes skill and patience. You need to identify the right keywords, generate backlinks, and update content that people are looking for.
Designing your website – 75% of website visitors are prepared to take action after clicking your page. Your website design and content will need to give them enough reason to keep exploring. Choose a website design that’s user-friendly and optimized for smartphones. Every page should ideally load within five seconds. Keep the right balance of text, colors, and images to reel them in. The page they land on should prominently feature your key services, case studies, testimonials, and clear calls to actions (CTAs). These prominent buttons or links should directly lead them to share their contact information, basic case details, and set up meetings with your team.
Content marketing – Search engine algorithms are programmed to reward websites that create content consistently. You’ll be able to deliver content that your target audience is actively seeking. It’ll also make your web pages rank higher for new keywords. You can choose to publish e-books, blogs, podcasts, videos, memes, or any other form of media that excites people.
Testimonials – Testimonials are nothing but digital word-of-mouth marketing in action. New customers usually prefer to take the word of other customers before yours. One referral can save you a lot of time and money spent acquiring new leads. And one great review can keep many more new leads flowing through your doors. You must encourage clients to share their reviews on Google, Facebook, and your website and prominently feature them.
Social media marketing – LinkedIn, Facebook, Instagram, and TikTok are some of the most popular channels for social media marketing. You can use them to share relevant legal content, connect with clients, or network with other lawyers.
Pay-per-click (PPC) Advertising – Getting your website pages to rank in the top 10-20 search results organically may take weeks or months. You can reinforce your search engine presence through a paid Google Ads campaign. You can create landing pages for your local area of practice that will be displayed to your target audience. So when they search for your selected keyword, your PPC ad will pop up above the search results. Although it’s one of the more expensive forms of marketing, it also leads to consistent conversions.
Email marketing – Getting your client’s email is one of the most high-value pieces of information you can collect from your client. That’s why many websites simply ask for your email rather than your name. You can give your subscriber a cool incentive like a free e-book or a free case review in exchange for this information. It’s worth the effort. You can gain over $35 for every dollar you invest in email marketing. Don’t keep spamming them once you get their email though. Use drip marketing campaigns to slowly deliver valuable resources that organically guide them to engage more with your content.
It takes keen leadership skills to run a law firm because of how many people you’ll have to bring in to create a reliable support system. You can use technology to bypass boring tasks, but there’s no substitute for human resourcefulness when it comes to networking. The stronger your network is, the faster your business prospers.
Finding a community of peers is important, but easy to pull off once you commit to a sharing and growing mindset. Small business associations and social media platforms can help connect with others
Here are a few community hotspots to network with other legal professionals:
There’s a lot of work that goes into building a case that shouldn’t be dumped on the desk of your team of lawyers. You must hire the necessary staff to support their work and free them from tasks that aren’t part of their core skill sets.
You can hire part-time or full-time legal assistants to take care of various research and administrative tasks. They can also take over the responsibilities of fixing appointments, managing contracts, and overlooking accounting work. We recommend hiring legal assistants who are familiar with your jurisdiction’s regulations for lawyers.
Businesses can only thrive in the long run when every employee believes in the same vision. You need more shared values than the size of a paycheck to achieve this. Many lawyers take the initiative to start their own law firm because of how burnt out they felt working in other firms. Before becoming a boss, consider this – “Would I want to work for a boss like me?”
As a law firm owner, you’ll be responsible for setting the core values of your company. And your company culture will be built around these values. A positive company culture with strong values is crucial for employee happiness and success. You need to create an atmosphere that makes people take ownership of your firm’s success along with you.
But what does law firm culture include?
It is a set of guidelines and policies that cover factors such as:
Here are the founding pillars you need to set up to build a strong company culture:
It’s good to be self-driven for figuring out solutions for your business, but sometimes all you need is a professional problem-solver. Hiring a legal consultant can save you a lot of time and money.
Let’s say your career specialty is handling auto accident injury cases. However, you also want to branch out to include workplace compensation, bad faith insurance, taxation, and other new practice areas.
Legal consultants who specialize in those areas of practice can help you set up that part of the business smoothly. They’ll use their knowledge and networking strength to headhunt the attorneys you need to build those practice areas.
Most consultants charge a flat fee or an hourly rate for their work. You can also retain their services for longer if you’ll need their insights regularly.
Law is a field that demands you to remain a student for your whole career if you want to keep climbing the success ladder. Ongoing training programs are important for staying up-to-date with changes to the law and reviewing new case precedents.
A 2009 study revealed that law firm employees who went through high-quality training programs generate more than twice the revenue of employees who don’t go through any further training.
Investing in your team’s legal skills will help them work more strategically. They’ll be able to get more value by working lesser hours.
It’s easy to group your team members and enroll them into a training program if they’re in the same area of practice. However, you’ll have to pick unique programs for employees with different backgrounds. Every program needs to be personalized and highly skill-specific. 75 percent of knowledge that isn’t applied within six days after learning it is forgotten.
So if your employees are not going to practically implement the knowledge they’re learning, it’s not a fruitful investment.
Here are a few different types of training systems you can consider for your law firm:
You need to make your employees feel invested in their own growth before investing in it. Have an in-depth discussion with each employee about their strengths, weaknesses, what skill they want to develop, and what is their preferable learning style. Some people are visual learners while others are listeners. Some people prefer intensive in-person training while others enjoy doing it virtually at their own pace. You can use these answers to choose the perfect training program for them.
It's also important to write down specific goals for your training program. Are you doing it to improve your work-life balance? Are you doing it to generate more leads? Do you want to get more productive by leveraging the latest legal tech?
Setting clear goals will allow you to measure your progress over the next few months.
You can also initiate a follow-up plan to check in with each member after completing their training. You can review what they learned with the rest of the team members if necessary. This way you’ll be able to create a peer group that keeps passing on the insights they learned to your law firm. They can write a summary that can be updated to your learning center. You’ll also get first-hand accounts of how effective your training investment was.
As a law firm owner, you’ll be surprised at how many other responsibilities you’ll have to handle apart from your legal work.
Here are some essential business responsibilities to keep your business running like a well-oiled machine:
A business plan is a roadmap for your law firm that ensures you’re heading in the right direction. It gives a shared vision of success to every member of your firm.
You’re essentially summarizing your business expectations and the strategy to run it.
Here’s what you need to clearly lay out in your law firm’s business plan:
Here are the first few crucial steps you’ll have to take for starting your law firm:
You should only settle your pricing strategy after carefully evaluating a lot of factors such as:
You don’t have to lock down a fixed pricing model for all your cases. You can choose between charging a flat fee, hourly rate, contingency fee, retainer, sliding scale, or subscription pricing model.
It should be a comfortable middle ground for you and the clients. So it’s important to spend enough time understanding your client’s financial constraints too before taking their case.
Your brand identity is going to be your first impression on every channel.
Here are some guidelines to help you create a strong and memorable brand identity:
You can choose from four key legal structures for your law firm:
Your law firm’s internal systems and workflows are responsible for running your firm’s day-to-day operations smoothly. They help you easily distribute workload among your teammates and track progress.
They also help you establish clear communication and work standards so that your whole team is on the same page. You’ll be able to cut out micromanagement and maximize productivity if you design them well.
Your workflows will vary based on your practice area, working hours, and client communication needs. They will be tailored to the way you prefer to work and help you provide consistent, high-quality services.
Think about the pros and cons of the workflows you’ve already tested while working in previous law firms or independently. Take the ones that proved their success already, which can easily be followed by the rest of your team members.
Here are a few questions to consider before you optimize your workflows:
Most lawyers waste 69% of their time handling mundane administrative tasks instead of focusing on what they love doing. You can’t be too productive if you’re shuffling back and forth between client onboarding and invoicing work. However, you don’t need to hire too many extra workers to fill in these gaps and free them from this burden.
What you need is the right technology to take over these tasks and fast-track your workflows. Did you know you could easily automate most of these tasks with just a handful of platforms?
Here are the top benefits you’ll be able to enjoy by embracing the right tools to empower your law firm:
· Easy accessibility to your case documentation
· Streamlining daily workflows
· Securely storing and retrieving your client data
· Making communication with clients easier
· Tracking your budget and revenue
· Automating mundane tasks
You need to adopt client-centric marketing strategies based on their interaction and content preferences.
A good strategy will make your target audience instantly connect with the value you offer and urge them to take the next step. Whatever marketing strategy you choose, you must know your target audience, set clear and measurable goals, and plan your marketing budget.
You must identify the channels where your target audience is most active and focus on attracting more leads through them.
Here are some popular marketing strategies that you can test out:
You don’t need a high-stress environment to produce high-quality work. It takes a shared vision and a feeling of shared ownership in your team to create a business that thrives in the long-run. A healthy and stress-free company culture is essential to save your team members from getting burnt out and dropping out.
Law firm owners are responsible for laying the foundation of the company culture. A positive company culture with strong values will naturally lead to a happy team driving your success. You need to carefully craft your firm’s mission statement, communication standards, decision making protocol, work-life balance expectations, training programs, and social networking events.
Running a law firm becomes more feasible when you properly plan out how to handle the expanded volume and variety of cases. Don’t waste your precious hours trying to play jack-of-all-trades.
Hiring a legal consultant can help you save a lot of time and money when you’re planning to include new practice areas. Their specialized knowledge and networking power will help you fast-track the whole process.
Law is a dynamic profession. It’s not unusual to see federal and state laws being constantly challenged and updated. If you’re not keeping up with the changes in your practice area, you’re letting your career slip into stagnation.
A successful firm needs to invest in their team’s legal skills to work more effectively. That’s why promoting ongoing training programs are essential for upgrading your team’s legal knowledge and skills.
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