2 Key Questions for Law Firm Startups in 2021
How big do I want my practice to be, and do I have a business plan to get me there?
Those are two essential questions if you’re thinking of starting your own firm.
“At some point, you have to decide what is the biggest you want the firm to be,” says solo lawyer and legal writer Megan Zavieh in this ABA Journal article. “The more specific, the better. Your goal informs decisions like when (or whether) to hire other lawyers, when to turn down work, whether to expand geographically or into new practice areas, and other critical questions.”
When it comes to a business plan, start with your vision.
“Are you creating an enterprise or a lifestyle business?” suggests Billie Tarascio of Modern Law in the ABA Journal piece. “Knowing this in advance will influence your plan, and your plan should be completely dependent on your goals.”
You can rest assured that your business is protected 24/7 when you have professional liability coverage with Lawyers Mutual. Our email newsletter “Practice Reimagined” offers timely tips, pointers and valuable links to keep you safe and successful in the new normal.
“The idea of hanging up your own shingle can be scary and confusing, while others might not know where to start,” says ABA Journal writer Victor Li, author of this article featuring Zavieh, Tarascio and other legal consultants on what to keep in mind when starting your own practice. The following takeaways and quotes are from the article.
How Big Do I Want My Practice To Be?
“The size of your practice depends on what area you want to specialize in. One factor to take into consideration is how popular your practice is in your area. Another point is whether you want to take on fewer higher net-worth clients versus many lower-to-middle-class clients; you may not need a lot of manpower.” Jack Newton
“Growing the firm may not mean adding more lawyers. That may be a good plan if you need more hourly billers or attorneys available for court appearances. But outsourcing to virtual assistants, contract lawyers and automated services is often a better alternative.” Jim Calloway
“I started with a small goal. My husband and I decided that if I could build a certain income stream, it was worth giving it a second year. It wasn’t the income I wanted long-term, but it was a first-year goal.” Megan Zavieh
Source: The ABA Journal
How to Create a Business Plan
“Do it, but don’t overthink it. It can be paralyzing to embark on a plan that we aren’t trained to write, but it’s not half as hard as you think it’ll be. It’s a living document. You can always pivot and change course.” Megan Zavieh
“Planning is key. Use the internet. It’s a great resource for educating yourself on any topic. Seek feedback at every step of the way from peers, colleagues, etc., to make sure you are on the right track.” Jack Newton
“The old adage that you can’t manage what isn’t measured is more important than ever in today’s legal economy. Business plans without metrics built in cannot succeed because there is no way to measure success. Failure is even scarier because without metrics to tell you when to stop or change directions, you can get in very deep before you even see the failure.” Patrick Palace
“What are your revenue goals? Here’s one way to look at it: A 365-day year has 104 weekend days. Subtracting holidays, sick days, vacation days and family events leaves 220 working weekdays during the year. To gross $1 million per year, one would then need to average over $4,500 in revenue per day; while to gross $100,000, the average is over $450 per day. Gross is reduced by overhead and taxes before it ends up in the lawyer’s hands. And that is one reason why so many lawyers work many weekends and fail to take off sufficient time to relax and recharge.” Jim Calloway
Source: The ABA Journal
Jay Reeves is author of The Most Powerful Attorney in the World. He practiced law in North Carolina and South Carolina. Now he writes and speaks at CLEs, keynotes and in-firm presentations on lawyer professionalism and well-being. He runs Your Law Life LLC, which offers confidential, one-on-one consultations to sharpen your firm’s mission and design an excellent Law Life. Contact jay@yourlawlife.com or 919-619-2441.
