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You Only Need One Thing to Start Your Law Firm

Iphone

A lawyer wants to start a law firm. Maybe she’s straight out of school. Maybe she’s leaving a position in a firm.

She calls me and wants to talk about getting set up.

“Do you have any clients?” I ask.

“Not yet,” she says, “But I’ve got a plan, so I want to talk to you about making sure I’ve got everything covered when I get started,” she continues.

I explain that she needs one thing and only one thing right now. She asks what I mean.

“You need a phone,” I tell her.

She’s not satisfied. She wants to talk about office space, malpractice insurance, a laptop, and a website.

“Do you have a phone now?” I ask.

“Yes.”

“Then you’re good to go,” I tell her (I should just hang up at this point, but I’m a glutton for punishment).

She’s not satisfied. I understand. But I’m serious. The phone is all she needs until she has a client. With a phone, she can take care of everything else.

But, what about…

Office space? She can rent or borrow a conference room for her meetings.

Malpractice insurance? Until you have a client, you don’t need it. Once you’ve got a client, then take some of that money and buy it—it’s easy—they have really nice salespeople (I bet you can get them to buy you lunch). Plus, if you don’t have any assets, buying insurance might not even make sense yet.

Laptop? Get a client first. You can pick up a laptop at Best Buy in 20 minutes. Plus, you already have a laptop, right?

Website? Go get a client and stop worrying about the website. If you insist on building one, then do it with SquareSpace while you’re watching TV one night.

A paralegal? You’re kidding, right?

A copier? You’ll find these located at FedEx stores and elsewhere. They’re just sitting there waiting for you.

Practice management system? What practice? Get a few dozen clients, and then you’ll have something to manage.

I could go on and on explaining why you don’t need to worry about all this stuff. Bottom line: you don’t need to worry about all this stuff.

However, you do need to worry about getting that client and then getting the next one. Focus on building relationships with people you know and people you don’t. Ask for help; ask for referrals. Do it 24/7 until you’re so busy that you can’t do it any more. That’s what you need to worry about.

Oh, I was almost done with my conversation with her when she jumps in and explains—

“I’m going to do the marketing when I leave my position with the firm,” or she explains, “I’m going to do the marketing when I pass the bar exam; I’m just getting organized now, so I want to get all the information I can before I get started.”

Nope, nope, nope: I’m not buying it, and we’re still not going to talk about office space, malpractice insurance, and websites. No way—not gonna do it.

She can do the marketing now; she doesn’t need to wait. She can take people to lunch while she studies or works for the other firm. She can join clubs, volunteer at the domestic violence center, and attend bar association events. There’s no reason to wait; there’s no reason to get absorbed by the distractions of getting ready for later. She needs to be marketing now, and all she needs is a phone.

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  • http://twitter.com/BruceGodfrey Bruce Godfrey

    Buy malpractice insurance AFTER you have done work and earned the fee, possibly having committed malpractice before buying the coverage? Or take the fee before you have earned it through performing legal services, in flat violation of ethics rules?

    Further, malpractice insurance exists not only to protect the attorney but to protect the CLIENT, who has a right of some possibility of recompense under basic principles of morality; your casual disregard of the client’s needs through making oneself judgment-proof in this context flies in the face of our duties as fiduciaries of our clients’ welfare.

    Marketing oneself as an attorney when one is NOT an attorney (having not yet been admitted to the Bar) constitutes the sort of misrepresentation that we in Maryland have to report under the squeal rule if we see it happening. I suspect that it’s also true in North Carolina. Non-attorneys (i.e. those who have no law licenses) have no business marketing themselves as attorneys; to do so is often criminal. Of course, “marketing” oneself as a nice person or a community-minded person (if true) is always fine.

    As for at least some office space and a website, getting the first client without either is going to be a challenge in 2012 but at least there’s no ethical implication (in most states) about not having a permanent office. Most referral sources, including other attorneys, Bar Association referral sources and other legal services plans won’t refer client number 1 to an attorney who has no office (or $100K in malpractice coverage, or current Bar admission.)

    I consider this article to be exceptionally poorly conceived and will so state in other fora. Would you accept an offer to debate the merits of this article publicly before your local Bar Association, judicial conference or disciplinary authorities in North Carolina? I will pay my own costs if you are interested.

    • http://divorcediscourse.com Lee Rosen

      Bruce,

      Great input. Thanks for jumping in and sharing your thoughts – I’m sure they’ll be appreciated by new lawyers looking for all the help they can get. I hope you’ll keep coming back and adding to the conversation.

      Debate you? I’ll just buy you lunch to thank you for helping out – how about that?

      Thanks.

      Lee

  • Nathan Workman

    Bruce, I think you’re missing the point of the article, and perpetuating a mindset that leads many attorneys starting new practices to fail early on by making too great of an investment in things that don’t lead to revenue. I don’t see any portion of this article where the author has told someone to violate rules of ethics to bootstrap a startup. I’m confused as to why you’re exhibiting so much indignation.

    Malpractice insurance isn’t required in every state to practice (it isn’t here in NC). Is it a good thing to have? Absolutely. Is it a must have? No. Should you disclose to a client that you don’t have it? Probably. Will the client care? Probably not. I’ve never had a single client ever ask me if I was insured (I am, $1mil). I agree that it is there to protect clients to some degree, but the risk of malpractice at the onset of a law practice with 3-4 clients is pretty minimal. It’s not like someone’s first few cases out of law school will be outrageously complex.
    Nowhere in the article can I find advocating taking money out of trust accounts before it is earned to pay for anything; I think you’re jumping to conclusions there.
    Marketing yourself as an attorney to clients before admission isn’t the kind of marketing that Lee discussed. He mentioned clubs, volunteer clinics, and bar events. Those are all areas where someone can find potential referral sources. You can solicit and try to build referral relationships before admission by mentioning to people that you’ll be starting a practice in the future…that’s not holding yourself out as an attorney before the public. That’s creating a network that you can immediately leverage when bar passage occurs.

    As far as an office space and a website, I’ve got dozens of clients who have never seen either of mine. Maybe I’ve met them at their office, or at a restaurant, or on the golf course. Or, maybe it’s a direct referral that’s never been to my website or seen a print ad. I’ve never had a referral source ever ask me if I had an office. I think some clients would be put off by it, but more clients are put off by $350/hr legal services. I suspect there’s a market for attorneys who charge less starting out because of low overhead. Again, both an office and a website are something that an attorney could get later, but neither are absolutely, critically necessary in order to start out (people who need a physical address for ethical reasons can use their residence or partner with another firm or local business). Also, only about 50% of the law firms in my area even have a website…a person could use Facebook to make a free page that is serviceable without spending a large chunk of money.

    I’ll even add a few more items that are a total waste of money for starting attorneys: legal research plans (legal libraries are in every major city and free or minimal cost), payroll/accounting services, disability/life insurance, voip/virtual fax, and stationery (just print it off as you go). Are they all valuable at some point? Sure, if you have the money for it. The fact that I have linen letterhead with a custom watermark and thermography printing has never helped me obtain a client. It’s a nice little luxury I can afford due to hard work and success.

    With the job market as abysmal is it is for recent law school grads, more and more will be hanging their respective shingles, and they are usually easy bait for salespersons of all kinds (especially malpractice insurance agents and legal research services). They are told constantly that they need x, x, and x, to get started, and I’ve seen time after time again where new attorneys will run up $6,000 to $10,000 in monthly overhead within 6-12 months. Unless they are really raking it in, and quickly, that’s not a sustainable model, and they’ll eventually fail. And, about nothing could be worse for a client than their attorney going out of business.

    I think Lee is making a very important point that all a new attorney really needs is a way to communicate in order to start a business. Not image, not flash, not expense, just communication. That’s what creates a good reputation, builds strong relationships, makes happy clients, and eventually, leads to strong revenues. Make money, then spend money. Don’t spend money to make money (especially in this economy).

  • http://twitter.com/larryport Larry Port

    The other thing that a lot of people aren’t aware of is that you can lease a computer if you can’t afford to pick one up right off the bat or would prefer to hold on to cash reserves.

    Companies like Direct Capital are a lot more flexible than banks at financing business equipment – the rates might be higher but the extra couple of bucks that translates to a month doesn’t amount to much.

    I’m on board with you – this is where people go south. They desire to get all the stuff at once instead of building things iteratively in layers, which can get you in financial trouble at the start.

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