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Every great legal career has a turning point—a moment when you realize you're not just practicing law, but building a legacy. When starting a law firm, your ultimate goal goes beyond simply making money. You're building a practice that provides exceptional guidance, transforms client experiences, and authentically represents your professional values. This requires more than legal knowledge—it demands a holistic understanding of your strengths, a clear communication strategy, and the courage to differentiate yourself in a competitive market.
Starting a successful law firm requires strategic planning and execution. The key areas we'll explore include:
- Creating a business plan that outlines your firm’s mission, financial projections, and growth strategy while identifying your unique value proposition in the legal market.
- Specifying your law practice area based on your expertise to ensure you position yourself effectively against existing competition.
- Registering/licensing your law firm, ensuring your firm operates within all regulatory frameworks.
- Defining your firm structure based on the business entity type, management structure, and operational procedures to support sustainable growth and client service excellence.
- Hiring staff to build your dream team using a variety of methods to attract talented individuals.
Throughout this guide, we'll delve deeper into each of these areas and explore additional aspects of starting a law firm.
Should You Start a Law Firm?
You're making an enormous commitment when you start your own firm. When you have your own business, you have responsibilities and liabilities that an associate or even a shareholder in an established firm can avoid. At the same time, you have control over your own practice. Forming a limited liability company can help prevent some risks and liabilities for business owners.
No one can tell you whether you should start a law firm. But you should carefully consider the pros and cons of trying to act as a business owner while maintaining a law practice.
10 Steps to Starting Your Own Law Firm
There is no recipe for how to start a small law firm. Instead, you should gather information from as many sources as possible and synthesize the information into a plan that addresses your law firm's goals. Below, we will discuss 10 steps that can help you start a new law firm.
1. Create a Law Firm Business Plan
A business plan sets out the goals for your law firm and how you expect to achieve them. It addresses several issues relating to the formation of a new law firm, including:
As you develop the business plan, remember that the process is just as important as the result. Thinking through the plan and putting it into writing will focus your mind and ensure that you address every issue, including matters you might have otherwise overlooked.
For example, as you prepare your financial projections, you will often think of overlooked expenses like postage or copier toner. Instead of focusing only on startup costs, ask, "how much does it cost to start a law firm and keep it running?" This will help you identify both startup and operations costs early in the process.
2. Specify Your Law Practice Area
Many lawyers who start a law firm already have an established practice area. While you should always keep an open mind about adding to the services you offer, you should also focus on legal fields you know.
If you plan to start a law firm out of law school or a after working in-house, you may have more flexibility in choosing a law practice area. You will consider many factors when choosing a practice area, including:
- Areas you know and enjoy
- Fields that meet client demand
- Services not provided by other lawyers or law firms
The critical factor is your potential client base. Focus on a practice area where you will get the clients needed to support your business.
3. Register/License for Your Law Firm
You must be a licensed lawyer to open a law firm, as practicing without one may result in criminal charges. State bars or boards of bar examiners manage admissions, requiring graduation from an ABA-accredited law school, passing a background check, and completing the state bar examination. Some states offer reciprocal admission for attorneys already licensed in other jurisdictions, providing some flexibility in the licensing process.
Once you have a license to practice law, you can open your own law firm. But before you start searching "what do you need to open a law firm," you should consider the responsibilities you will shoulder in your own law firm. As we have mentioned in the cons of starting a law firm, you will bear liability for any errors or omissions in your practice. Even if you have malpractice insurance, you could lose everything if you make a mistake.
So, consider:
- Gaining practical experience by working under a mentor in a small firm or solo practice before establishing an independent law firm.
- Partnering with colleagues to help distribute business responsibilities and provide mutual professional support.
You should also purchase professional liability insurance to protect you and your firm from potential legal malpractice claims, ensuring financial security and peace of mind.
4. Define Your Law Firm Structure
Lawyers typically choose between various entity types, including general partnerships, sole proprietorships, limited liability partnerships, limited liability companies, and professional corporations. Each structure presents unique advantages and challenges, with most legal professionals gravitating towards LLCs and professional corporations due to their limited liability protections.
The registration process demands meticulous attention to detail. Legal entrepreneurs must complete entity registration with the secretary of state, obtain federal and state tax identification numbers, secure necessary business licenses, and potentially register trademarks. Of course, you have to check your state and local laws to determine your registration requirements.
Insurance is also another critical consideration, with professional liability and workers' compensation coverage serving as mandatory protections. Additional recommended insurance options include general business liability insurance, group health, and disability coverage for firm owners.
5. Hire Staff
Your staff can make you much more efficient and profitable. As you think about how to open your own law firm, don't overlook the value of a good paralegal or legal assistant. You have many sources for finding good staff members. You can use legal temp agencies. Many of these agencies can supply a temporary employee to "audition" for your staff.
You can also hire staff on a contract basis. Again, the benefit of a contractor is that you can hire them on an as-needed basis. When your law firm gets busy, you can bring someone in to share the load. But when work slows down, your law firm is not committed to paying the staff member's salary and benefits.
6. Set Out the Minimum Budget
Launching a law firm requires comprehensive financial planning that encompasses both initial startup expenses and ongoing operational costs. You should create a budget for both starting and running your law firm. Remember that many costs on your startup checklist are not recurring. As a result, your expenses will drop considerably once your firm is up and running.
You should invest in hardware, including essential technology like computers, printers, scanners, and communication systems. You should carefully evaluate purchasing versus leasing equipment to optimize initial financial outlay. Furthermore, don't ignore software for office productivity, document management, docketing, practice management, time tracking, and accounting.
For funding, consider savings or small business loans. However, maintain sufficient reserves for personal expenses until the firm becomes profitable. Banks typically require articles of incorporation, EIN, and a business plan for loans.
You need to put your name out there so clients can find you. Even if you have portable clients from your previous job, you still need new clients to keep your pipeline full after you start your own practice. As a modern law firm, focus on polishing your online presence through SEO, PPC advertising, and other law firm marketing strategies.
7. Collect Referrals from the Start
Many lawyers only think about how to start a law firm after deciding to leave their prior job. But building a referral network starts from the time you enter law school. Members of your class, colleagues at your first firm, and even judges can provide client referrals to help you get your law practice off the ground.
Collecting referrals usually requires two elements. First, you need to network. Attorneys can only refer clients to you if they know who you are and what you do. You should join professional organizations and spend time around other attorneys. And when you start your own business, make sure you put the word out to your referral network.
Second, you need to have stellar law firm reputation management. Other attorneys will notice that you work hard and provide excellent client service. When an issue arises in your legal field, these attorneys will steer the client to your law firm.
8. Design a Professional Website & Logo for Your Law Firm
A well-crafted logo serves as a visual representation of professionalism, expertise, and trustworthiness, leaving a lasting impression on clients and stakeholders. When conceptualizing your logo, consider elements such as color schemes, typography, and imagery that align with your firm's ethos and target audience. It's essential to strike a balance between simplicity and distinctiveness to ensure your logo is memorable and versatile across various marketing materials.
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Finally, decide whether you prefer to outsource the creation of a custom logo, tailored specifically to your firm's vision and values, or if you are inclined to purchase a template from a stock image site for a more cost-effective solution. For a professional website, partner with Grow Law Firm. We specialize in creating high-performing legal websites that convert visitors into clients.
9. Create Your Law Firm’s Online Presence
10. Decide How to Get New Clients for Your Law Firm
Growing your client base requires a sophisticated, multi-channel approach. Partner with Grow Law Firm to implement legal digital marketing strategies that deliver results:
- Data-driven SEO campaigns that position your firm at the top of search results
- Targeted PPC advertising that captures high-intent prospects
- Content marketing that establishes your authority in your practice areas
- Web optimization that guides leads into becoming clients
Our team understands and tailors these services based on your law firm's goals.
Get a Complimentary Marketing Audit
Find out how much demand there is in your geographical area
Book a Free Consultation
Additional Considerations for Starting Your Own Law Firm
Your practice area impacts various aspects of your firm's foundation, from financial considerations to long-term growth. It impacts everything from your initial budget to your long-term growth potential. Here's a breakdown of some crucial aspects to consider:
- Startup Costs: Establishing a criminal defense law firm may require a moderate initial investment, including office space, legal research tools, and support staff. However, compared to complex commercial litigation, the overhead costs may be relatively lower.
- Client Acquisition Strategies: Marketing channels that work for estate planning attorneys may not be as effective for those specializing in patent law. Target audience needs, pain points, and where they seek solutions will heavily influence your strategy.
- Competition Levels: Some practice areas are notoriously competitive, particularly in urban areas. Niche specializations can offer an advantage by reducing the pool of potential competitors.
- Building Expertise: Each practice area has unique laws, regulations, and common practice standards. The time and effort required to achieve proficiency can vary.
- Potential for Scalability: Some practice areas lend themselves well to scaled business models with streamlined processes while others necessitate a more bespoke, high-touch approach with clients.
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2024 edition
How to Get More Clients for a Law Firm
Find a Law Firm Coach—Advice from Wendy Witt on the GLF Podcast
On the latest episode of the Grow Law Firm podcast, host Sasha Berson discusses game-changing strategies for launching and scaling your law practice. Our special guest, Wendy Witt, founder of Million Dollar Attorney, shares insights that have helped over 1,000 attorneys transform their practices.
The benefit of working with a consultant is that they have helped many lawyers who are starting a law firm. These experts can provide techniques and ideas they have tested with other attorneys.
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Wendy Witt
Creator of Million Dollar Attorney System
Wendy Witt is an accomplished trusts and estates attorney with over 24 years of experience. She graduated summa cum laude in psychology from Susquehanna University and cum laude from The Dickinson School of Law. Witt currently runs a successful probate law firm in Pittsburgh while pursuing her LLM in Taxation from Temple University.
In addition to her legal expertise, Witt has extensive experience helping other law firms grow their practice and find greater success through her training and coaching programs. She is a sought-after speaker, published author, and expert regularly quoted in major legal publications.
Key insights from the episode:
- Law firms working with coaches are 70% more likely to survive their first 3 years
- Strategic coaching can reduce working hours by 40% while increasing revenue
- A $10M practice often requires fewer management hours than a $1M one
- 95% of successful law firm transitions involved either a coach or mentor
Skills Required to Run a Law Firm
The skills you need to run a law firm differ from your skills as a lawyer. Some skills you need as you learn how to start a law firm and keep it running include:
- Budgeting and sticking to a budget
- Understanding when to handle matters yourself and when to seek outside advice
- Managing staff
- Allocating your time between your lawyer and administrative duties
- Making decisions in the best interests of the firm
Unless you took a course in law firm management, you will need to learn the skills you need by watching someone else manage (or mismanage) a law firm, talking to a mentor or consultant, or trial and error.
Accelerate Law Firm Growth Through Coaching with Alay Yajnik Founding Partner at Law Firm Success Group
In this episode, Sasha and Alay emphasize the importance of young attorneys setting clear financial goals and understanding their motivations to enhance marketing efforts and achieve success faster. They discuss how financial success in law depends on finding the right practice area, personal motivation, and skill development. Addressing burnout and overwhelm due to staffing, marketing, strategy, or culture issues can be alleviated by consulting firms like Alay's.
Alay Yajnik
Founding Partner at Law Firm Success Group
Alay Yajnik is the Founding Partner at Law Firm Success Group, a consultancy focused on driving growth and profitability for law firms.
With a background in business development and a passion for legal practice management, Alay provides strategic guidance and actionable solutions to help firms thrive. His expertise and dedication make Law Firm Success Group a trusted ally for legal professionals aiming to achieve their business objectives.
Bringing It All Together
Since every firm is unique, there is no easy way to learn how to start a law firm. But there are some common steps that all law firms must complete, like getting enough insurance coverage. And there are some common mistakes that many firms make, such as neglecting the importance of cash flow.
As a result, understanding how to make your own law firm requires deep thought into what you bring to the process. You must understand your strengths and weaknesses to know where your plan is strong and where you might have overlooked an important issue. For example, if you have no background in accounting, you may need help with your budget.
Unfortunately, all law firms go through growing pains. But as you develop your plans, your research into how to set up your own law firm can help you build a stable law firm that will bring you professional fulfillment throughout your career.
One area where you can turn to expert help is marketing strategy. Check out the services a professional law firm SEO agency can offer as you learn how to start a law firm.
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Get a clear picture of your firm's performance
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Compare My Firm
Compare Your Practice Instantly
Stay Ahead of the Competition!
Compare your law firm's performance to Local competitors with our instant assessment tool
Get a clear picture of your firm's performance
Boost your online presence
Compare My Firm
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