Starting your own law practice is a risk and involves multiple considerations and layers. It can be a time-consuming and daunting undertaking, panelists at a recent Law Firm Laboratory program said.
The days of putting up your own shingle without serious consideration of issues such as what type of office space, technology, marketing and financing strategies is ill advised and can lead to disastrous business consequences. Panelists at the Oct. 23 program included Lisa Kennedy, SBA Finance Group, PNC Bank, NA; Daniel J. Siegel, principal of the Law Offices of Daniel J. Siegel, LLC and president of Integrated Technology Services, LLC; Carol Huff of Huff Equities; Kimberly Alford Rice, principal of KLA Marketing Associates; and Kristine L. Calalang, principal in The Law Office of Kristine L. Calalang.
Calalang gave a firsthand and practical account of her first two years of solo practice after transitioning from private practice for eight years. “Parts of your life include whether you are happy and also involve reevaluating whether you are happy. Evaluate your time at work, because we spend a significant amount of time there; it should be worthwhile,” she said.
Calalang said she went out on her on because she found the flexibility and the control over her own destiny to be rewarding. She started her business with a client base and the ability to generate clients on her own. She talked about the importance of being visible. She joined committees and maintains a network that helps to avoid potential feelings of isolation. Issues such as cost should be thoroughly considered, and she suggests having a plan for six months out for living expenses. She suggested reading up and following a structure on how to start your practice. She discussed case management software, office space, entity formation, and other technological issues. One should keep in mind that overhead costs should be a concern when renting space and should be kept low.
Kennedy said an accountant is a necessary person to consult during the process of obtaining financing. “It is important to put your package together and make sure you have a detailed business plan, which should include written projections, your resume, tax return, and your assets and liabilities. It is advised to pull your own credit report and know who and where your customers are coming from, keeping in mind the competition.”
She spoke about the five Cs of lending – capital, collateral, capacity, conditions and character. She said SBA Express loans of less than $350,000 are a good option for a solo. Friends and family should also be considered for loans as well.
When considering real estate options, Huff said to look at it from a facilities standpoint. Real estate is one of the highest costs that you will encounter. It is advised that you consult with a real estate professional about what your needs are. Some factors to consider are the image you will project, your long-term and short-term goals, how often you will be moving, and proportionate costs – costs you don’t even know about, haven’t budgeted for, and are surprised with. These include operating escalations, use and occupancy tax, and insurance.
Not only is it important to speak with a knowledgeable real estate professional, but when starting out you should also invest in high-quality technology. Siegel said that proper technology could take the place of a paralegal. In general you need high-quality printers, computers and scanners. You should have high-speed Internet access and backups for storage on and off site in the event of any emergency. “Make the investment up front,” he advised.
With advanced technology and multiple social media tools available to us, “it has never been easier to build a client base and strengthen your reputation,” said Rice. “Foundational initiatives,” such as the importance of the name of your law firm and its website, should be initially evaluated. Always be marketing and maintain a “marketing mindset.” She said that your time has a dollar amount. Be mindful of its use.
Maureen M. Farrell ([email protected]) is principal in The Law Offices of Maureen M. Farrell.
This article originally appeared in Philadelphia Bar Reporter, December 2014.