Your law practice is also a business.
“Practical Considerations in Opening a Law Office” Reprinted with permission from The Road to Independence 101 Women’s Journeys to Starting Their Own Law Firms published by the American Bar Association Edited by Karen M. Rockwood, copyright 2011)
My name is A. Hillary Grosberg. My practice encompasses business litigation, real estate litigation, creditors’ rights, probate and trust administration and litigation and selected family law cases. Here is how and why I began my own practice as well as business tips focused on a law practice, but useful for anyone.
I have been in practice in Los Angeles since 1981. Eleven and one-half years later, in 1993, I opened my own office. I have never looked back or in any way regretted my decision. It was not ever my intent to be a sole practitioner, but fate has its own journey. Why did I leave a firm you ask? I did not fit well at the last firm where I was employed. I was miserable. I spent a year looking for a new firm to join, but with no book of business of my own and as an eleven year attorney, I was simply too expensive for a firm to hire. (The practice of law is a business, after all.) I had been saving as much as I could because I knew that at first I would not have clients and would need savings to pay the bills. One day there was a last straw and I gave notice. I felt wonderful! Off I went with no clients or office. Can you say “leap of faith”?
First, I called a law school buddy and found a place to temporarily office. Clients would be helpful. I began calling lawyers I knew for overflow work or projects. I told all my friends. I looked for groups to join. Some were pure networking and some were areas of interest outside the practice of law. I joined local bar associations and attended events of interest. I created a website and now avail myself of online networking avenues. Results are not immediate, but most of it brings business in time. Give each group six months to a year. If by then you see no progress, move on to find a better fit. I find most of my referrals come from other lawyers whose practices are different than mine. Ask all the people you know in business for themselves what worked best for them. You will be amazed at the useful information.
You need to be an experienced lawyer before you go it alone. Both the good and bad news is that you, and you alone, make all the business decisions and client strategy decisions. You will have your hands full opening and running a business. You will not have time to learn how to practice law. More importantly, other lawyers are not going to refer to you if you are not experienced because their reputations are on the line.
I am an extremely organized person. Some of the most valuable information I can share will be the practical considerations in opening your office taken for granted when you are part of a firm.
What office supplies will you need from paper to computer toner to fax and scanner, writing instruments, files, envelopes, postage, paper clips… I made a list of what I had in the firm where I was working. I actually perused the supply room and took a look around my office.
What will be in your library? Will you use books, online or a combination? For me this has been the biggest expense, even more than my office rent. Will you need an attorney service – every day or only “as needed”? How will the telephone will be answered, directly, by a receptionist, voice mail, answering service? Will your telephone be connected to the suite or will it just come to your office? Furniture is always nice, and a computer is a must. Will you have an office at or away from home? Do you want your clients coming to your home? Do you have a practice that takes you to your clients’ place of business instead of your office?
That was the glamorous part. Now comes running the business. You will need systems. You will need to record income and expenses both for each client and the business as a whole. (Uncle Sam will be most interested in your income and expenses, thus accuracy is key.) You should be able to put your hands on all financial records for a client at any time. I have had clients call needing information on fees and costs to date for their own business or personal reasons, such as loan applications, their own taxes, estate planning or divorce proceedings in which I was not their attorney. How will you open files? Will there be a way to confirm that all files are opened the same way and that retainer letters are signed before any work is done? I made a “file opening form” and it includes the client information, opposing party information, and a list of other matters to do such as the conflicts check, prepare a costs sheet, enter the client and matter into my billing system, create a ledger, and (since I keep paper copies of my bills) creating a notebook divider to insert in the notebooks where I keep my bill copies. Will you keep a client list? How will conflicts be checked? Will you keep your files by number or name? What happens when a file is closed? Will a letter go to the client to confirm the closing? Where will you keep your copy of the bills – in the billing software and/or saved elsewhere in your computer and/or paper copies (in each file or centrally located)?
I find forms very helpful. I have retainer agreements, file opening checklist, client costs, document and pleading indexes, client ledgers and client trust account ledgers (yes, I keep written ledgers), a client list, a closed case list, expense and income lists, mileage list, and the ever important time sheets, among others. The ledgers have been lifesavers! While everyone laughs at my handwritten ledgers (and it does take time at the end of the month), when my computer has crashed (yes it will happen and you are the IT person) I can simply check my client ledger sheets and when I have an operating computer again, simply enter the current balance and move forward!
On the subject of billing, I have made it a practice to send my bills at regular intervals. For me, that is the last day of the month. Even if a matter is a “flat fee” case, I still record all time spent and send a “no charge” bill to the client. I find this a good way to let the client know what is being done all month for the money they have paid.
OK, Systems in place! Next, decide about software. The four main types are word processing, billing, calendaring and financial. Word? WordPerfect? Both (These days that’s what I have. I prefer to work in WordPerfect, but many clients only have Word.) What type of calendaring software will you have? There are many available. You will need to decide whether you will do your own billing and have software or outsource your billing. There are many billing software sources and many companies that offer billing services. Unless you outsource your bookkeeping, you will need financial software (to use much like your checkbook). Talk to an accountant about what “accounts” to set up. This will make tax preparation a breeze instead of a nightmare.
Now, protect all your work and records. You will need some sort of backup system for your computer. There is online offsite (“stored in space”), accessible from any computer – that brief due in two days can actually get filed! There are external hard drives, flash drives (this is what I use for my data on a daily basis), and a plethora of other ways to save the data and programs so that when that computer crash occurs, you have not really “lost it all”.
Consider insurance (boring, but necessary). I talked to an agent experienced with lawyers’ malpractice insurance to learn all the coverage variations. Employees? Worker’s compensation insurance. You may also want to have general liability and contents insurance.
You are now armed with information. This may sound overwhelming, but if you set it up right, it runs like a well oiled machine. The single best thing about being a sole practitioner is the power to decide who will be my clients. Exercise that power while running a great business! It is well worth your time and what an accomplishment!