“Should I start my own law firm?” is a question that may have crossed your mind at one point in your career as a lawyer.
At first glance, the pros seem quite attractive—being your own boss, setting your own schedule, deciding your own workload, and picking up cases you’re passionate about. However, for every pro, there’s a potential corresponding con. For example, being your own boss means that you’ll be solely responsible for all the business operations work like bookkeeping, purchasing insurance, and getting a business license, on top of practicing law.
Depending on whether you’re just starting out in your career, or have been a lawyer for a number of years, your challenges may vary. So how do you know if you should start your own law firm? Read on to learn more.
What to consider before starting your own law firm
Starting your own law firm is not easy. It’s common for first-time solo practitioners to feel as if they’ve led themselves directly into an uphill battle. When it’s all said and done, the volume of tasks required at each stage of a client’s journey can be daunting. And, after taking on that first legal client, even more responsibilities emerge such as managing client communications, and ensuring that invoices are fulfilled.
Given this forewarning, it might seem unlikely that many lawyers would still willingly take up the challenge of running a solo law firm. Yet many still do. Regardless of previous experience, consider that nearly 50% of lawyers in the United States are solo practitioners.
Before you dive into the world of entrepreneurship, make sure you understand exactly what you’re getting into.
Think about the why
Before you start your own law firm, it’s important to think about and understand the “why.”
There’s no particular right or wrong reason to want to become a solo practitioner, so long as you’re doing it for a sustainable, long-term reason. For example, if you need a more flexible schedule, there are other ways of achieving that without diving into the responsibilities of entrepreneurship.
Consider what attracts you to being a law firm owner. If you need a career change, consider an alternative legal career. Knowing why you want to start your own firm will help carry you through the hard times and make the good times much more rewarding.
Maybe you’ve had an entrepreneurial spirit instilled in you for a long time and being a solo practitioner has always been a dream of yours. Dreams can come true, but it helps if you understand what it entails.
Is now the right time to start your own law firm? Or is it something you can plan for in the near future? For example, if you’ve just had a child or are expanding your family soon, it might be wise to wait. Being a business owner while practicing law is already stressful enough without juggling the responsibilities of new family members.
On the other hand, depending on your practice area and jurisdiction, you may find that right now is the perfect time to start a law firm. With the rise of remote work, lower overhead costs, and increasing accessibility, the barrier of entry to being a solo practitioner is lower than ever before.
While there are many steps you need to complete in order to officially start your own law firm, you don’t have to do it alone. Download Clio’s complete 10-step Guide to Starting Your Own Law Firm supported by insights and advice from legal experts and successful founding partners.
Benefits of starting your own law firm
Becoming a solo practitioner may not be easy, but for most it’s worth it. In fact, 85% of solo practitioners consider their firm successful and thriving. For these law firm owners, the benefits far outweigh the costs and some may even find the amount of hard work and hustle required to be challenging and motivating.
Fuel your entrepreneurial spirit
Starting your own law firm has many rewards, especially the challenge itself and the learning opportunities. For some lawyers, there’s nothing more rewarding than starting a business from scratch and watching it grow. Taking on the ownership role pushes you to grow in ways that aren’t possible when working for another law firm.
You’ll also earn the respect that comes with owning your own law firm. One study that surveyed satisfaction among small business owners found that 81% of respondents say that the entrepreneurial portion makes them happy.
Increased flexibility and control
While solo practitioners will have to work very hard at the beginning to establish their firm, the payoff can be huge.
Setting your own hours, fees, fee structures, and dictating which clients and projects you want to take on—all of these aspects of starting a law firm are under your control as the law firm owner. At first, you may accept every client that comes your way. But as your firm becomes more reputable, you can pick and choose your cases.
Maybe you were unhappy with how certain processes and workflows were established at your previous law firm. Now, you can have the final say in how those processes are created. Even if you’re a student and thinking of forgoing working in a firm to become a solo practitioner right out of law school, you can still research how others grow their firm and ultimately control the direction of your business.
Legal technology can make it easier to start your own firm
Legal practice management software is a staple in many law firms of all sizes. Law firms use practice management software to manage everything from client intake to invoicing, document management to eSignatures and more.
When you’re starting out, you can sink hundreds of unbillable hours on manual administrative tasks. Cloud-based legal technology has made it easier than ever for new solo practitioners. From cutting your workload through automated tasks to lowering startup costs with streamlined workflows, legal practice management software is a worthwhile tool to invest in.
Legal technology also gives you the ability to take online payments. While 40% of consumers say they would never hire a lawyer that doesn’t take debit or credit cards, many law firms do not offer this option. Firms that do offer online payments would immediately gain a competitive advantage, which is crucial as you start out.
Why starting a law firm may not be right for you
Despite the potential long-term benefits, becoming a solo practitioner is not for everyone. For some, starting a law firm may not actually be realistic—and that’s okay. For example;
You prefer to focus on your caseload
It takes a lot of time, patience, and skill to juggle being a business owner while practicing law. Being a business owner also means being an accountant, a marketer, a salesperson, a compliance officer and more. This type of high-stress environment isn’t the right fit for everybody.
Some lawyers also prefer to do their own casework and leave the running of a business portion to the employers. After all, practicing law is usually the most enjoyable part of being a lawyer.
You want to gain more experience first
According to the ABA, about 0.9% of law school students chose to become solo practitioners right after graduating. While it’s possible to be a successful law firm owner without having worked in a firm, if you’re in the other 99.1%, you likely wanted to get some experience first.
Working in a firm allows you to see how other law firm owners run and operate their business, while also enjoying potential opportunities for mentorship.
You could be in the driver’s seat
Ultimately the answer to the question “Should I start my own law firm?” is “It depends.”
There’s no doubt that you need an exceptional force of will and sheer desire for the success of any new law firm. Lawyers need the right business management savvy together with ambition and passion to be successful solo practitioners.
After reading this blog post and considering your options more carefully, you may also decide that being a solo practitioner is not for you. However, if you’re willing to commit to seeing the journey through, finding ways to work harder and smarter for your clients, and are passionate about being a law firm owner, starting your own practice can be rewarding and fulfilling.