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Starting a Law Firm | Three Important Lessons

Daily thoughts on law firm success.

Starting a Law Firm | Three Important Lessons

This post is from the first blog I started, called “How to Start a Law Firm.” Over the years I’ve moved to different sites a few times and wanted to catalog all of my content in one place. If an article refers to a link and there is no link, sorry, that’s consequence of the move. Enjoy!

I had a happy with a guy last week. I’d met him through a friend. When I first met him he had just finished his LLM in tax and was in the job hunt – and it was a tough job hunt. I, of course, told him he should think about going out on his own. “The money is better, the work is better, and you’ll be happier,” I told him. He wasn’t buying it.

Fast forward to last week, probably a year since we last met and talked. He was out on his own, doing okay but not great. He gets pretty much all of his business from referrals, worries about charging too much money, and is scared to death of flat fees. But he must be doing something right, because he is making some money.

After talking with him for a while I realized I needed to write this post. I’m pretty sure I’ve talked about these things in the past, but it never hurts to hear them again. These three lessons are extremely important to starting a successful law firm. Seriously. If you can get these lesson through your thick skull (I never said they were easy lessons) you will increase your chances of success by one hundred fold. So let’s get to it.

1. You’re Either In or You’re Out

I understand that some people just don’t want to run their own business. I’m okay with that. And I understand that the economy is tough and that jobs are hard to find. That’s simply going to be the reality moving forward. These two truths make finding a job tough, and when people need to eat, they’ll do things for money that take them out of their comfort zone (not too far out of their comfort zone mind you – for all you with a less than biblical mind). This means, for some going out on their own.

But here’s the thing. You can’t have one foot in the job search pool and one foot in the starting a law firm pool. It simply doesn’t work. If you find yourself going out on your own the best way to do it is to jump in headfirst and swim.

People can tell when you aren’t committed to doing something. And when that something is running a business that is supposed to be designed to help them, they get nervous. Nervous people don’t hire. Trusting people hire.

In a nutshell, lesson number one is this – if you can’t find a job and decide to go out on your own make a commitment to really go after it for a year. Just one year. Stop submitting resumes. Stop telling people you are looking around. Start telling people you are the owner of XYZ Law Firm. Start telling people how you can help them solve their problems. Do a little marketing. You might be surprised by what happens.

2. You Have to Spend a Little Money to Make a Little Money

This one sounds obvious, but for me, at least, it was really hard to put into practice. Part of our training as lawyers taught us to look at all the angles, see all the faults, document all the possible ways a project could go wrong. That’s great when you are working for a client and assessing risk, but it’s terrible when you are trying to make business decisions.

For example, I was talking to my buddy at this happy hour. We were talking about setting up a website. I told him it was a must (and it is). He asked me where I hosted my site. I told him I had no idea – I use the host my web guy uses for all of his sites because he likes them. He asked me how much it was. I said it was like $10 a month. He looked at me, dead in the eye, and said “I found one that works okay that’s free.”

Great! Free! Works okay! That’s amazing! Okay probably means 80% of the time. What a way to evoke potential client confidence.

Spend the $10 a week to have reliable service.

I know if you are starting a law firm you are probably doing it on a shoe string budget to start. I get that. But at some point you are going to have to start spending a little bit of money. The question you need to ask yourself is if the expenditure is going to make you money, and you make money in two ways.

First, if something frees up your time so you can spend it making more money, that is worth the money. Great examples of this are assistants and any technology that makes you life easier. My assistant, for example, is great. She does a whole bunch of stuff that I could probably do if I wanted to but eats up a bunch of time I could be spending doing other, more productive things (like writing this blog).

Second, if something brings in more money, it’s worth spending money on (and most of the time it’s worth experimenting with). This, in a nutshell, is advertising and marketing. There are a ton of free things you can do to market your law firm, which maybe I’ll talk about on Friday, but there are other paid things you can do that can really help.

I know what you are saying right now, “how do I know if these things will work?” Bottom line is, you won’t until you try. But the key here is to try with a reason. You need to be asking yourself one question at the end of the day – does what I’m paying for bring in more money than I’m spending? If it does, buy valium then it’s probably worth holding onto for a while.

Here’s an example from my practice. As most of you know, I’m a DUI defense and criminal defense attorney. Most of my business comes from the (free) internet and from referrals. From time to time I will be persuaded to try a paid service that generates leads for my businesses. (As an aside, I haven’t found one yet that works, but I keep on trying). This time the service I tried was People go to their site, ask for a consultation, and my phone rings. They’ve got great search engine placement, so I thought I’d give them a try, even though I was skeptical that the only people that ask for consultations on sites like those are by definition bad leads. So I signed, up. But here is the important part. I made sure I did two things.

1. I made sure to sign up for a long enough term to see if it was producing but short enough not to lose my shirt if they sucked; and

2. I made sure to TRACK ALL LEADS coming from them to see how they turned out.

As I suspected, the leads were not the kind I was looking for. So at the end of the trial period, I cancelled.

But here’s the important lesson – I spent the money to check it out. I didn’t dismiss it simply because it cost money. I didn’t want to lose out on a potential opportunity so I checked it out. If it made money I would have stuck with it. It didn’t, so I dropped it and moved on, attributing it to the cost of running a law firm.

Don’t think of things in terms of what they cost – think of them in terms of what you will gain. If it’s worth it, pull the trigger.

3. Don’t Try. Do.

I’ve got two stories to get this lesson started, but before I tell them, I want to let you all in on a little secret. I don’t know everything. Yep. That’s right. I make mistakes. I have fears. I have limitations. But I’m working to get over them. Which leads me to my first story.

I credit a lot of the success of my law firm to the owner of the first firm I rented space from. He didn’t have a lot to teach me as a lawyer, but he was an astute businessman. And while he didn’t spend a lot of time with me one on one talking business (though he did do that a couple of times), I was able to pick up a lot (both things I thought were good and bad) from seeing the way his firm functioned.

One of the things I’ll probably remember forever is a time he got after one of his employees a little bit. He’d asked him to do something and he hadn’t gotten it done. He asked the guy what he was going to do about it and he said “I’ll try to…” and that’s about as far as he got. Once those words came out of his mouth the owner said “do me a favor. Come over here and sit in this chair. (he sat) Now try to get up. No, don’t get up, try to get up. Stop trying and start doing.” Seemed like a harsh lesson at the time, and I probably wouldn’t have taught the lesson in that way
, but it makes a lot of sense. No trying. Only doing. (I’m pretty sure that lesson was taught in Karate Kid too, but that’s for another discussion).

That story leads me to my second story, and this third lesson. I was talking to this guy at happy hour and we were talking about all of the ways he could ramp up his business. This discussion included things like start a blog (which you should all do), raise fees, ask for more money, etc. Every time we started talking about something he’d say something like “I’ll try to do that” or “I’ll think about it.” Finally after one of these times I just said, “no you’re not. Do you even want to talk about this stuff? We can talk about something else if you want. But I can see it in your eyes that you aren’t going to do any of this stuff, so why waste our time.” It shocked him, but it was the truth.

Bottom line, you need to get started today. Stop making lists and thinking about things and researching and discussing and planning. Start. The great thing about it just being you (or a couple people) is that if you make a mistake you can just change course until you get on the right course. Starting a law firm is all about experimenting, tracking, and analyzing the results to see if you are on the right course. If you are on the wrong course, try something else. But I can guarantee you you will never be able to plan a perfect anything the first time – there are variable out there that you don’t even know exist yet.

I hope these lessons help you. I know for me, just writing about them, reminds me of some of the things I need to do stay on a successful path. As always, comments, questions, concerns about this stuff, just let me know. I’d love to chat.

And, if you’ve made it this far, then I can tell you really care about starting your law firm. Because of that I’m going to give you a chance to get your story out there and get some Google love. If you’ve started a firm recently I want to hear about it. Send me a post, at least three hundred words long. I want to know about why you started, how it’s been going, and what your next steps are. Let me know what you practice, with a geographical location, and what your website or blog is, and I’ll include a link with the post. Good luck!

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