Good Things Come in Small Sizes

By Betty Williams, President of CLA

One of the most remarkable things an attorney may do at some point in their career is to own their own firm. Lawyers do so for a variety of reasons. Some want to be their own boss, others see a pot of gold at the end of the rainbow, some want to get away from the large-firm culture, and others may have no option depending on the hiring climate.

I was surprised to learn that 37% of California lawyers qualify as Solo and Small Firm (SSF) attorneys, with 21% operating as solo practitioners and nearly 16% working in small firms, defined as a firm with between two and 10 attorneys, according to the State Bar.

Starting a Firm with a Plan for Success

Nineteen years ago, when I opened my firm with another lawyer, I was advised by a financial mentor to consult with a business advisor, which I did.  My advisor came to be known as my Fairy Godfather (FGF) because he wanted to remain nameless. He was a reputable CPA in our town who worked with many of the attorneys at the firm my partner and I were leaving, and so he didn’t want his name involved in helping us depart from that firm.

It was painful to have to prepare an actual business plan and budget for my FGF, but I completed every task he asked of me. I didn’t think I should ask for his professional advice and then cherry pick which points to follow.

Operational Decisions – the Details Matter

My business partner and I disagreed on many things, from location, to the name of our firm, but with advice from our FGF and other an attorney we hired, we ultimately got our business off the ground in a very short period of time. We were happy to have no downtime from the day we left our former firm, to the day we opened the doors to our firm.

Choosing a location is key, but not for the reasons you may think. Our FGF advised us to get out of downtown, noting that clients know they are paying a higher rate when they see beautiful marble and glass buildings, and they don’t like dealing with heavy traffic or difficult parking. So, we chose a space outside of downtown at a significant savings. I didn’t know it at the time, but in my case, most of my clients never come to my office anyway. To date, the attorneys at my firm have represented clients in every state but Vermont, and in dozens of foreign countries and territories. (Side note to anyone who needs tax advice in Vermont, please think of me! I am determined to represent clients in all 50 states!)

Legal and Ethical Considerations – A Top Priority

There are many things to consider regardless of whether you are starting from scratch, or leaving an existing practice, such as name, location, billing rates, engagement contracts, website, server, banking, furniture, and letterhead. The list seems endless. There are also considerations if you are leaving a firm, and want to know how to notify your clients, and importantly, how to ethically bring them with you.  Fortunately, through my FGF, the State Bar’s resources, and the colleagues I had met through the Taxation Section, I didn’t have to go far to get answers.

I studied all of the ethics opinions related to attorneys who own their own firms from the State Bar’s website, and to this day, I notice small infractions in the world of SSFs, for example when a solo practitioner names a firm, “Law Offices of Larry Lawyer” when Larry has only one office.

Business Management – Mind the Shop

I learned the rules on trust accounting and made sure I was entirely in compliance, and then I hired the right staff and a CPA to ensure our legal product and financial books were handled properly.

Some lessons I had to learn the hard way. There is a real art to hiring lawyers, and staff, and even the best interviewers don’t get it right about half the time.  The first time I knew I made a bad hire was when I asked an office assistant to calendar something, and she literally pulled out a small calendar from her purse and started to write in the deadline. I knew I was in trouble with that one!

Growth and Milestones

Over the first several years, I was so appreciative to have a FGF to contact when I needed his sage advice, for example whether to hire another attorney, or when it was time to buy out my partner and part ways after six years in practice together.

I also proudly called my FGF when I hit certain milestones related to finance (tax attorney to CPA after all – what else are we going to discuss?!)

Support and Resources

Last month, CLA held its annual Solo and Small Firm Summit (SSFS) which reminded me of how hard SSF attorneys work, but also what an amazing opportunity they have to define their work-life balance, client base, marketing strategies, and more.

I am proud to know that attorneys wishing to start their own firms can rely on CLA today, for many of the resources I relied on when I opened my firm.

CLA recently held its annual Solo and Small Firm Summit going over everything you need to become a successful entrepreneur. On-demand access for the Solo and Small Firm Summit won’t be ready for a few weeks. In the meantime, if you purchased access and attended the live event, you can view the recordings here. You can also visit the Solo and Small Firm Section of CLA for additional resources.

Starting my firm was one of the best decisions I ever made. I regularly advise others who are considering breaking out on their own, and it is rewarding to be on the advising end and watch others succeed! With CLA, you have support in services, and people, to help you realize your goals!