Have you ever thought about starting your own law firm? Find out if becoming a solo practitioner is the right choice for you.
Getting your “law license” is no different than getting any other kind of professional license. It gives you the right to work in the state where you want to practice your profession and the right to set up your own business. Having the latter is deeply ingrained into what it means to many people to be successful. Many attorneys believe that the true route to success and happiness is through having their own law firms.
Choosing to start your own law firm is a significant decision that will have profound implications for the rest of your career. Starting your own firm might take your career in a new, glorious direction, or not. It might impede your professional advancement and hinder your entire career. You must think through the pros and cons very carefully. Starting a firm is extremely challenging. You might succeed, but the odds are that you will fail.
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Every great firm (and there are literally tens of thousands of successful firms out there) started somewhere. You too could be the next attorney to start a great law firm and there is nothing stopping you except understanding whether this is the right decision for you.
I seriously contemplated opening my own law firm when I was still practicing at Dewey Ballantine in Los Angeles. Discouraged with the politics of the firm and believing I could make just as much money starting my own firm, I set the wheels in motion. The Internet was in its infancy (i.e., pre websites), so I took the first steps by taking out an advertisement in the Yellow Pages ($750 a month) and then rented an office. I picked a date for my departure from the firm, set up my new office, purchased a copier and a new Dell Computer, and I was ready to go.
Recognizing that all law firms need a source of regular and ongoing business operations to succeed, I had already lined up clients for my new firm—friends who were successful entrepreneurs. I was confident I could bill $100, 000 to $200, 000 a year from these clients, which would be sufficient to sustain my firm. I also understood that if business from these clients was not sustainable, I would need additional and separate sources of business, hence the Yellow Pages advertisement. It is important to always have a backup plan so the phone continues to ring with new businesses.
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When I gave my notice to my law firm, the attorneys told me the same piece of advice I am going to tell you in this article: “If you leave here and start your own practice, you will have a next-to-impossible time getting a job in a large firm ever again. Speak with some other law firms if you are unhappy here. Take a few months to make up your mind.”
Incredibly, Dewey Ballantine told me to take a few months to figure out what I wanted to do and to continue working while I looked around. On its recommendation, I started speaking with legal recruiters and going out on law firm interviews. Meanwhile, my phone started to ring with calls from “clients” responding to my Yellow Pages advertisement. I met with them in my “other office” after work hours at Dewey Ballantine. My new clients included the following:
I learned that although I was lucky enough to have some “real” clients (small companies owned by people I knew), the reality of starting my own firm included having to take undesirable cases to pay the bills. Most of the potential legal work that I had lined up from my Yellow Pages advertisement depressed me so much, I decided against having my own firm. During this period of contemplation on where I wanted to take my career, I was still going out on interviews with law firms, and that experience confirmed that I was no longer interested in working in a law firm, even though working as an attorney for someone else still seemed better than starting my own firm.
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During this time, I also came to realize that the only people who seemed like they were enjoying their work were the legal recruiters who were sending me out on law firm interviews. I soon recognized that for me, it would be more fun and more satisfying to help attorneys find jobs than to set up a solo law practice. So I became a legal recruiter.
A topic that comes up frequently in the course of my work as a recruiter is about starting one’s own law firm:
Although I became a recruiter, I actually love the practice of law and have never really left it. In time I did decide to start a law firm and, except for a period of dormancy, while I got my legal recruiting company going, my firm has been operating for years handling matters for my companies as well as for outside people and businesses.
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My firm has a few attorneys and is moderately successful because of my business plan and analysis ensuring I am offering the appropriate legal work for what the market needs. For example: (1) I have my own companies as clients; (2) I am in a small town of 13, 000 people (Malibu, California) where there are only two other small law firms; (3) there are a lot of wealthy people willing to pay top dollar for legal services; and (4) I know how to recruit good, stable attorneys because I have been doing it for most of my career.
An honest evaluation of my firm includes an acknowledgment that it might not be as successful if I did not have a built-in client base, special recruiting skills, and very little competition. Every business—a law firm included—needs some sort of special advantage or selling point in order to succeed. What can you offer to clients that your competition cannot? The most important thing for continued, ongoing success is to have a marketing pipeline that consistently delivers new matters to your door.
Given my professional background, I understand both the desire to start your own law firm as well as the challenges of actually running a small firm and the even greater challenges of being successful at it. Hence, the basis of this article: the top 10 reasons to start or not to start your own law firm.
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Despite the challenges, people can start small law firms. Here are the top 10 reasons why you might have what it takes to go solo and be successful at it.
1) You Have a Group of Clients Who Will “Go” with You and You Trust Them to Give You Work, or Your Former Law Firm or Corporation Will Give You Work
Many attorneys who leave law firms do so trusting that they have clients who will go with them and give them ongoing work. Many of these relationships may be decades old. Due to the attorney’s skill and work history with the client, he is secure in the continuance of the relationships and workflow.
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For example, I know many patent attorneys who do work for large clients in various industries and their work is so sophisticated few people can do it. The client likes the attorney, appreciates the attorney’s sophistication, and is interested in continuing to work with the attorney regardless of whether the attorney is solo or not. I also know of real estate attorneys and corporate attorneys with similar ingrained client relationships. In one case, I saw the general counsel of a healthcare company leave, start his own law firm, and build it up to 50 attorneys doing work for the healthcare company. (That lasted until the healthcare company fired the attorney and the entire law firm spectacularly went out of business).
An attorney needs to be very careful in assessing whether or not a client will follow him and continue to give the attorney work. Attorneys who manage this can succeed as solos or with small firms.
Things can also work out if an attorney’s former firm sends work to him. This frequently happens, with departing attorneys getting fed smaller cases and other work from their former law firms. Many attorneys who have left large law firms have been quite successful in these situations and continue to be successful so long as they maintain good relationships with their former law firms.
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For example, I know of several attorneys who have left large law firms on good terms after not being made a partner. This typically happens at major firms that simply do not have the capacity to add too many partners. But if the attorneys leave on good terms, the law firms often will feed them enough work for them to be successful as solos or with small firms. Some major American law firms had humble beginnings based on a lone practitioner maintaining a good relationship with a prior firm. (The caution here is that the law firm will quickly stop sending work if it feels that anyone is having a bad
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