Starting a Law Firm is Both Terrifying and Rewarding

I am, like many people who have chosen to enter into the legal profession, by nature an arrogant person. I have lived for years with an over-inflated sense of my own abilities and intelligence. While law school did a marvelous job of tempering my ego, nothing truly terrified me until I started my own practice straight out of law school.

There are countless reasons for starting a law firm right out of law school, and while most of my friends and family may not believe it, hubris was not my main reason; though it has helped me to meet the challenges in the first year in business. Simply put, I started my law firm because of two factors: 1) an ability to find clients, and 2) an inability to get responses to the hundreds of resumes and applications I sent out. I have always known I would have my own firm one day…  I just assumed that day would come after about 5 to 10 years learning the practice of law in a nice medium sized firm. Instead, I am now learning all the practical skills needed as a lawyer and as a small business owner. Starting a law firm has been both terrifying and rewarding.


The rewards of starting a law firm are mostly the clichés that people talk about when they are fantasizing about starting their own small business. The most obvious reward is that I work for myself. I have only one partner, and we eat what we kill. There are no minimum billable hours to worry about, no senior partner to impress, and no worry about the impact on my ability to make partner if I decide to take a day off to take my daughter to the zoo. Owning my own firm has allowed me the time to be a part of my daughter’s life, and to have a life other than my career.

Additionally I have yet to take a client who I did not want to work with. I will never have a partner dump a difficult or annoying client on my desk, nor will I have to suffer through a few years of doing research on inane areas of the law which I have no interest in ever practicing. I am able to limit the scope of my practice, and choose my clients so that much of my work revolves around issues I am personally concerned with. The ability to modify my hourly rates, and my ability to maintain a statewide practice allowed me the ability to represent non-profit groups I support, and individuals working on projects I care about.

And finally, there is really nothing quite as wonderfully ego stroking as having your own name on the letterhead, company logo, website, and business cards. Every junior associate and new lawyer will spend their career creating a name for themselves. I am spending the same time developing my own brand.

Of course, the first and most terrifying aspect of starting a law firm is the fact that IT IS MY NAME ON THE LETTERHEAD! There is no “go to” partner who can fix my youthful mistakes or to temper my ignorance. My reputation as a lawyer is on the line with
everything that goes out of the door with my letterhead on it. Mistakes on a brief, or a filing are all mine: there is no one reviewing my work. Competency is my ethical requirement, so I spend hours which I can’t bill out to my clients if I have any hope of keeping my fees “reasonable,” researching legal issues and obsessing over documents to squeeze out as many errors as possible.

As a lawyer in a small firm there are limited opportunities to bounce ideas off of other attorneys. Thankfully I live and work in a legal community which makes itself available to answer questions and give guidance to young lawyers. Finding a mentor, or a group of experienced lawyers willing to help you over the shoals of the transition from law student to lawyer is vital for anyone thinking of starting a law firm right out of law school.

Any new law firm is a business, and the first time you lose track of that fact is the first time you will feel the financial repercussions. The first month I paid my nanny more than what I was able to bill my clients was the second terrifying aspect of my new firm. The benefits of no minimum billable hours requirement, and the ability to take time off are only illusions. As any small business owner can tell you, there is NO such thing as time off. If I am not working, there is no money coming in the door. If I don’t spend part of my time in any given month, focusing on the basic business issues—marketing, accounting, office management, networking—then I am going to spend the next month with nothing to do but spend my time marketing. I’ve heard it only takes 90 days for cash flow to dry up at an established law firm. Try ignoring marketing in a first year law firm and the time it takes cash flow to dry up is closer to two weeks. Start a small business and it will be the most selfish and jealous mistress you will ever know.

As a small business owner I get all of the credit and all of the stress. Truthfully, you will need to have the entrepreneurial spirit to succeed in starting a law firm just out of school. Few people know how to run a successful small business, and no one coming out of law school has all of the refined skills gained through years of trial and error in the practice of law. You need overweening confidence and a healthy ability to ignore stress brought on by early struggles.

Terror, the pure terror of starting a law firm, is the perfect motivation for success. Those of you who have gone to law school and studied for a bar exam, know the motivational power that terror of failing something so instrumental to your life that it is all consuming can have. To-do lists, daily goals, and pictures of my beloved family never motivate me as much as the student loan bill that comes in the mail.

The grim truth of the matter is that most small business fail within the first few years. If you don’t like feeling the cool breeze on your ass you had better find a position with a firm that will cover your tukkis. If you like the breeze… drop trou and hang your shingle.

(Photo: http://www.flickr.com/photos/lastbeats/2550737319/)

Todd Williams practices energy and regulatory law at the firm Williams & Moser in Toledo, Ohio.

  • http://www.attorneysync.com Gyi Tsakalakis

    Todd-

    Thanks for the post. Where can we find you online?

  • http://wamenergylaw.com Todd M. Williams

    Gyi-
    I’m always working on improving our web presence. For now, you can find me on LinkedIn, and at our firm website http://www.williamsandmoser.com.

    Todd

  • http://www.oceanlawusa.com/ Scott

    I started my own firm 7 years ago and have never looked back. Some years I make a lot of money, some years, well, not so much. But I will never work for another person again,and I choose to help those people who I want to help.

    One thing that you touched on which is really important is branding. The sooner you understand it and take active steps to achieve your own unique and compelling brand, the better.

    One other piece of advice is to keep non-income producing overhead low low low, but your marketing budget high. Clients need to find you. Help them.

    Great article and best regards.

    Scott

  • todd

    Great post, I really admire the confidence it took for you to start out on your own and just start your own practice. Indeed you don’t have any senior partners breathing down your neck and you have the ability to pretty much set your own law firm compensation by choosing what work to take on.

  • http://christopherhill-law.com Christopher G. Hill

    Thanks for the post. I just started my own firm after 13 years working for someone else and the rewarding/terrifying title to the post hits spot on. Thanks for sharing

  • James

    Todd, I was a government prosecutor for a few years and I am now working in a completely different and completely boring field of law. Although I appreciate the ability to learn a new area of law, I feel like I should go back to what I know best, that being Criminal Law. I have an opportunity to work with a close family member where my overhead would be little to no expense, however, I am terrified to leave my consistent paycheck that gives me the ability to pay my mortgage. I am continually frustrated at my current occupation and I am leaning towards hanging a shingle, but I am incredibly nervous to do so because I have a wife who depends on me as a second source of income. What advice do you have for me if I wanted to jump out on my own within the next three months and what strategies should I employ to market myself prior to taking the plunge so I can hit the ground running?

    • http://wamenergylaw.com Todd M. Williams

      James,
      Sorry it took so long for me to notice your comment. I hope that you have given more thought to hanging your shingle. It sounds like you have a great amount of experience in criminal law – and a desire to get back to it. I would recommend that you look into three things before making the jump – or quickly there after. 1) How do the courts in your area handle appointing public defenders? I know that the attorneys who work PD in my town do so on a part-time basis, maintaining individual practices as well. This gives them a client base – helping to make the mortgage payment each month. Of course, you should also contact those attorneys working in the area – you may get some great tips or better yet, overflow work. 2) You need to asses the overhead that you will need – can you get by with a part-time assistant, what technology can you leverage and at what cost, and is there an office space you can rent from another lawyer – hopefully with potential for referrals. 3) you need to talk with your wife….without support and understanding from her life can get hard. Realize that she may be the best foil for your dreams, and talk honestly with her about the short term (hopefully) hard going of starting a firm. A good business plan should help to convince her that this is more than a dream – it is a new start.

  • Joseph Brown

    Todd, Congratulations on your practice. I too started a solo practice after about six months of being admitted, and I can certainly relate to your experiences. Its pretty cool we live in a technological age that allows a new lawyer to start a practice, build a brand, and successfully complete with established firms in a relatively short period of time. Great job…

  • Yomi

    Todd, thanks for sharing this. I am currently working for a not-for profit in Africa just because I want money to sustain me but I have always had the thought of owning my law practice someday. The take home package for young lawyers is usually on the low side plus my current employer owes me about three months salary. The usual worry is the fear that I may fail by not having the means to sustain my needs. But as it is now, even the work that I have isn’t fetching me anything. I want to practice in the corporate and commercial law area and may be maritime law. Is it possible for me to do these three? and what further advice do you have for me?