Three Questions I Answered Before Starting a Firm

When I told my non-lawyer friends that I’m opening a law firm, they were pretty impressed. Parents, family members, and friends were all very excited and full of congratulations. Luckily, I have lawyer friends as well. They were the ones who asked the hard questions. Those questions tested my plan and my drive. Every attorney I spoke to asked me pretty much the same questions I had already asked myself numerous times.

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What Will You Do When You Don’t Make Any Money?

This is one of the first things a lot of people think about when they decide if they want to go out on their own. For me, it was a simple matter of math. I’ve kept a budget since my junior year in college. Some months I’m under budget, some months I’m a little over budget, but it tends to even out. So I sat down and did the math.

The first step was determining which expenses could be cut if necessary. Then I looked at what my monthly budget needed to be after cutting those expenses. Using that amount, I determined how much money I would need in the bank before leaving my job. I assumed an initial law firm investment of $3,000 and no income for six months. This means if I make no money for the first six months of owning a law firm, I will be able to pay my bills, eat, and keep a roof over my head.

Six months is my estimate for the amount of time it takes to start bringing in money. Most of the lawyers I spoke to said to budget for three to four months of no money. One attorney recommended a year. Of course, I’m hoping we can bring in clients right away. But I’m not counting on it. I call this policy hopeful pessimism.

What Will You Do When You Don’t Know How to Handle Something?

In my opinion, this issue is almost more important than the money issue. The money issue only concerns me and those around me. This issue concerns my duty of zealous advocacy for my clients. The short answer is simple: CLE publications and mentors.

I’ve already sat down with half a dozen or so local attorneys and picked their brains about various questions I’ve had. Through these attorneys, and others, I’m creating a network of helpful mentors. I know which people I can call for help on various issues.

In the beginning, I will have a lot of questions. I don’t want to pick up the phone every time I’m not sure how to handle something, or want a pointer. That’s why we are investing in some CLEs. Specifically, we are using the Pennsylvania Bar Institute. They’ve got some great introductory books with sample forms, relevant case law, etc. It’s pretty cheap to just buy the materials for a CLE and audit the course. Definitely a worthwhile investment.

Do You Have the Dedication to See This Through?

This was the toughest question for me to answer. I couldn’t turn to math, or trust my ability to network and research. Instead, I had to sit down and decide if I have what it takes. I believe I do. I know I can work hard and put in long hours. I know that I can achieve some ambitious goals when I put my mind to it. But have I judged myself correctly? That’s what keeps me up at night.

Ask me in a year.

Starting a Law Firm

  • http://www.teeplelaw.com/ Michael Erdman

    Good luck Josh! You seem like a thoughtful guy – I bet you’ll do great.

    Michael

  • Uzo Akpele

    When i was starting out, in addition to mentors, I also attended a lot of CLEs, used the county law library a lot, as well as just looked for free stuff on the Internet. I was also part of listservs where I could post a question and have colleagues post replies. Sometimes I called the authors of books — cold. Some of them gave me a little time and explained stuff to me.

    Don’t worry, go ahead, you will do fine. Goodluck.

    • http://adamlillylaw.com/ Adam Lilly

      The local law library was a big thing for me, and part of the reason I chose the town I did. They have a really good Westlaw subscription, complete with access to all the best treatises in my fields.

      • http://lawyerist.com/author/joshcamson/ Josh Camson

        Please tell me you relocated for access to a better law library. That would be epically nerdy. Love it.

        • http://adamlillylaw.com/ Adam Lilly

          Not quite that nerdy. I wasn’t going to open in the town I was living in at the time, so when evaluating my options in the metro-Atlanta area (looking at about 40 suburbs), the availability of a quality law library was a requirement… along with a local Chick-Fil-A. Now I’m 1/3 mile from free research (beyond Fastcase), and 2 miles from lunch.

          Of course, the main criteria I used were demographics (population, growth trends, median income, income distribution, etc) and the “community feel” of the local bar association, both of which are outstanding here.

  • http://brucegodfrey.com/ Bruce Godfrey

    “What Will You Do When You Don’t Know How to Handle Something?”
    “this issue is almost more important than the money issue.”

    Uh… almost?

    If you don’t make money initially as an attorney, you may be able to make some cash doing something else while you grow. But if you don’t care MORE about doing work properly than you do about “the money issue” you will not long survive and, as rude as it is to say, not deserve to survive as an attorney. At some point in your career, you will probably work and not get paid at least once (by choice or by crook); you will not be discharged from the duty of competence in that case.

    Money will come in due course. As you are growing professionally you will come to spot other attorneys who are making more money than you, but who engage in shady practices. Odds are they won’t last.

    Out of my graduating class at Maryland Law of about 163 (1994), there have been at least 3 disbarments or permanent suspensions, two of them of attorneys whom I considered substantially smarter than myself. One forged an affidavit in federal court, one got involved with the real estate flipping scandal and left town and one just outright defalcated client funds from escrow (this one had been a CPA, actually.) Let them be a cautionary tale.

  • http://www.linkedin.com/in/michelleytalbert Michelle Y. Talbert

    Congratulations and thanks for sharing. I’m leaving practice to start my own company coaching lawyers. Your story is inspirational and you’ve asked the same questions I mull at night, too. Look forward to hearing from you in a year! (Although, I believe we’ll both be just fine.) Best to you!

  • http://dobinlaw.com/ Marc Dobin

    Josh – I have now started two firms. While my thinking was not as organized as yours, ultimately the question came down to “where will I be most happy?” When I answered that question “away from where I am now” all the other answers fell into place. I stick to what I know or what is an offshoot of what I know. I get money up front from most clients, except the known corporate clients. I keep my costs down, where appropriate. And I figured out very quickly that, with my business, having an associate is very helpful.

    Have fun, do good things for your clients, and the money will follow.

  • Justin

    I am interested to know how your six month estimate went? Situations have me planning to open sooner than anticipated with about a 4 month “no income” savings and perhaps access to loans for another 4-6 months. I am a newlywed with several expenses, but cutting down where possible.