Speed Up the Process of Starting Your Own Law Firm
The legal market is seeing an unprecedented number of mergers, acquisitions, and lateral moves of law firm partners. In this fast-moving and dynamic situation, it is only natural for increasing number of experienced lawyers to explore the idea of starting their own firms. Sometimes this idea comes about involuntarily, as law firms are increasingly shedding partners, and those partners look to start their own practices. More often, however, the decision to start a new practice is a voluntary one.
Rainmaking for Lawyers has since 2006 helped individuals and teams of lawyers launch new firms. Most of our clients have been attorneys with more than eight years of experience. Many have been dissatisfied by how their current firms are structured and believe that they will be better be able to serve their clients if they exercise more control over the reins of a law firm. Sometimes the decision to start a new firm is motivated by a desire to keep more of the revenues that the lawyers generate or a desire to work with friends and avoid certain business partners. While every situation is different, many of our clients explored starting a law of firm of their own as part of an overall effort to structure their lives differently and exercise more control over it.
Who Have We Helped?
Many lawyers are laboring under the misconception that starting a new firm is reserved for refugees from large law firms. But, as detailed below, that has not been our experience.
In 2014 we worked with lawyers who were exploring leaving the firm where they all worked. They had engaged in confidential conversations among themselves but weren’t sure whether they could form a viable firm or how to figure what steps they should take to find out. They also weren’t sure how many of their colleagues would join them. Over the course of several weeks, we met with the
lawyers as a group to explore their vision for a firm. We guided them through the process of deciding what kind of firm they would want and building a financial plan that showed that the firm could be financially successful. The firm launched in the second half of 2014.
A lawyer who had never worked at a private law firm wanted to start on a new path. He had certain amount of real-estate related experience but wasn’t sure how that would translate to for-profit firm. Our first task was helping this lawyer develop a strategic focus. His initial inclination was to start a firm that provided a range of legal services to the community that he previously served. After working with us, we developed plan that leveraged his trial and real estate experience to serve business litigation clients. We then helped him build that firm, which continues to grow to this day.
In 2014, we were approached by a transactional lawyer who was having problems with his business partner. They had radically different visions for the firm’s future and one partner felt that her contributions to the firm far exceeded those of her business partner. We advised the lawyer about the steps involved in negotiating an exit from the firm. Two months later, the partners went their separate ways and our client started her own practice.
What Do We Do?
The process of deciding whether to start a new law firm or to spin-off from an existing one generally unfolds in two steps. First, it is necessary to undertake a feasibility study—what kinds of clients will the law firm serve, how will the firm generate revenues, and what role will the respective founding partners play? It is not uncommon for some lawyers to drop out of the process or for the vision of the firm to change dramatically during these discussions. If one or more lawyers tentatively conclude that the new firm would be viable, the second phase of the discussion focuses on implementation. This includes developing a marketing plan, a detailed compensation structure, and a tentative calendar for launching the firm. Depending on the availability of the lawyers, it generally takes 2-4 weeks to go through the feasibility study and, if applicable, an additional 4-6 weeks to go through the implementation phase. It is possible to do this faster.
Because of the extreme delicacy of discussions relating to starting a new firm, especially if that would involve spinning-off from an existing firm, lawyers often prefer to meet in a non-public place. Yes, we do make house calls.