Wednesday, February 5th, 2020
By Gideon Grunfeld
Am Law 200 partners and other large firm attorneys are surrounded by helpers. When a computer glitch occurs, someone from IT visits your office. The billing department takes care of the collections process, so you rarely have to get involved. And some firms have an in-house kitchen with food delivered right to your desk. At some point, all these perks can become the ball and chain keeping you in the wrong job.
Time and again, we’ve seen attorneys sacrificing half their revenues and the control that comes with managing your own practice in exchange for the infrastructure offered by larger firms. Even when the draws paid out don’t match up to expectations, many large law firm partners overestimate the effort and funding required to create a new business.
As consultants to lawyers and law firms, we’ve seen that the reality of starting a firm is much less daunting than what you may imagine. Yes, you should expect a sharp decline in billable hours for your first year as you devote time to retaining clients, creating marketing materials, and hiring staff. But as you bring on new people and train them, you’ll be able to delegate these duties as you’re used to doing and focus on providing legal services. You don’t have to bill 2,000 hours or anything close to it to make a new firm financially viable.
To break out on your own, there’s no need to recreate the entire system you had at the big firm. Set up just the level of infrastructure you’ll require for the first year or so. Give yourself a few months to plan if you can, and don’t overspend on a more elaborate structure than you need to start practicing.
With the ability to outsource a huge number of functions, you can utilize the services of other entities for aspects of the business like accounting, payroll, IT, and branding. Beyond this, there are advisors who can speed up your learning curve dramatically. So, don’t give up a huge portion of your revenues by staying put or switching to another firm out of fear of the varied tasks involved in law firm management. It’s easier than ever to handle the logistical issues that arise when starting a new firm. And trust us when we say you won’t miss the lunch deliveries.