Whether you are thinking of quitting your services at a law firm or you are fresh out from a law school, the thought of setting up your very own law firm might seem challenging. There are some steps that you need to follow when it comes to branching out on your very own law firm. The steps are as follows:
A perfect business plan in place is one of the most important things that you need for setting up a law firm. The business plan outlines the initial years of the growth of the firm and also serves in the form of a roadmap for the future of the firm.Effective business is plans generally contain
four important sections and they are executive summary, marketing plan, management plan and financial plan. Executive summary section summarizes the plan by including general description of the law firm and the areas of law you are planning to practice.Business Plan
The marketing plan section focuses on demographics of the clients, present market scenario, the marketing devices that you will be using for gaining competitive advantage and the weaknesses and strengths of the competitors. The management plan section describes the person
who will be running the firm along with the structure of firm ownership. The financial plan section determines whether or not the firm possesses the capability of surviving. This section should include income statements, balance sheet and the projection of cash flow into the firm.
Once you are done with the completion of the business plan, your next step would be setting up entity. There are different business entities used for the law firms and these include General Partnership, Sole Proprietorship, Professional Association, Professional Limited Liability Company and Limited Liability Partnership. There are different requirement for such entities depending on the practice location. Therefore, it is necessary for you to check your local and state statutes. It is also necessary for you to get your EIN or Employee Identification Number. Post this, you can apply for licenses and permits which also tend to vary by location.
When starting a law firm it is necessary for you to keep in mind that malpractice insurance is important for your firm. Malpractice insurance is necessary for attorneys because around 5% to 6% of the private attorneys are estimated to face legal malpractice charges every year. Costs involved in litigation tends to be greater in comparison to the cost of malpractice insurance.
Marketing for your brand new law firm is very important in order to drawing in the target clients. There are a number of effective marketing tools and techniques available for the lawyers of the present times. Social media is one of the most effective marketing tools that you can use for marketing your services to a broader audience. Blogging, sending monthly or weekly newsletters, attending state and local conferences and other networking events can also help in marketing the firm. SEO, PPC, and Social Marketing Resource
Just like the other businesses, it is necessary for you to establish good relation with a financial organization or a bank. Try setting up a line of credit for your firm credit card or for taking out loan if required. You also need to open Interest on Lawyers Trust Accounts or IOLTA for handling client funds like trust payments.