So, you want to start a law firm in California, eh? Good for you! I’ve been there and from my experience, I can tell you it’s a heck of a lot of fun, a heck of a lot of work, and (if you do it correctly) immensely rewarding both personally and financially.
Let’s talk about the process, shall we?
First of all, if you’re reading this, there’s at least a part of you that has already been considering this path. Maybe you’ve been dissatisfied with your current job for years. Or perhaps the pandemic taught you that working in isolation is good for your soul.
Whatever the reason, I know that the mere thought of starting your own law firm can be at once overwhelming, exciting, scary, and exhilarating.
In this article, we’ll give you a checklist of the things you must do to start your own law firm in California. Of course, you’ll want to do more detailed research once you choose a path, but this is a good place to start.
How to start a law firm in California: a checklist
Once you actually dive into starting your own law firm, you may feel like there are more things to get done than you can possibly handle.
One good way to wade through the process is to create a checklist of things that you do before you open your doors. Here are our top suggestions:
Step 1: Read the rules
As with anything in the law, a myriad of rules and regulations exist to dictate how you go about starting your own law firm.
Fortunately, the California State Bar provides guidance in this area. Since they are the body that will oversee your new law firm, you’ll probably want to pay close attention to their advice.
That link will also give you an overview of all the paperwork you need to file to start your law firm.
Step 2: Pick a practice area
Do you know what kind of practice you’re creating?
The truth is, there are areas of the law that are better suited for solo practitioners or small practice groups than others. If you’re not yet committed to one practice area, check out this list of the best practice areas for solo practitioners.
Before you decide to become a generalist, give some thought to the pitfalls of that type of practice.
While it may be tempting to take every matter that comes your way, that may not be the best decision from a business perspective. Law is complicated, and you can only be truly great by specializing in one area.
Step 3: Write your business plan
Business plans aren’t easy or quick to create, but they are important to the ultimate success of your new law firm. Practicing law and running a successful law firm are two entirely different things.
Writing a clear business plan will force you to think about things like funding, marketing, and goal setting. You’ll map out your growth plan and do research that shows you the problems you’re likely to encounter along the way.
And I know you didn’t learn how to write a business plan in law school. That’s ok.
Fortunately, there are several free law firm business plan templates available online.
Step 4: Choose a business entity
In California, there are two principal types of business organizations available to law firms: a limited liability partnership and a professional law corporation.
In addition to studying the liability structures and risks associated with each, you’ll want to consult with an accountant to discuss the tax implications of each business form.
We’re not going to go into the details of these business entities here. Add this to your list of things to research in greater detail.
Step 5: Don’t forget marketing
The mistake many lawyers make when they start their own firm is that they overlook the considerable effort it takes to bring clients to their practice.
Unless you have clients following you from your old firm, you’re going to have to put maximum effort into this unbillable part of your practice.
Even if you do have lots of happy clients right now, you’ll probably have a lot less success bringing them along to your new firm than you expect. People are fickle and marketing is hard.
The good news is, there are highly useful resources available that are specific to law firm marketing. Those should bring you up to speed quickly.
That said, don’t forget that the State of California has very specific rules about advertising and solicitation.
Step 6: Choose tools and services that enhance your new practice
Unless you have an endless stream of money coming into your new law firm, you’re going to have to find ways to automate things that your old firm may have handled the old-fashioned way.
Fortunately, you’re living in a time when many cumbersome processes can be handled quickly and efficiently online.
Things like court filings, service of process, case searching and tracking, calendaring, UCC searches, and property research – just to name a few – are all available with a few clicks of the mouse.
Look beyond legal software, too. You’ll be running a business, not simply practicing law in your own office. Assets like project management software, email marketing systems, and team communication tools keep your firm running smoothly.
Step 7: Choose the best team for you
It’s tempting, when starting your own law firm, to go it alone. It can’t be that hard to fill every role within a firm yourself, right?
Wrong. Take it from me.
To the extent you’re able, you should surround yourself with the very best people available to you.
Even if you can’t afford to hire today, it’s never too early to start fostering relationships with people who may become critical team members in the future.
You can fill in gaps with freelance legal support and/or a good virtual assistant.
Step 8: Don’t forget insurance
None of us wants to think about malpractice claims, but all of us should – especially when you’re just starting a new firm and are overwhelmed with new-business-tasks.
Moreover, you’re now in charge of things like workers’ compensation insurance, disability insurance, life insurance, etc.
The California State Bar provides great resources for finding insurance policies. Skipping this step can destroy your business, so get your portfolio in place early and review it often.
Congratulations on your decision to start your own law firm.
While we understand this isn’t an exhaustive checklist of everything you’ll need to do to get your new business off the ground, we hope it helps and we wish you the best in your new endeavor.
Here’s one last tip before you go: stay open and keep learning.
The legal world changes fast, and staying relevant is one of the big challenges you’ll need to tackle. Keep reading, listening, and networking. Those habits will help you keep your business and your legal career thriving.