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Hanging Out Your Own Shingle

Introduction: Starting Your Own Firm

Starting your own firm can be fun and profitable, but it takes a lot of work. What's more, you'll have no institutional support: you will be starting things on your own, from ground zero. As a consequence, starting your own firm can be frightening. In some ways, you don't even know what you don't know. This article was written by criminal lawyer Raleigh But it can also be exhilarating. Even if you aren't a born entrepreneur (I am not), building your own business, being your own boss, learning how to do things without a lot of constraints, and making your own hours are pretty fantastic parts of the whole "Hanging Out Your Shingle" process. Given the state of the economy, more and more lawyers - from associates at BigLaw who've been laid off to recent graduates from law school - are finding it difficult to find jobs at established law firms. In addition, the public sector and non-profits are also pulling back on hiring, or becoming more stingy with salary and benefits. Starting a law firm is one way to create your own job. To be sure, starting a law firm has its own problems, including the problem of competing for business in a down economy. Even in a good economy, a solo practice by its very nature guarantees nothing. The money you earn comes from clients who hire you. A solo practice offers no steady paycheck. That said, whether out of necessity, or because of the appeal of building one's own firm, many people do venture out on their own. I've written this webpage to try to give some quick information to people who are "hanging out a shingle," particularly for those in the Research Triangle of North Carolina. None of the information here is verified: meaning, if you disagree or find errors, feel free to shoot me an email and I will correct or clarify. I'm also by no means an expert. I'm simply someone who has been able to create some success in a brutal economy.

Words of Encouragement

Technology, the Web and social media make starting your own firm more cost effective now than ever before. While antiquated ethics rules forbid you from directly contacting (soliciting) people who may need your services, the Web and search engines make it easy for those people to find you. When legal ethics rules relaxed restrictions in marketing in the 1980s, the most successful marketing was done by direct mail, television and radio advertisements, bill boards, and print ads. All of these things cost money. Even direct mail, which is the least costly, will cost at least $1 to reach a single prospective client. But here again the Web makes legal marketing much less costly, and at the same time less intrusive and more professional. The good news is that in most cities - including most locations in North Carolina, with the possible exception of Charlotte - lawyers have been slow to move into web marketing. There's a lot of room for growth. In addition, most lawyers are not particularly technically savvy, which means that they rely upon established, professional services in the legal field - think places such as Martindale-Hubbell. The result has been websites that all look the same, rely upon outdated Web technology, and, worst of all, are not optimized to score highly on Google. This is particularly true of solo practitioners, a surprising number of whom do not have even a basic websites and use email address that end in @earthlink.net, @aol.com, @yahoo.com, or @hotmail.com. You have - given the fact that you've grown up in a world where the Web is a fact of life - more experience with these tools than 9 in 10 lawyers/solo practitioners. Of course, mere familiarity with Google, Facebook, Twitter, and the like is not enough, which is why, if you fully understand how to use them, you can do better than others in your cohort. You need to understand how to use these services as marketing tools to help you build your firm, and attract clients.

Words of Reality

This is hard work. A website like mine, which is my central means of marketing, did not just grow, fully formed, overnight. It took months full of long workdays. In addition, running your law firm itself requires additional hard work. Since you are the firm and the firm is you, there's no one else to rely upon to get things done. If you're fortunate to have a partner, you can ease the burden. And, even if you don't have a partner, over time you'll meet other lawyers who can help out in a pinch. But at the end of the day, the firm's success depends upon you. In addition, you need to be prepared for setbacks. Even in criminal law, where clients generally pay in flat fees at the start of the cases, you won't necessarily have money rolling in from the first day. You and your family (spouse, partner, parents) should realize that you're building something for the long term. While you're building for the long term, you should have immediate goals. I created a 12-month business plan, which I quickly out-grew. But the plan helped me focus on bringing in clients and revenue. At the start, I merely wanted to cover expenses. I did better in the first six months than I planned to do all year. But the plan would've been helpful had I fallen on tough times to keep me focused. You should realize that the market is brutal. The economy has hurt everyone, including people who are in need of legal services.

Words of Advice

You may be tempted to offer a whole range of legal services, everything from real estate law to family law to general civil litigation to bankruptcy and criminal law. This would be a mistake. While there may be a few clients you'd turn away by limiting your practice to one or two areas, in the long run you will do much better if you focus your practice for two reasons. First, at most you can effectively market and dominate marketing in one or two practice areas. Second, there's no way you'll be effective - or be taken seriously - as a good family lawyer who also does bankruptcy, property, criminal, general civil litigation and so forth. Similarly, you should focus your practice geographically. Some attorneys feel the need to drive all over creation. While it depends on the type of law you practice, you should consider whether taking a case in Alamance is worth the time you'll spend away from your home county of, say, Wake. You should also develop good relations with other lawyers, and cultivate better relations with high quality lawyers who might be either references, sounding-boards, co-counsels, or maybe even employers, if you decide you don't like the solo thing. I located other criminal lawyers by spending time watching criminal trials in between the time I took the Bar and was licensed. If you're good at networking, then join a few organizations and go to events. I prefer a one-on-one approach. In addition, if you become a source of referrals for other lawyers, they will especially give you time and help. Contact criminal lawyer Raleigh.

Helpful Hints

1. Get Your License
   1. Don't spend your bar summer worrying about getting a job.
   2. Pass the bar.
   3. It's hard (and illegal) to make a living as a lawyer without a license. So pass the bar on the first time. Avoid work if possible.
   4. Seriously: have your wife, husband, mother, father, girlfriend, boyfriend or other non-lawyer friend call me if they think you should work, or do a serious job search, and also prepare for the bar. I will explain why studying for the bar is your full time job. The bar isn't hard, there's just a lot of material which takes a lot of time to learn. And, aside from the LSAT, it's the most important Law School test. Doing poorly on a Contracts exam will not prevent you from practicing law (or even from being an awesome business contracts lawyer). Failing the bar will mean spending your Christmas season studying for February's exam.
2. Create a Legal Entity
   1. Decide on a PLLC, PA, etc.
   2. Decide on a name. I chose The Chetson Firm because I plan to grow. If you plan to keep it personal, then The Law Offices of Your Name may work.
   3. After you get licensed, you'll need to request certification from the State Bar (see FAQ - Professional Organizations) about the status of "members" of your PLLC or PA. They will send you a certification.
   4. Send the certification you receive from the Bar along with your Articles of Incorporation to the Secretary of State.
   5. Cost of the process is $160 (2009 figures). Time = Approx. 2 weeks.
3. Set up Banking Accounts
   1. Operating Account is a regular small business account. You'll need Articles of Inc. returned from the state, and an IRS Employer Identification Number which you can get online.
   2. Trust Account is where client funds go. You'll need your bar license or bar card.
   3. Cost = some money to deposit into the operating account, the trust account can be opened with no funds. Time = 1 hour. Hint: If you are using a major bank, set the trust account up at a major branch (Downtown Raleigh, Durham, etc.). Smaller branches don't often set these up and get very confused.
4. Website
   1. If you're savvy, you can do this yourself. This may be the most vital way you attract clients. Consider investing a lot of time in planning a web strategy. Avoid out-of-the-box solutions provided by Martindale-Hubbell and other law-oriented websites. They're awful.
   2. Buy a domain name - yourname.com. At GoDaddy, these cost $10/year. I own 40, but you need not go that far.
   3. Get a good hosting service such as Hosting Matters or Host Gator. At $10/month, this is cheap.
5. Cell Phone & Google Voice
   1. Get a good cell phone on a good network. I dropped AT&T and now use Verizon Wireless because my AT&T/iPhone combination was dropping too many client calls in mid-conversation.
   2. Considering using Google Voice for as your public number. Among the nice features are the ability to route calls based on the caller (which helps you avoid certain calls, or unknown callers based on time) and a computer transcription service, which comes in handy in screening calls if you're frequently in court/meetings.
6. Email
   1. Avoid using @hotmail, @earthlink.com, @gmail as the public face of your email account. Better to set up your Web/Domain so that yourname@yournamelaw.com points to your GMail or Hotmail account.
7. Letterhead/Business Cards/Logo
   1. I spent more on this than on my furniture (which I bought used). Why? Many clients may never see your office. But they will see your business card and letterhead. Get your branding done right from the start.
   2. Use a place like www.VistaPrint.com to print business cards inexpensively.
8. Paperless Office
   1. Laptop - Nothing fancy: I have a MacBook.
   2. Backup - Get some sort of device and back your data up daily. Don't lose client files.
   3. Printer - Avoid the cheap scanner/fax/printer all-in-one machines. They break and the cartridges really add up. Buy a refurbished HP Laserjet for $100 - $150 on eBay. A cartridge will cost $100 in addition, but will last for 9 months.
   4. Scanner - I recommend a Fujitsu ScanSnap S1500. Cost: New $350.
   5. Copier - With the a good scanner and a good printer, you can make do. I don't need to copy frequently, but when I do, this works fine.
   6. Fax - Lawyers still love to fax. I use electronic fax services such as eFax or GreenFax. With a scanner and a printer, this electronic faxing system works great. Cost: Approx $100/year.
9. Office Space
   1. It's cheap these days.
   2. Share if you can't afford your own.
   3. Don't go overboard. Decent location, professional looking.
   4. Many clients may hire you without ever visiting your office.
   5. There's plenty of used office furniture around that looks great.
10. Legal Research
    1. Google Scholar now has a case search feature that's pretty good.
    2. Statutes are available online. North Carolina General Statutes.
    3. The North Carolina Bar Association has CaseMaker which may be useful.
11. Join a Few Associations
    1. For the Plaintiff Bar and Criminal Defense Bar there's North Carolina Advocates for Justice. Join the sections relevant to you, which have email listservs where real questions are asked and answered by fellow lawyers. Very helpful.
    2. The North Carolina Bar Association is a general purpose voluntary association (not the same as the State Bar).
    3. Local bar associations may be worthwhile.
    4. Many of these groups offer free or reduced rates for first-year lawyers.
12. Taxes
    1. The self-employment tax is approximately 45 percent. Ouch.
    2. Talk to an accountant about filing provisions. If your spouse works as a salaried employee, you may avoid filing quarterly under a safe harbor provision. You will still need to put money aside to pay your taxes at the end of the year.
    3. Save receipts, document mileage. Talk to an accountant about the extent to which expenses can be "written off".
    4. An accountant will cost about $500 a year. Well worth it.
13. Links to Helpful Websites
    1. The Lawyerist - very helpful site run by solo-practitioners, focused on a paperless office and on marketing your solo practice.

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About the Author

Criminal Lawyer Raleigh Damon Chetson owns his own law firm in Raleigh, North Carolina.

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