Starting your own firm today does not need to be the terrifying undertaking it may be once was. The barriers to entry have come down. Lawyers are taught to be risk averse and are generally not risk takers by personality, but the way that legal services are bought and can be delivered now means there are more opportunities than ever for smart, entrepreneurial lawyers to be rewarded – in terms of finance, value building, teamwork, politics and lifestyle.
Lawyers fear being distracted from ‘the day job’ – that is, not being ‘on the tools’, delivering legal advice and earning fees. When setting out you need to keep this front-of-mind; sales are critical and fee-paying clients are the life-blood of any professional services business. Your adventure won’t last long if you ignore what earns your business revenue. There are today though, particularly in key legal markets across the world, many high quality suppliers to law firms which give you the opportunity to seek help and outsource when time and economics mean that it’s the best option.
Our top ten priorities are inevitably subjective and are certainly not exhaustive. We have, on purpose, made 5 of the top 10 priorities business development related to emphasise the importance we put on sales and the business of the firm.
The Top 10 priorities when setting up a law firm
1. Write a business plan
You mustn’t shy away from this. Therefore embrace the challenge. It could well be that you will need a business plan to meet the needs of your regulators, when seeking quotes for professional indemnity insurance, to recruit other lawyers or for getting funding from a third party. Most importantly, however, a business plan is your management tool that will help you research and think through all the critical issues of running a successful business. Issues such as costs and revenue projections, service offering, staffing needs, IT & operations, target audience, market trends & competitors and marketing strategies all need to be considered and should form part of your business plan.
A business plan is something that will evolve as the business grows and that you will constantly refer to and tweak. So dedicate time to planning your business and use this document as your road map to creating a successful firm.
2. Talk to others who have done it
This is invaluable. Talk to lawyers, and other professionals, who have started their own firms and to other entrepreneurs in other industries. And absorb. It is important to speak to others in your market but also in other markets around your jurisdiction and globally. You will be surprised how helpful people are and how you can take the opportunity to learn from their mistakes and get useful introductions.
Not only will you glean a raft of useful insights for running a successful firm, this process will also help you expand and enhance your network. As we will discuss later, expanding and managing your network – both direct and online – will be critical to winning referrals and new business. So use this researching time to start building your network.
3. Get your compliance and operational ducks in a row
You will need to be licensed, insured and compliant in all aspects from the day you hang out your shingle. This may include registering or otherwise preparing and adopting policies for dealing with data protection, anti-money laundering and corruption, client accounts, VAT or the equivalent and your terms of engagement. You can find assistance in doing this, we did. One tip from us, choose your bank carefully, a good bank can be a real help and vice versa.
4. Sort your IT and premises platform
You don’t necessarily need a long term premises and IT solution from day one, but you do need your lawyers to be able to do their jobs. Your premises options will of course depend on what type of firm you are and what work you’re doing and for whom. Think through this carefully – bad decisions on premises can be expensive. Likewise, spend time sorting your IT and practice management platform. We were stunned by the number and quality of tech options there are out there now to deliver your services from.
5. Surround yourself with quality people
Like premises – bad decisions on support and recruitment can be expensive and potentially fatal for your firm. Law in 2017 is still a people business and clients pay for a good service. Be rigorous on getting quality, from your suppliers as well as from your lawyers and other staff.
6. Choose your name and brand and plan your business development
Although people buy from people, brand is becoming ever more important to the buying generation. Differentiation for lawyers is also key, particularly in crowded legal markets. A good name and brand will not only help you attract clients but also, and arguably of equal importance, it will help you attract talent. Planning your business development activities is also crucial. As well as imported clients, a primary source of your work will be word-of-mouth referrals from former colleagues, other contacts and people who find you online. Your business development activities in these early days, therefore, must focus on making it as easy as possible for potential clients and referrers to understand and trust what you do (your credibility), to find you online (your visibility) and to talk about you to their contacts (your reputation).
7. Clarify and be prepared to articulate your specific area of expertise
“Expertise” is at the heart of being credible and gaining another person’s trust. Trust is at the heart of all successful business relationships, upon which your firm will rely. So whether it is related to a legal discipline, industry sector or geographic area, be prepared to clearly articulate your specific area of expertise. This should also form a major component of your business plan. So consider carefully what you bring to the market and be prepared to articulate this clearly whenever you speak to your contacts.
8. Build the infrastructure necessary to be visible online.
Effective business development is not only about tapping up your existing contacts, but also connecting with an audience who need your services, but don’t yet know you. As a new firm, people need to understand the value you bring and how your services meet their needs. Both your existing and new contacts will expect to find this information online. Zero or poor online visibility won’t stop you winning work, but it will make it unnecessarily harder. So, as you set up your firm, your marketing priority should be to ensure the following online visibility building blocks are in place:
- An attractive professional looking website
- An informative social media profile – especially on LinkedIn & Twitter
- A professional headshot – to be used on your website and social media profile
- A biography explaining who you are and the value you add
- A blog through which you can talk about issues related to your area of expertise
9. Establish your credibility by starting to write a blog on topics related to your area of expertise.
We have mentioned that being credible is key to building trust and that trust is key for developing effective professional relationships with clients, referral sources and other markets.
The best way to establish your credibility is by helping to educate your audience on issues that are of interest to them and in which you are knowledgeable. Educating your audience demonstrates your interest and understanding of these issues and your desire to help your clients.
There are a wide range of tools you can use to do this, from writing books to producing videos, but the best and most cost effective route initially will be to write a blog accessible via your website.
10. Actively manage your network – both personal and online.
Finally, you have written your business plan, set up your firm, clarified your unique service offering and created the building blocks to being visible online. Now you need to get out there, actively manage your network and promote yourself.
Face-to face meetings, coffee chats and attendance at relevant events are all part of this, but so is connecting with your target audience online. To do this you could join relevant LinkedIn Groups, or follow influencers on Twitter, and engage in their debates. Remember you are trying to develop a positive relationship so is it important that you comment and share other people thoughts as well as contributing your own ideas.
Summary & Conclusion
Technology, new flexible working practices, access to skilled advice and personal client relationships all make setting up a successful firm not the daunting task it once was. The legal market is full of smaller entrepreneurial firms providing high quality advice to clients who like the personal touch.
For the entrepreneurial lawyer, they are able to do the work they want with the clients they like without the bureaucracy of a larger firm.
This does not mean it is not challenging, but by following the recommendations outlined above we feel you are more likely to succeed in your aims. Our final words of advice are:
- Have confidence
- Never compromise on the quality of your lawyers or advice
- Manage costs effectively so you can compete on price and be profitable
- Be able to deliver the legal service from day one.
First published by the IBA’s ‘Closely Held and Growing Enterprises Committee’.
Nigel Clark and Quentin Vaile – December 2016
Nigel Clark co-founded Peregrine Law in London in 2016. Peregrine Law specialises in assisting corporate clients across borders, with a focus on the sub-$50m deal space. Nigel was formerly a partner of Minter Ellison in Sydney, London, Beijing and Hong Kong.
Quentin Vaile has spent 25 years in the management and delivery of professional services, the last 15 years of which have been within the legal sector. He has held senior management positions at a large international law firm as well as a global network of independent firms. His prime areas of expertise are law firm marketing & business development, relationship management and referral generation.