Seven Steps to Going Solo Every lawyer—at some point—considers opening their own law firm. Running your own practice means your name is on the letterhead. There are no partners to placate, and all the proceeds go directly into your pocket. It’s every lawyer’s dream. However, there’s more to running a law firm than practicing law. In addition to being a diligent lawyer, you need to be business-savvy, and corporate acumen is conspicuously absent from most law school curricula. You need a business plan that will help you start a strong law firm. Join Clio’s Lawyer in Residence, Joshua Lenon, as he looks at the seven steps every lawyer should take before opening their own law firm. Each step will help you focus your efforts and improve your firm’s crucial first year. Learn about: Managing overhead expenses Business development tactics for first-year law firms Legal tools for research and templates Lessons learned from successful law firms

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How to Start Your Own Law Firm
Seven Steps to Going Solo

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Joshua Lenon
• Lawyer in Residence at Clio
• Attorney Admitted in New
York
• @JoshuaLenon

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Agenda
• Seven Steps to Opening a Law Firm (45 minutes)
1. Plan Ahead
2. Pick Only One Area Of Law
3. Pick The Right Area Of Law
4. Build A Referral Network
5. Build A Website Immediately
6. Join Organizations And Listservs
7. Sell to Clients
• Further Resources (5 minutes)
• Questions (10 minutes)

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Intended Audience
• Associates in Law Firms
• Solo Lawyers
• Law Students

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Associates in Law Firms
• Entering classes do not know the requirements of
law firm structure
– Regulatory requirements
– Ethical duties
– Business needs & market pressures

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Solo Lawyers
In 2016, 23% of surveyed lawyers
would start their own law firm.
Source: Robert Half Legal, May, 2016

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Law Students
900 law school graduates of 2015
started their own law firms.
Source: NALP

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PLAN AHEAD
Seven Steps to Opening a Law Firm

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Law firms are easier & cheaper
to open than ever.

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3 Areas of Law Firm Planning
1. Regulatory requirements
2. Ethical duties
3. Business concerns

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Regulatory Planning Steps to Opening a Law Firm
1. Business Plan
2.Business Structure
– DBA, LLP or PC,
Partnership
3. Business Entity Filing
4. Banking
– Operating
– Trust
5. Insurance
6. Record Keeping
Strategy

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Ethical Duties for New Law Firms
• Diligence (MPRC 1.3)
• Communications (MPRC 1.4)
• Confidentiality (MPRC 1.5)
• Safekeeping property (MPRC 1.15)
• Responsibility of Partners & towards non-lawyer
assistance (MPRC 5.1 &5.3

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Business Concerns
1. Methods of billing & payment
2. Budgets & “rainy day” funds
3. Overhead

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Overhead
The primary costs for running a law firm are employees.
• Seek technology solutions over services
• Use services before employees
• Hire part time & virtual employees before full time
• Hire full-time employees when you hit the growth curve

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Law Firm Growth Curve
You’re losing business because you can’t keep up
with demand
You need/want to focus on certain aspects of your
business rather than struggling to juggle everything
How to know when to hire your first employee
by Charlene Jimenez in Business Entrepreneur - February 21, 2012

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60% of law firms
spend 1-3.99%
of total firm revenue
on technology
24% of law firms
spend 4-5.99%
of total firm revenue
on technology
Source: ILTA/InsideLegal Technology
Purchasing Survey 2016

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Investments in technology
lead to rising revenue.

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3.6%
1.1%
6%
-0.7%
Mid-size AMLAW Second 100
Law Firm Revenues in Q1 2016
Tech Invesment Revenue
Source: PeerMonitor Q1 2016
reporting

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Professional Services
• Accounting software
– Xero (xero.com)
– Quickbooks Online
• Accounting services
– Kahuna Accounting (kahunaaccounting.com)
– Bench Accounting (bench.co)
– JurisBookKeeping (jurisbookkeeping.com)

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Back Office Help

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Back Office Help

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Attorney Aid

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Recommended Staffing Expenses
Firms should limit staff salary & benefits, not
including attorney draws: 45% of total revenue
Outside professional services (e.g., accountant or
management or marketing consultants): 2%
Source: Ed Poll, LawBiz

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Marketing Overhead
Law firms should spend
2-5% of annual revenue on
marketing & business development
Source: Ed Poll, consultant and owner of
LawBiz.com

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Yes, there’s math.
Desired Annual Billings X 3.7% =
Your Annual Marketing Budget.
Source: Dustin Ruge, How Much Should My Law
Firm Spend on Marketing? 2/19/15

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Real Estate Overhead
Most law firms spend more than 5%
of their annual budget on real estate.
Source: American Lawyer, “What Ever Happened to
'Virtual' Lawyering,” 10/31/16

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Questions that Planning Answers
• What is the next unavoidable business expense?
• Is my professional liability insurance in place prior to
accepting clients?
– Does this insurance policy cover cybersecurity incidents?
– Are there cases that my insurance policy will not cover?
• Am I prepared for a records review?

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Are you personally prepared
for building success?

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PICK ONLY ONE AREA OF LAW
Seven Steps to Opening a Law Firm

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“General practice can
be malpractice.”

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Becoming known for an area of law makes it
easier for clients & referrals to find you.

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PICK THE RIGHT AREA OF LAW
Seven Steps to Opening a Law Firm

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The ”right” area of law is
one that both
inspires you,
and clients
willing to pay you.

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BUILD A REFERRAL NETWORK
Seven Steps to Opening a Law Firm

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Referral Networks
Lawyers are desperate to refer
good clients to smart lawyers.
Don’t limit yourself to
lawyer-only networks.

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BUILD A WEBSITE IMMEDIATELY
Seven Steps to Opening a Law Firm

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Online Promotion
Over 80% of buyers of professional services go
to your website to evaluate your capabilities,
regardless of how they may have heard of you.
Source: ICXLegal.com

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Apply these formulas to 2 activities
1. Traditional
Networking
2. Online promotion
How Clients Find Lawyers in 2015
• Relationships - 36.6%
• Web - 16.5%
• Offline Advertising – 5.6%
• Hired Same Lawyer Again -
2.4%
Source: How lawyers get found in 2015,
Avvo.com, 9/10/2015

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Traditional Networking Activities
1. Be a Referral Source
2. Public Speaking
3. Community Development
4. Build a Marketing Culture
Inspiration: The Business Guide to Law, Kerry
Lavelle

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6 Areas of Online Promotion
1. Blogging
2. LinkedIn
3. Effective websites
4. E-alerts
5. Online rankings
6. Ratings directories
Source: 2014 Alyn-Weiss National Marketing
Effectiveness Survey

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3 Website Takeaways
• Never spend more than $100 per month on a
website & URL.
• Use your law firm URL for email addresses.

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JOIN ORGANIZATIONS AND LISTSERVS
Seven Steps to Opening a Law Firm

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Organizations & Listservs
Orgs. and Listservs = instant expertise
& mentors.

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SELL TO CLIENTS
Seven Steps to Opening a Law Firm

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While lawyers are a great community,
THEY ARE NOT PAYING CLIENTS!

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FURTHER RESOURCES

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Recommended Resources for Starting a Law Firm
• Clio blog
– https://www.goclio.com/blog/
• Lawyerist blog
– https://lawyerist.com/topic/starting-a-law-firm/
• Attorney at Work blog
– https://www.attorneyatwork.com/category/startups/
• My Shingle
– http://myshingle.com/
• “GPSolo Guide to Opening a Law Office”
– http://www.americanbar.org/publications/gp_solo/2014/january-
february/the_gpsolo_guide_opening_law_office.html

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ABA Blueprint
http://www.abablueprint.com/

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QUESTIONS

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Thank You
Joshua Lenon
joshua@clio.com
@JoshuaLenon
Linkedin.com/in/joshualenon
1-888-858-2546
Colin McMahon
Linkedin.com/in/colinmcmahonclio
Support@clio.com
Support.goclio.com
www.youtube.com/user/ClioVideo