GOING OUT ON YOUR OWN
PART 3: Starting your own firm
Did you forget something “Little Bird”?
At the beginning of September we embarked on the process and partook in the excitement of starting your own law firm. A wonderful undertaking and one we fully support.
There has been a lot to take in from then until now. From the mandatory legal requirements covered in Part One, to the practical business requirements covered in Part Two. Which, to summarise, consist of start-up costs (and what these entail – from office space to legal technology spend), to professional liability insurance going even further to suggest a way to obtain legal funding through Taurus Capital.
And honestly, from a practical perspective, we thought we were done. We thought that we had covered everything you really had to know to get your practice well and truly off the ground.
But we were wrong. And we admit that after doing some research, we may have overlooked a couple of aspects (that many entrepreneurs overlook when starting out). In fact, in an article titled What Percentage of Small Businesses Fail?, they stated that –
“20% of small businesses fail in their first year, 30% of small business fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business”.
And all because they may have overlooked some small but crucial things.
But don’t worry – we want to help you succeed. Not fail. So we are going to take a look at what these overlooked aspects entail. Together.
Therefore in an effort to ensure that you well and truly have all your bases covered (and don’t become 1 of the 20% of new businesses that fail), we thought we would embark on some of the most common things overlooked by entrepreneurs when starting their own small business.
And let us remind you, from this point on, you are not only a legal practitioner anymore. You are a business owner. An entrepreneur (as we discussed in the Part Two) and you need to think of yourself as that.
So what might we have overlooked?
While these are not “deal breakers”, they are important considerations to keep in mind if you want to hit the ground running.
So let’s get into it –
1. Start with a business plan
This may seem a little generic and possibly obvious, especially at this point. But you need to both practically and formally know where you are going, what you want to do and how you are going to get there.
You are also going to need to be able to summarise what your practices’ goals are and what your financial projections look like at the drop of a hat – so it is good to have this information readily available and at your fingertips.
A business plan will be particularly useful if you need to apply for funding as it will show that you have a long term vision and a solid strategy for your practice. Both good things.
Also business plan will ensure that you are able to track the progress of your business. And may need to be tweaked as your business expands, changes and develops.
2. Have an expansion plan
Talking about expanding, changing and developing, your practice may very well grow and expand in the future (which would be great). And you need to prepare for it. So it is advisable to play out these expansion scenarios in your head and most importantly – write them down.
It is also important to have a plan in place that will allow you to effectively manage the growth of your business. So, you should include how you will manage expected windfalls and how you plan to sustain your client’s interest and business.
3. Stay top of mind
Speaking of sustaining your client’s interest (and therefore their business), it is vital that you not only develop a strong brand presence but that you effectively undertake a sustainable and intelligent marketing strategy. Remain relevant by reminding people that you are out there and give them reasons for wanting to work with you.
A good marketing strategy can also help you understand what your client’s need are, whilst also educating them on what you can offer (and what is actually possible in the world of law). You can attract new clients with your intellectual and legal prowess and more importantly you can convince clients to remain with you, thereby securing repeat business (which is crucial for any business).
But the key here is remaining consistent.
A company like Branduo Creative Agency can help you navigate your way through the realm of branding, marketing and communications. They describe themselves as –
“a boutique consultancy that specialises in strategy, design and communications. We build brands that help their owners sell, stand out and succeed”
And that sounds like just what the doctor ordered.
But, we understand that when you are starting out, you may not have the extra capital to retain the services of a professional branding and marketing company (remembering that you can develop your own logo and therefore define your brand via Canva). Perhaps this is something you can consider building into your budget as your practice grows.
In the mean time you are also able to source other design and branding options through websites (and apps) such as Upwork, which utilise the skills of various freelancers at affordable rates. You never know.
4. Social media
Not everyone’s favourite thing in the world but your social media platforms (whether it be Facebook, LinkedIn, Instagram, Tik-Tok, or preferably all of them) will become your best friends whilst you are trying to get your name out there.
“4.48 billion people currently use social media worldwide. The average social media user engages with an average of 6.6 various social media platforms.”
And that is a lot of potential viewers that could see your content and be interested in what you have to offer.
Because part of staying top of mind is actually being present where your clients can see you, where they can engage with you and where they can get to know you. Social media allows that. Social media allows your clients to get in touch with you – at the tap of a button – and this further opens up your communication channels which is extremely beneficial to a new business.
Important tip! Remember that what you post on social media can easily bring your company into disrepute and end up chasing away clients instead of attracting them. It also doesn’t go away – once it has been posted it remains online for everyone to see. So tread very carefully! As Emma Sadleir Berkowitz of The Digital Law Company has said “If you wouldn’t put it on a billboard, don’t post it on social media”. Which should be your rule of thumb. Always.
5. Be adaptable and remain flexible
Since the start of COVID (yes again) we have all realised that you cannot really plan for absolutely everything. There are things that are just largely unpredictable. And we can all relate to that. But as a result of this unpredictability, we have all had to make changes and adapt to things like Zoom and Microsoft Teams meetings, online education, and social distancing.
Law firms were notably affected, resulting in a sink or swim, adapt or die scenario. And those that adapted, those that ensured they had the correct legal tech (like that offered by AJS) supporting them whilst they worked from home – not only survived but thrived.
So if there is one thing that this whole COVID ordeal has taught us it is this – be ready for anything and be able to adapt to unforeseen circumstances as they arise. Consider your approach on how you can be flexible with your work and working environment up-front, understanding that flexible working is likely to remain. So plan for it as best as you can.
6. Emergency Funding
Speaking of unpredictability, the future is always uncertain. And it is important to realise that your practice will not always be profitable. Unfortunately.
Just look at the last (almost) two years. Don’t fall into the trap of assuming that “everything will be ok”. Plan for everything and anything so that you don’t leave your practice in shambles.
To ensure that your practice can remain open, you need to start building up an emergency fund. Something that will help you during the dark times. You can start doing this by setting aside a percentage of your monthly profits as you go along.
It may not be possible in the very beginning, but it is something you need to keep in mind, learning from the mistakes of those who didn’t plan for emergencies like COVID. No one saw it coming. And as a result, no one prepared for the financial chaos that ensued.
So don’t repeat those mistakes. Prepare for the unknown like you are preparing for the Apocalypse.
7. Have an exit strategy
Yes, the whole point of the last few articles has been about starting your own law firm. But there is a certain inevitability that one day you won’t be running your own practice anymore. It could just be about retirement, or perhaps you decide to invest in a completely different company or maybe you end up selling your practice to someone else. Whatever the reason, the end result will be the same – you need to have an exit strategy. You need to have a plan for how you can let go of your business.
This exit strategy will give you a kind of peace of mind by ensuring that there is a sort of end point to work towards. An end goal. Having an exit strategy can also be attractive to investors or potential buyers because they can see your ‘roadmap”. They can see where your practice is going and how it will get there.
It may not be wonderful to talk about, considering you are just starting out, but there is always an end to things. No matter how much fun you may be having.
8. Have a support structure
This may seem completely obvious (again) but starting a new business is a scary and daunting task. And it is going to be stressful. So it is prudent to ensure that you have a support structure in place with people who are there to encourage and motivate you along the way.
Whether it’s your family, your friends or a mentor, ensure that you have a close knit of people around you so that you can launch your new law firm with absolute confidence, knowing that you are not going through this alone.
A successful new business does not happen overnight (as you may have gathered in this article as well as in Part One and Part Two). It takes determination, bravery, guts and grits.
But it is also so worth it.
It is therefore important that you have all your foundations firmly in place (just like the ones that we have attempted to set out for you) before you rush in (because Only Fools rush in).
We have tried our best to give you a “go-to-guide” on how to get all your ducks in a row. And we truly believe that if keep your head up, ensure that you have completed all the mandatory legal requirements and make sure that you have all your relevant plans in place, there is no reason why you won’t succeed.
“Believe in yourself. You are braver than you think, more talented than you know, and capable of more than you imagine.”- Roy T. Bennett (The Light in the Heart).
And AJS believes in you!
Written by Alicia Koch on behalf of AJS