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#ClioWeb
How to Start Your Own Law Firm
Seven Steps to Going Solo
#ClioWeb
Joshua Lenon• Lawyer in Residence at Clio• Attorney Admitted in New
York• @JoshuaLenon
#ClioWeb
Agenda
• Seven Steps to Opening a Law Firm (45 minutes)1. Plan Ahead2. Pick Only One Area Of Law3. Pick The Right Area Of Law4. Build A Referral Network5. Build A Website Immediately6. Join Organizations And Listservs7. Sell to Clients
• Further Resources (5 minutes)• Questions (10 minutes)
#ClioWeb
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:RobertHalfLegal,May,2016
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Law Students
900 law school graduates of 2015started their own law firms.
Source:NALP
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PLAN AHEADSeven 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 requirements2. Ethical duties3. Business concerns
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Regulatory Planning Steps to Opening a Law Firm
1. Business Plan 2.Business Structure– DBA, LLP or PC,
Partnership3. Business Entity Filing
4. Banking– Operating– Trust
5. Insurance6. 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 & payment2. Budgets & “rainy day” funds3. 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 employeeby Charlene Jimenez in Business Entrepreneur - February 21, 2012
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60% of law firmsspend 1-3.99%
of total firm revenue on technology
24% of law firmsspend 4-5.99%
of total firm revenue on technology
Source:ILTA/InsideLegal TechnologyPurchasingSurvey2016
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Investments in technology lead to rising revenue.
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3.6%
1.1%
6%
-0.7%Mid-size AMLAWSecond100
LawFirmRevenuesinQ12016TechInvesment Revenue
Source:PeerMonitor Q12016reporting
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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: EdPoll,consultantandownerofLawBiz.com
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Yes, there’s math.
Desired Annual Billings X 3.7% = Your Annual Marketing Budget.
Source: DustinRuge,HowMuchShouldMyLawFirmSpendonMarketing?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: AmericanLawyer,“WhatEverHappenedto'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 LAWSeven 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 LAWSeven 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 NETWORKSeven 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 IMMEDIATELYSeven 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:Howlawyersgetfoundin2015,Avvo.com,9/10/2015
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Traditional Networking Activities
1. Be a Referral Source2. Public Speaking3. Community Development4. Build a Marketing Culture
Inspiration:TheBusinessGuidetoLaw,KerryLavelle
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6 Areas of Online Promotion
1. Blogging2. LinkedIn3. Effective websites4. E-alerts5. Online rankings6. Ratings directories
Source:2014Alyn-WeissNationalMarketingEffectivenessSurvey
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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 LISTSERVSSeven Steps to Opening a Law Firm
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Organizations & Listservs
Orgs. and Listservs = instant expertise & mentors.
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SELL TO CLIENTSSeven 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
@JoshuaLenon
Linkedin.com/in/joshualenon
1-888-858-2546
Colin McMahon
Linkedin.com/in/colinmcmahonclio
Support.goclio.com
www.youtube.com/user/ClioVideo