New Year, new start?
As 2023 approaches rapidly, you may be thinking about a brighter future by starting your own law firm. Whether you are thinking of going solo or teaming up with colleagues, it’s wise to plan carefully.
There are many benefits to running your own firm – you control your own destiny, reap your own rewards and you can determine your own work / life balance. However, benefits bring responsibilities with them…
Always remember: you are running a business.
Life in the legal world can be hectic. It’s a demanding profession and day-to-day work can mean that business performance considerations slip to the bottom of your list.
Being a great lawyer does not automatically mean you are a great business person. It’s prudent to take on board the advice of professionals:
- Employ a good accountant who can take you through the key financial considerations.
- Focus on your profit and loss statement regularly.
- Enrol for some basic business management training.
- Get a firm grip on cashflow management.
Pay particular attention to cashflow. Businesses don’t go bust due to a lack of profitability. They go bust because they can’t pay the bills. You should know your precise cashflow position at the end of every working day.
The art of maintaining positive cashflow is to invoice clients regularly. If you do this each month, or even more often, you are more likely to get paid on time and in full. Don’t be afraid to use interim billing. Clients find it easier to afford and pay for your services in bite sized chunks – and it will keep your bank manager happy. The longer you wait before sending out the bill, the less likely you are to get paid.
To assist with this, set up systems with your bank to enable you to accept credit card payments and automatic bank transfers. This will alleviate many of the problems associated with collections.
Market yourself professionally.
Nowadays, the starting point for all promotion is your website. It’s your brochure, your directory entry, your online storefront, your client care mechanism and your newsletter all rolled into one. Websites are not a one-off transaction. They require maintenance to maintain your position on Google.
That requires advice and input from web professionals who manage search engine optimisation on a daily basis and who know how to write blog articles that will generate traffic for your site.
Of course, it’s not all just about e-marketing – the more traditional methods count too. Don’t overlook these when developing your business plan.
- Contact the Law Society / SRA or Law Society of Scotland early, they have a lot of information about how to start-up and will support you through the process.
- Contact your bank early as well, it can take a while to setup a new business bank account.
Invest in the right software.
Keeping track of profit and loss, cashflow and managing your client marketing, time recording and billing is easy with the right practice mamagement software.
It pays to opt for a PMS system where accounts and case management are integrated and you can access all the relevant financials and case information without duplication of effort.
If you are thinking of striking out on your own and starting your own law firm, good luck, take care and contact us.