Planning, organization and financials, oh my!
Law practice requires more than the law

When it comes to setting up a law practice, lawyers often think that knowing the law is all they need.

According to a panel of lawyers and legal consultants who work with general and solo practitioners, knowing the law is just the beginning. The panel offered a business boot camp for members of the General Practice, Solo and Small Firm Division at the recent ABA Annual Meeting.

The panelists outlined five business areas that they believe are critical to the success of any lawyer venturing into solo practice. The first area is planning. “It's easy to minimize the importance of planning,” said Jim Calloway, director of the management assistance program of the Oklahoma Bar Association.

Nerino Petro, practice management advisor with the State Bar of Wisconsin, agreed, saying, “Law school teaches about the practice of law, but not the business of law.”

The five panelists pointed out that there are three types of plans: strategic, business and disaster. A strategic plan guides the direction of the firm, addressing such questions as type of law, number of clients and financial goals.

A business plan focuses on the day-to-day operations, including budgeting and taxes as well as hours of operation, physical location and other details.

Calloway pointed out that a plan must be written down. “Until you write it down, it's only a dream.”

For disaster planning, Ross Kodner, CEO and Senior Legal Technologist of Microlaw, Inc., in Milwaukee, said to store electronic back up of files offsite. He recommended photocopying or scanning every document as an additional precaution so back up is available in paper form and electronically.

The second area of focus was business organization. Panelists suggested considering the legal form, whether a sole practitioner, partnership, corporation or limited liability organization. They stressed the importance of knowing and meeting all filing requirements.

Petro said, “Everyone gets paid before you do and first in line is Uncle Sam.”

Panelists gave the IRS Web site (www.irs.gov) as a resource for planning, forms, applications and other small business information.

Financial considerations were the third area discussed. While each of the panelists had a favorite accounting program, they agreed that having a way to track time through billing was critical.

The panel members discussed good collections policies. Jeff Allen, Graves & Allen, Oakland, Calif., said that collecting fees was an important skill if lawyers do not want to do all their work pro bono.

Allen also suggested in the operations area that small firm lawyers consider establishing a relationship with a professional staffing agency. “Initially, lawyers might have to pay a higher hourly rate, but someone else will figure employment taxes and provide benefits, plus you will be able to quickly add or subtract staff as your work requires.”

The final area covered by the panel was attracting and retaining clients. Sandy Bautch, legal technology consultant, Easy Productive Solutions, Winterset, Iowa, noted that a plan with a sense of direction can set the framework for marketing.

The other panelists suggested that blogging is a good way for solo and small firm lawyers to promote their practice specialties.

Kodner said that blogging helps establish a lawyer as a subject expert, noting search engines favor blogs by putting them high in lists of search results. Allen cautioned that unless a lawyer enjoys writing, a blog can take more time than the lawyer wants to spend.

More information on how setting up a law practice is available at http://www.abanet.org/genpractice/resources/startafirm.html

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