There may come a time when a lawyer decides they want to step away from the firm they work for and instead start their own law firm. They want to be their own bosses and put all of their focus on specific types of cases and want more flexibility in their scheduling. Or maybe they lost their job due to downsizing and need another job. No matter the reason, starting a law firm can be overwhelming. In order to make the process a bit easier, one can take steps in the beginning to make the rest of the operation.
Form an Entity
To begin, a lawyer should discuss the specific entity they should create with a business lawyer and an accountant. Choosing their specific entity will affect many other aspects of the firm, such as their personal exposure to business debts and taxes. For example, a firm that will be on the smaller to medium size has a sole proprietorship, professional corporation, limited liability partnership, or limited liability company. After an entity is established, it must file for a federal Employer Identification Number or an EIN.
Set Up Accounts
One of the most important steps when starting a law firm is ensuring the finances are set up for success since lawyers are responsible for handling their client’s funds and following specific guidelines. This is a vital step.
The account a new law firm should set up is their checking account since lawyers are restricted from mixing client funds with their own. They will also need to set up a credit card for the same reasoning, plus they can collect points for using a business card. Another account to look into is a client trust account, for when clients pay a retainer or secure funds for their services through other property. Finally, a new law firm should open an IOLTA which stands for the Interest on Lawyer’s Trust Accounts. These accounts store the funds from the client, and once in a while, those funds gather interest. Therefore, the interest from those funds needs to be stored in a separate IOLTA account.
Get Liability Insurance
Liability insurance for law firms provides coverage in case of a financial loss due to mistakes in the provided legal services. Every state has its laws for liability insurance, so it will be necessary for a lawyer to consult those laws to figure out if this type of insurance is mandatory and what amount of coverage is needed.
Create a Website
Marketing is crucial, especially for a new law firm. Creating a web design for lawyers is one of the most important steps. An eye-catching website will help get the word out about the new law firm and what services they provide. To help a website stick out, a logo should be designed and should be the same across all media platforms, not just the website. The web page should also be easy to navigate and straightforward.
Once these basics are finished, goals must be set, budgeting, hiring, and more. This is only the beginning, but having these basics done will create a domino effect for everything else.