How to Start a Law Firm Archives - Solo in Minneapolis

May 16, 2011November 4, 2011

Starting a Law Firm | Studying for (another) Bar Exam

As I have posted previously, when starting a law firm, you need to be licensed. No brainer. How do you get licensed? You study mind-numbing information that is mostly irrelevant to the day-to-day obligations of running a solo law practice.

My perspective on the requirement of being licensed to practice law is a little different because I am already licensed in one jurisdiction (Indiana) while trying to be licensed to practice law in another (Minnesota & North Dakota). I find the situation ironic and mildly amusing. One one hand, I am running a small, but profitable, law practice out of my home. On the other hand, I am studying for the bar exam (again) to try and learn legal principles I’ve never used in practice. It is truly an odd feeling.

But, this blog is not supposed to only be about my journey to start and build a law firm. No, this blog is meant to try and help anybody out there who has questions which I may be able to answer while they go from zero-to-hero (or some variation thereof). Today’s question is how to study for the bar exam twice.

My perspective on studying for the bar exam again after a four year layoff is a little different from the first time test taker. Foremost, the focus should be on studying and memorizing lots of information for the multi-state examination or the MBE. The MBE is the real bear and it needs to have the most time spent on it. (Caveat: this is only my perspective from my own experience and from speaking with former exam takers). Focusing on the MBE means two things (1) know the substantive area of law and all the elements VERY WELL, and, (2) do as many multiple choice questions as you can.

If you can focus on these two things, and you successfully graduated from law school, I think you can pass the bar exam. Furthermore – and this is a cliche I’ve found to be true – studying is a marathon and not a sprint. I am currently training for a half-marathon and I know what that means. It means work. It means sticking to a routine and doing things over-and-over-and-over again. It means not missing runs (MBE test) when you are scheduled to make those runs (MBE tests).

Now, the rest of the bar exam is not a cake walk. You have to know the substantive law of your jurisdiction so that you can pass the essay portion and the MPT. This means going to lectures and taking notes and not blowing stuff off. As long as you have done this, you should be fine. The essays are relatively straight forward law school type questions. One interesting change is that the bar examiners now allow people to take the essay and MPT on their laptops in many jurisdictions. This should be an interesting wrinkle, but I believe it is most likely for the best given how sloppy many peoples’ hand writing must be. I know mine is terrible.

I’ll post more on these subjects as I go through the process, but those are my initial thoughts as I dive back into bar exam studying. So, if you thinking about starting a law firm and how to start a law firm, think first about being licensed. Think first about the bar exam. Think about it a lot and go through the paces. You’ll be fine.

May 12, 2011November 4, 2011

Starting a Law Firm | Website “Call to Action”

In trying to build and start a law firm in the best way possible, I have obviously been thinking a lot about law firm websites optimization and how to get client to my website. A recent post on Lawyerist about designining a website “call to action” is very relevant to my law firm website goals.

As many of you many know, the Lawyerist is an excellent lawyer blog that has quite a few contributors. It is a good site with good content. I suggest you check it out. Today, there was a post about having a “call to action” on your website. The call to action, as I understand it, is getting the client to click on what you want them to click on – your name, number, and contact information.

I’ve thought of this before, but I’ve realized that I need to me more diligent about it. My idea was to offer a free consultation and get phone calls that way. People always call more if they think they aren’t going to have to pay for the lawyer phone call. Thus, the free consultation button. I don’t intend on working for free, but I have found that I can usually consult with someone for ten to fifteen minutes about their problem over the phone. If it is a case I think I can handle, the client and I get along, and I think the client will pay their bill, that is usually when I try and make the sale.

But, is that enough? I don’t really think so. I have realized that I need to have more on my website to get people to actually pick up the phone or shoot me an email. I’m going to work on it. My law firm website currently has a logo section. That logo is something I’m going to focus more on. I also intend to include more information in the footer of the website for people to contact me when they are seeking legal services.

From a practical, marketing perspective, starting a law firm is all about getting the phone to ring and getting people in the door. Being a good attorney and practicing in an ethical fashion are equally important. I don’t intend to wait and I want to call all my potential clients out there to call and seek my legal advice and skill.

May 11, 2011

Starting a Law Firm | Law Firm Website Update

As an update to my effort to start a law firm, I wanted to let everyone know that my law firm’s website is up and running. It’s located at flanderslawfirm.com.

I am not completely satisfied with it and I plan to make some much needed changes. But, it is up and it isn’t too bad. The best part? I did it mainly by myself. If anybody actually reads this and goes to my website I would appreciate any comments.

I ultimately got my law firm website up and running through a lot of trial and error. To me, starting a law firm is all about trial and error. Why should it be any different with a website?

The first trial was hosting. As I explained in my law firm website hosting post, there are a lot of choices but I chose Winhost.com. To this point, I have been very happy with Winhost and I have no complaints. However, it is early and we shall see how it goes. Through many hours and a lot of head-banging, I was able to read the help forum and “knowledge base” articles on Winhost and figure out how to set my law firm website up using these main, FREE ingredients:

(1) Webmatrix

(2) FileZilla FTP

(3) Internet Information Services (IIS 7)

(4) WordPress.org

The Winhost forums have moderators who answer many questions from all kinds of people with similar difficulties. There are posts about how to use your hosting service for all of these free tools. Again, creating a law firm website isn’t easy, but if you have the time and the gumption you can do it. Those are the free tools and they are great.

Now, the non-free tools I used were:

(1) Winhost website hosting (Cost: $114 for a year of hosting)

(2) NameCheap domain names ($10.00 for a typical domain name)

(3) Elegant Themes templates ($39.00 a year).

That’s it. Easy right? I also think those prices are pretty darn reasonable and I did pay a web designer anything.

Once I figured out how to use these tools, I was able to customize my law firm website. It takes some knowledge of html coding and cascading style sheet (CSS) language, but I picked it all up on the fly.

If anybody needs any help out there on how to start a law firm website, post a comment.

May 8, 2011November 4, 2011

Starting a Law Firm | Choosing Clients Carefully

When starting a law firm, you need to choose your clients carefully. I realize that this is much easier to say than to do, but I can not emphasis enough how important client selection is.

In my 3+ years of working as an associate for a small general practice firm, I took on a lot of different kind of cases. Probably too many different kinds of cases. Regrettably, nobody ever told me to be careful about the kinds of clients and cases I took on. I wish somebody would have because, for me, it could have been the difference between being a happy lawyer and being a miserable lawyer.

Clearly, if you start a law firm, telling yourself that you will only accept clients and cases you want to work on is a bit academic. After all, you have to eat. I also realize that I’m not always going to like all of my clients and they probably won’t all like me. That is just a given. But, being careful about client selection can make your lawyer life so much better. My general rule of thumb is this: don’t take on a dog just because it pays.

I wanted to write this article in my starting a law firm blog after reading a really interesting and well written article in my Indiana Bar Association magazine: Res Gestae. (I’d link to the publication online, but, unfortunately, it doesn’t have an online presence.) The article is by a regular columnist, Donald R. Lundberg, and is entitled “Choosing clients wisely: a key to fulfillment in the practice of law.” It’s in the April 2011 issue.

The article brought up some great points that I want to briefly summarize here. The author advises that every time a new or old client brings your law firm a new matter, you should consider a number of things, including:

Your Competence to handle the matter
Past lawyer history on the case (are you the second or third or fourth lawyer on the case?)
The client’s emotional connection to the case (are they too close and not able to distance themselves from it?)
The problem dump (is the client wanting to dump their problems on you so that it is now your problem and not theirs?)
The micromanager (this one should be self-explanatory)
The needy client (also known as the constant caller)
The non-payor and/or the slow-payor (in my experience, this one usually encompasses all of the above).
Conflicts of interest (this one is obvious, but I point it out to say that it is also a good way to explain to the client why you won’t take their case)

That is the list. I think it is a pretty good one. There are probably other items to add, but I think you get the point. Being a lawyer can be tough. When you make yourself miserable by working on cases you don’t like, or for clients you can’t stand, your job starts to feel like a noose. I’ve been there. It’s not fun and I’ve thought about quitting the practice because of it.

If you are going to start and build a law firm you are going to need clients. You are also going to work on some cases at the beginning that you probably won’t take later. That is ok. But, if I can recommend anything, it is to enjoy your job as much as you can. Choosing your clients and cases wisely is the way to start your law firm the right way.

May 7, 2011November 4, 2011

Starting a Law Firm | Law Firm Bank Accounts

I have been talking with several lawyers about the whole “how to start a law firm” project and this blog. One comment was that I should focus more on the basics of getting a law practice up and running. So, in an effort to cover more of the basics, here goes.

If you start a law firm, you are going to need bank accounts. My firm currently has three different accounts: (1) checking; (2) savings; (3) IOLTA trust account. The last one, the IOLTA, is the most important one. Those are the basic three that I would recommend to get your practice running. (As an aside, I have been thinking seriously that my firm needs a credit card so that I can more easily track expenses. This is important for knowing what is and what is not a tax write-off.)

So, the bank accounts. I chose one particular bank in Indiana because the Indiana Bar Foundation told me I had to. The bank is on a list of approved IOLTA banks in the State of Indiana. I have checked, and this process is very similar in Minnesota. Obviously, I went to this bank to start my law firm bank accounts. The bank was familiar with the process and they made everything pretty easy for me. I was paranoid about screwing up the IOLTA account somehow because all I read in bar journals and other legal sources is that lawyers often lose there law license for screwing up the IOLTA account. Of course, it turns out that lawyers lose there law licenses because they steal from said account, not because they set it up improperly.

I realize this is pretty simple, but bear with me. I chose a checking account with large, business-size checks for firm expenses. I use the checks to pay bills. I use the checks to pay for court filing fees and other expenses. If I use the firm’s money to pay expenses for a client, I make a charge on my billing software on the particular client’s file. This is how I know I will be reimbursed by the client when I send out monthly billing. This account is also what I use to deposit money from my clients when they pay their bills. I use this account a lot and this is how I ultimately pay myself.

I don’t use the savings account much, but I think it is useful. I make sure I have a minimal balance in savings in case of an emergency. I don’t know what that emergency would be, but it’s there and I feel good about it.

Finally, the IOLTA. This is probably the most important one and the one you need to be very diligent about. If you want to know what IOLTA accounts are all about, click here for Indiana guidelines. I have checked around in other states and the guidelines are very similar between jurisdictions. There is some variation and it isn’t mandatory in every state as far as I can tell. Basically, the interest from the money earned on a client’s trust money is used to fund various pro bono and other causes in your particular state. I like the IOLTA program. I think it makes a lot of cents.

Once you set up the IOLTA, you usually have to report the fact that you created an IOLTA account to your particular state. The bank I worked with was very familiar with the process and they did this for me the day I signed up for an account. Now, there are also rules for closing an IOLTA account and I need to go over them again as I prepare to wrap up my Indiana practice and move to Minnesota. Once you have an IOLTA account up and running you can begin to place client retainer or trust funds into it.

There are many many rules and case law and advice about how to properly maintain your firm’s IOLTA account. I’m not going to discuss them here. My rule of thumb is I’m a fiduciary, it’s very important that I take care of it, and I don’t ever mingle funds. If you went to law school, you should know what being a fiduciary means.

There you are, a basic break down of starting a law firm bank account(s). I’ll admit that I’m new to the bank account process and I am still learning what works best for me and my firm. I suggest you do the research and find out what works best for you when you start your law firm.

May 4, 2011November 4, 2011

Starting a Law Firm | Getting Paid for Your Work

A common problem that I, and anybody starting a law firm, will have is getting paid for your work. The easy answer to always getting paid is to ask for a large enough retainer for the work you know you are going to be doing. Easy, right? Good luck getting a lot of work, I say.

Here is the problem: other attorneys will charge less than they should to get a new client. An example: Attorney 1 says to the potential new client that I charge $2,000 for an initial divorce retainer. Attorney 2 says to the potential new client that I will $1,500 for an initial divorce retainer. Who is the client going to choose? Most of the time, I would bet, the potential new client will pick lawyer 2. It’s a simple market issue.

Now, let’s say you sometimes lower your retainer to stay competitive in the market. The problem that this can create, and which I have often faced in my own practice, is that clients often pay the initial retainer and that’s all you are going to get. You can sit there and recite the trust account, bill-by-the-hour, security deposit speech to the potential new client until you are blue in the face. The client will even sit there, appear to be listening, and nod his or her head like they understand. Then, three months down the road when the initial retainer runs out, the client doesn’t pay another bill. Another month goes by and no payment. You get the idea.

To combat this problem, a useful to call the client and say: “Hi Joe, your divorce is going fine and I think we are close to an agreement. I’d like to get this finished up, but I am waiting for a payment. When do you think you will be making this payment so we can get this finalized?” The client is often sightly embarrassed and may respond: “Oh, sure, I’ll pay that off in a couple weeks.” That doesn’t sound too evil does it?

I don’t condone not finishing work all the time. Your first duty should always be as an officer of the court. If a judge or another attorney is expecting you to do something you should do it – and you should bill for doing it. Afterwards, you can always call the client and tell them about what you just did for free and how you won’t be doing much more on their case without a payment. If they still insist on not paying you, send them a nice withdrawal letter, file a motion to withdraw with the court, give them their client file, and wish them luck. (If they owe you a lot of money, many jurisdictions allow you to file an attorney’s lien on the case so you can hopefully get paid after you withdraw).

When starting and building a successful law firm, you must always be concerned with getting paid. That is how you pay the rent, the utilities, the paper costs, and all the other fun overhead expenses. I’m sure I don’t need to tell you that you get paid by collecting these fees for your law firm as well.

April 30, 2011

Starting a Law Firm | Creating a Law Firm Website

I wanted to share with everybody what I have learned about building a website for starting my own law firm.

As I posted previously, I have been doing a lot of searching and reading about law firm website hosting. There are way too many web hosting options to list here. Suffice it to say that I can’t recommend one or another. Everybody wants to host your lawyer website.

So, where to begin? Do a google search and you will find many choices. I chose winhost.com. I’m not making a plug, I am just letting your now what I chose. I could have made a mistake, who knows.

I chose Winhost for two reasons: (1) the price and (2) the functionality. The price I chose was a monthly “Max” plan at $10.00 a month. They have a cheaper plan, but I wanted a plan with enough functionality for me to expand and add things like more website content and email users. The functionality compares with, if not better than, many website hosts out there. The “Max” plan has quite a bit of hosting space and other options that I frankly don’t know how to use. I will say this, I did quite a bit of research and I didn’t see this much functionality at places like Godaddy.com. The price is the same, but I don’t think you get as much. (Caveat, I’m a lawyer, not a web designer, and I really don’t know what I am doing.)

So, onto the lawyer stuff. I have decided to develop a law firm website right now. That way, I can build up links and get some traffic to the website before I officially open up my law firm doors in Minneapolis. Also, since I have more free time on my hands than I am used to, I figure this is the best time to learn this stuff.

Now that I have chosen a host, I have to figure out how to get a website up. This is where the real fun begins. I have no website building experience and I just learned how to set up a blog. I’ve put a lot of time into it, but there is a lot more to learn. As I am on a budget when starting my law firm, I don’t want to pay for a web designer. I’m trying to do it on my own.

Here are the tools I have used so far:

(1) Winhost.com (the website hosting service)

(2) Microsoft WebMatrix (a web development tool)

(3) WordPress.org (free blog and CMS website hosting)

(4) Various business and/or law firm templates.

Those are my current tools in more or less the order that I am using them. Again, not a plug for any of them, but that it what I have found so far.

On Winhost, there is a control panel which allows you to set up a database and it also contains domain information like your server address, url address, etc. This is all voodoo to me, but it is necessary to connect with the next step, WebMatrix.

Download WebMatrix and then learn to use it. Did I mention that it is free? There are plenty of tutorials on the Microsoft site. It isn’t the most user friendly software, but, then again, it isn’t that difficult. In WebMatrix you can choose a number of different website building options. There are templates pre-installed, but I recommend either buying a template or finding a free law firm template and loading it into WebMatrix. If you choose a pre-built template, you can load it into WebMatrix and then connect WebMatrix to your server (e.g.: WinHost). This is where the voodoo comes in. I struggled for hours to get WebMatrix to properly connect to and recognize WinHost. But, in the end, I got it to work. Again, instructions are all available via online tutorials and help forums. Also, you can load WordPress.org through WebMatrix if you want to use a WordPress design for your law firm website.

If you do use WordPress, there are many different free templates that you can use for your law firm website, or you can pay for and install a law firm theme for WordPress. I haven’t done this yet, but I am planning to go this route. Wordpress’ functionality and SEO optimization tools are easy, free, and, best of all, they look good.

So, that is my hackneyed explanation on what I am doing to create a law firm website. I’ll unveil the site on Solo in Minneapolis when it is ready. Let me know if any of you have questions on this process. I’d be happy to share what I have learned anybody wanting to build a website when the are starting a law firm.

April 26, 2011November 4, 2011

Starting a Law Firm | Good Busy v. Bad Busy

As anybody reading this blog may know, I have a lot more time on my hands while I wait to be licensed in Minnesota and the official s tarting of my law firm.

The extra time has allowed me to do a lot more blogging and research into how to start a law firm. I think this has been good. I know I need to do these due diligence kinds of things before I start a law firm in Minneapolis. I also know that I have come a long way towards learning how to optimize technology to help build my fledgling law firm. It has been work, but I have enjoyed it for the most part.

Yet, taking all of that into account and not dismissing it out-of-hand, I am starting to wonder whether there is such a thing as good busy versus bad busy? For example, I have begun to question how important some of this internet marketing and blogging stuff is. Shouldn’t I be out there hustling, lunching with people, joining trade associations, utilizing person-to-person networking, and generally trying to rake up real, tangible work? Isn’t that a little more useful than focusing so much on my internet presence? Maybe, maybe not. It could be good. It could be bad.

I call this “bad busy”. Good busy is serving my clients, doing great work, and getting paid what for your efforts. Bad busy is focusing too much on things that aren’t important when trying to start a law firm.

As I’ve stated in other posts, what I learned in 3+ years of practice is that you have to get out there and you have to sell yourself and your skills. You gots to hustle. I think I am pretty good at that. However, lately, I have been more focused on internet marketing and blogging because it is easier and fun. It is also a medium of marketing that I needed to get better at. Before about two months ago, I would have laughed at you if you told me I would get a Twitter account. I’ve got one now and I can understand the effectivness of it. Building that knowledge is good busy.

But, and there is a real fine line here that I sometimes can’t see, I can focus too much on things like Twitter and blogging and social media. I bet a lot of lawyers and idle procrastinators out there might also have this problem. It’s not that your lazy or you don’t mean well. It is just that sometimes we all can be too focused on bad busy when trying to start a law firm. Bad busy is bad.

April 25, 2011

Starting a Law Firm | Public Defender Contracts and Getting Paid

I am not one for short blog posts, but I want to share some disturbing news I was reading over the Easter weekend related to my fears about starting a law firm.

While visiting family in Iowa, I was reading the Cedar Rapids Gazette’s business section. There was a disturbing article about lawyers not getting paid for their public defender contract work by the State of Iowa. Wow. If you can’t rely on the state to pay your attorney’s fees bill, who can you rely on?

I have a constant fear of not getting paid. I do a lot of family law work and I have had a lot of clients who do not pay their bills. As a young attorney worrying about whether I can start and maintain a successful law firm, I worry about how I am going to get paid all the time. One thought I have had when I consider how to make my new law firm successful is to sign up for the public defenders program in Minneapolis, MN. But, if a state supported program isn’t going to pay the bill, why would I want to do that?

Another reason for sharing this article is that it discourages me in the respect that I might not be able to make it on my own. If you read the story, one of the lawyers apparently couldn’t afford to pay her secretary and her home mortgage because of the State of Iowa’s failure to pay her public defender bill. That should scare anybody who wants to start their own law firm.

April 25, 2011November 4, 2011

Starting a Law Firm | Overhead

Starting a law firm is all about keeping costs down and profits up. Simple statement, right? Well, it’s easier said than done.

Here are some questions I keep asking myself and which I believe are common questions all solo attorneys have: Don’t I need an office to be legitimate? Don’t I need a secretary right away? Don’t I need a computer, printer, paper, pens, pencils, three-hole-puncher, and so much more? Don’t I need a fancy suit and lots of expensive business cards to hand out?

When answering questions like those above, ask yourself another question: How am I going to pay for these things? I find that once I start with thinking about a budget and how much I can afford, the supercilious things tend to melt away a little bit. The obvious overhead killers are office space and support staff. I don’t have the end-all-be-all answer to those questions, but here are my thoughts.

(1) Office Space

I’ve been practicing out of my own home office now for about three months. It creates some definate challenges, but my clients don’t seem to care at all. My lease payment is $0.00 and I use the phone line and internet connections that my wife and I are already paying for. (As an aside, I do need to worry a bit more about internet security now that I have client files on my home/office computer. I’ll talk more about that in a different post). So, my at home office cost is nill and it keeps overhead extremely low. Right now, I pocket most of what my clients pay me which is pretty cool.

There are some drawbacks. I don’t feel very professional. I don’t put on a shirt, coat, and tie like I did previously. I also don’t get mentally prepared to hustle every day like I did when I was at my old law firm. I find that missing step to mean I’m less motivated to use time in the optimal fashion. I bill by the hour and every minute that I’m not hustling feels like (and probably is) lost money. Now, I’ll admit that the stress level has gone down significantly and I no longer have a constant back ache.

Another drawback to the home office is that I get calls on my personal cell phone and I get mail constantly in my home mailbox. Is this a big deal? No, but it is annoying. It cuts off the home/work separation. I miss going to work, hustling all day, and then coming home to my work-free sanctuary. I found that an actual office puts my mind in a different place which is directly related to working hard and billing hard. Both of those things are integral (in my mind) to having a successful law practice.

Those are the main drawbacks of a home office. In the main, I highly recommend a separate room in your home be dedicated as your office. Failure to separate the room will result in less work getting done. Other than that, working from home isn’t so bad. The getting calls on my personal cell phone is easily solved by getting a new land line or cell phone completely dedicated to the law firm. The getting work related mail at home problem is easily corrected by getting a P.O. Box. Once those problems are corrected, the difficulties created by a home law office are lessened a great deal in my opinion.

(2) Staff

I don’t want to sound demeaning or rude in any fashion to administartive or secretarial staff, but I often found that when I was at my old law firm that I could do things more quickly and efficiently when I did them myself. I also got the results I wanted without having to worry that a mistake had been made which could create major headaches and more work down the road for me. So, I ended up doing a lot of things myself. Did it get old? Yes, but I did it, and I made a lot of money for the firm.

Now, a lot of the staff issues can be resolved by the use of technology. There are so many things out there that make an attorney’s life easier. For instance, I just got clued in on Dragon Dictation which is an automatic dictation software which records your voice and the changes your voice to writing. I haven’t tried this yet, but I am dying to get it. I did a lot of dictation at my old law firm and this option would be a lifesaver at times. Furthermore, there are many different tools out there to modifying your firm into a mostly paperless office. This cuts down the need for secretarial time quite a bit.

Do I alway want to go without staff? No, no, no. But, at the beginning of my starting a law firm venture, I know that I need to keep overhead low while I build up a client base. Failure to keep overhead low can be the death knell to a fledling law practice. I don’t want the death knell.

One last thing about staff – you will need them eventually. Answering the phone, typing your own letters and pleadings, and handling mundane details like mailing and copying is both extremely annoying and time-consuming. Getting back to my earlier comments about time, an attorney has to have good staff to do things quickly and efficiently in order to properly structure his time. Time is money. This is never more true than for somebody who makes their money billing by the hour.

In sum, keeping overhead low at the beginning of your law practice is of the utmost importance. Leverage technology and get efficient with it. Keep the money you make and don’t spend it on things your new firm can’t afford. Will you need to put more money into the firm for a while as your are building it? Sure. But, you don’t have to go crazy and you can watch your budget. Now, just keep your financial head on straight and keep on hustling as you start and build a successful law firm.