Law Practice Management

Starting Out

What to consider before launching your own firm.

By Dirk Jordan

Starting Out

Are you looking for a change? Maybe you’ve always had a desire to start your own business. Perhaps you cannot find a good job in an existing law firm. If you are in any of these positions, you may want to consider starting your own firm. Remember this has been done before; 70 percent of all lawyers in the U.S. practice in firms of five or fewer. The key takeaway is this: It is not what you make, it is what you keep. Before you make any decisions, examine the issues that follow.

What to Ask Before You Start

1. Are you self-sufficient? Can you do tasks without help or direction?
2. What is your risk tolerance?
3. Are you a self-starter? Are you disciplined? Can you manage your time and get things done without someone watching over you?
4. If you have a significant other in your life, is he or she supportive of your new venture?
5. Do you have enough money saved to make it for several months before cash flow rises to a comfortable level? Do you have debt? Can you get a line of credit from your bank?
6. Do you have a business plan? Do you have goals and a road map on how you will get there? How are you going to get clients in the door? What is your position in the market? How much competition do you have in your space?
7. Do you need employees? If so, why?

Entity Choice
You can choose to form a PLLC, an LLP, a PC, or act as a solo practitioner. These are all valid options. The choice of entity is driven by whether you are practicing with someone else, tax considerations, and the desire for simplicity.

Who will you practice with?
If you choose to practice with others, realize that friendships can be ruined when you start a business together. You may have different work styles, goals, and abilities to bring in business. These differences can lead to conflict and disillusionment. Discuss your expectations with your prospective partners and determine if you are on the same page and can work together. If you decide to go forward, make sure you get your partnership or membership agreement in writing. Plan for the end from the beginning. Get your prenup done now while you still like each other.

Office location
Where will you practice? Some lawyers practice out of their homes to keep the overhead low. This makes sense for some, but if you are a criminal defense attorney or family lawyer, you may want to think twice about this option.

Office sharing is common among lawyers and other professionals. You may be a solo, but you have other lawyers available for advice and referrals. Traditional Class “A” space in tall buildings is expensive, but your target clientele may expect you to office in this setting.

Next, do you want to be in a small town or large city? Do you want to be downtown or in a suburb? This depends on who your target clients are and what they expect their lawyer’s office to look like.

One of the first areas you need to work out when starting your firm is your finances. Get a tax ID for your business. It takes five minutes at the Internal Revenue Service’s website and you will need it to open your firm bank accounts—one firm operating account, one firm Interest on Lawyers Trust Account, and at least one personal account. Keep the funds separate from each other. The money in the IOLTA is not yours until it is earned. Consider a line of credit at your bank. Hopefully you have a relationship and a track record with a bank that knows you and will extend you an unsecured line of credit.

Learn how to use accounting software or one of the many cloud-based practice management options and learn how to track your time on your computer. As you’re starting out, make sure to be consistent in sending your bills out the first of every month. Consider taking credit cards. Make it easy for clients to pay for your services.

Malpractice insurance—get it. You want to have insurance to protect your assets. It is worth the peace of mind. Think about your options for other types of insurance, such as business and health care insurance (check out the Texas Bar Private Insurance Exchange at Take the time to shop your business to various vendors.

Determine what technological tools will be necessary for your practice, including whether you’re going to use an onsite server or move to the cloud.

In terms of hardware, you’ll need to decide on desktops, laptops, or tablets—good for reviewing deposition transcripts and marking on documents but not a necessity—and whether you want to use a Mac or PC. Do yourself a favor and get an extra monitor—it is inexpensive and will give you more screen real estate for your calendar and to-do list. Make sure you have an external hard drive to back up your computer. Use redundant backup systems, including cloud-based storage such as Backblaze and CrashPlan. Even with a paperless office you need a printer—a laser black and white one will work just fine. A scanner is essential if you’re going paperless and necessary for required e-filing.

When it comes to software, Microsoft Word is the most commonly used word processor out there, and Outlook, Excel, and PowerPoint are included in the Office Suite. There are many PDF programs available, but Adobe Acrobat Professional is the gold standard, providing tools to help manage scanned documents. Don’t forget a timekeeping program, such as OfficeTime; cloud storage providers like Dropbox; and encryption software. Maintain an online calendar and to-do list that sync between all of your computers and devices, such as Fantastical 2. Be sure to have access to an accounting program and, of course, email (just be mindful that some email providers read your mail).

Here are some final practice tips for when you get started:

1. Keep a regular schedule. Be at your desk by 8:30 a.m. You should be available during working hours for clients to contact you.
2. Respond to all calls and emails within 24 hours. Even if you cannot give a response, let contacts know that you received their call or email and will get back to them. No one likes to be ignored.
3. Be courteous and professional with everyone. It will enhance your reputation.
4. Keep a healthy balance (whatever that means to you) between work and life.
5. Be conversant with how to use technology. It will make you more efficient.TBJ

Dirk Jordan DIRK JORDAN has been a solo practitioner since 2001 after practicing with Strasburger & Price for 10 years. A mediator and commercial litigator, Jordan is also an adjunct professor at the University of Texas School of Law, where he teaches a class about starting and managing a law firm. He is chair of the State Bar of Texas Law Practice Management Committee. Jordan can be reached at

{Back to top}

We use cookies to analyze our traffic and enhance functionality. More Information agree