Douglas Healy shares his six most important tips for starting your own law firm

Are you considering starting your own law firm? Experienced lawyer – and successful law firm owner – shares six invaluable tips.

If you are hoping to start your own law firm then you have some very important decisions that you need to make. With more than 175,000 law firms operating in the United States already, the competition is intense. 

Douglas Healy is a graduate from University of Arkansas law school who has worked in a variety of rolls including Senior Trial Attorney for Greene County Prosecutor and Chief of Staff to the Chairman of the Missouri Public Service Commission.

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He set up his own law firm in 2007 and is currently general counsel to the Missouri Joint Municipal Electric Utility Commission. His experience setting up his own firm is vast and he’s encountered many different scenarios. To help you get an idea of what’s involved in setting up your own law firm, Douglas Healy shares six useful tips.

1) Make your clean break 

There is a good chance you will not be able to start your own law firm directly out of law school. So the majority of attorneys first work for an established law firm to gain experience, according to Douglas Healy.

There are several important things for you to consider when it is time for you to work on your own. And you absolutely don’t want to have any legal or ethical problems as you transition to your own firm. 

Make sure you finish any cases you are currently working on. Transition clients to other lawyers in the firm if necessary. Also make sure that you remain on good terms with your current boss – you might need them as a business contact or reference in the future.

2) Keep things lean

One of the best things about starting your law firm is that you can do it on a tight budget. Attorneys don’t need to buy any specialized tools or equipment; all you need is a smart outfit, a phone and a computer, and you can start making money representing your clients. You can take even more money home if you avoid purchasing a fancy desk, renting office space, and other ‘luxuries’. 

Staying lean can also really help when you are starting to invest more in your law practice. For each dollar that you spend ask yourself, “How will this purchase increase my ability to earn revenue?”

To scale up to the next level you’ll normally need to increase your operating costs. However, you need to be smart about your investments as you know you don’t need all the frills to function properly.

3) Specialize

When I first started my law practice, I thought being a general practitioner would be fun. However, I realized very quickly that it was not.

In fact, it was absolute hell. I enjoy being knowledgeable and competent in my work. But when I was taking civil rights, probate, employment, personal injury, and family law cases, I never felt completely knowledgeable about anything. 

There were so many questions that arose that I didn’t know the answers to. Although I could eventually find the answers, it wasn’t a great way to practice law. 

Instead, I quickly made a 180-degree turn to specialize in one aspect of law with laser focus. It appeared to be interesting enough, even though I didn’t have an interest in hourly and wage law in the past.

So I learned as much as I could about the subject. And after six months, I knew more about this aspect of law than most of the experienced attorneys I litigated against. It wasn’t because I was smarter, but it was simply because I handled FLSA cases only, while the other lawyers were handling many different types of cases.   

I also found more clients as a specialist than when I was attempting to be a general practitioner. The key to earning a living and enjoying my job was mastering a niche. 

4) Develop a marketing plan 

While your business plan should certainly include marketing, it demands to be its own line item on your list. 

P.T. Barnum is quoted as saying, “Something terrible happens without promotion“. And he was right about that. You could be the world’s best lawyer and have an extensive business operations background, but your efforts could be futile without having a good marketing strategy in place. 

Fortunately, there are many smart methods that can be used to get your law firm marketing started – and many of them are fairly inexpensive or free. 

5) Build your referral network

Let everyone you know and meet that you are planning to start your own law firm, and the area of law that you will be practicing.

Take other local area practicing attorneys out to lunch (they will normally pay for lunch as they feel sorry for poor law students) and then ask them how and where they get their cases.  

After you have met with some of these lawyers a couple of times, and have developed genuine relationships with them, you can ask them if they will send you work after you start your firm. Most will be happy to do this. 

You should also network with people who don’t practice in your specific area of law, as this is where the majority of your referrals are going to come from. So, for example, become acquainted with a couple of personal injury attorneys if you handle criminal defense. Good personal injury attorneys don’t practice criminal law, but some of their clients may have criminal legal problems.

Personal injury lawyers will want to send their clients to someone they personally know and trust, and your goal is for this person to be you.

If your jurisdiction allows it, incentivize people by paying them a reasonable and fair referral fee to send you work. Referral fees will vary depending on your specific area of law, so make sure to find out what the standard fee is. When it comes to referral fees, make sure that you are in compliance with the ethics rules of your State Bar. 

6) Build your brand

It isn’t sufficient to simply use a couple of basic marketing methods and put up a website online. 

It is important to dig deeper and consider the kind of image you want to have. Your brand goes beyond just your logo – it includes everything you stand for and believe in. 

What message do you want to send to the community you are serving? What is unique about your law firm that makes it stand out? Carefully consider your branding, as your future reputation does rely on it. 

Ready to start your own law firm?

Running your own law firm can be incredibly rewarding – personally, professionally and financially. But as you can see there is a significant amount to consider and prepare beforehand. So before taking the leap, make sure you have thought of everything.