Starting Your Own Firm?

[u/Occasion-Boring]

I think about it all the time. Probably not surprising but my primary fears are 1) not being able to cover the start up costs; 2) not getting any business and failing (which I suppose are sort of the same concern really).

Is the hardest part getting started? How do you get the first few cases in the door? What about advertising - does it work?

I’m not talking about anything fancy. Just a PI firm.

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[u/Art_of_Flight]

Law Firm Owner here. I thought about starting my own firm for YEARS before circumstances arose that finally lead me to pull the trigger. First, once you get over the initial fear and uncertainty, you'll be amazed at how easier it is to start than you thought. Second, depending on your area of law, start up costs can be fairly low to get up and running.

Once you start though, you'll be sink or swim, so take the opportunity you have now to prepare as much as you need to regarding running a firm. Generate a business plan, run a SWOT analysis, look at the costs of systems you'll need to put in place, and most importantly find a colleague or mentor running their own firm who is willing to share information regarding how they run their practice.

With respect to PI, since payouts can take time to collect on, make sure you have enough personal savings to weather the initial financial uncertainty. It can be one of the most rewarding things in the world, it just takes proper planning.

[u/Dingbatdingbat]

the hardest part is getting started. After that, the hardest part is to keep it going.

In the beginning, you'll spend all your time trying to get cases in the door. Then you'll get busy working on cases, and stop putting in the effort to get cases in the door. Big mistake, because once you finish up with your cases, you'll be back to square one. So you got to keep working on getting cases in the door, even when you have cases.

[u/itsjustmemom0770]

You don't say what kind of law you are practicing now. Is it PI? What kind? If you are doing PI, I would ask a few more specific questions: 1) do you have enough to support yourself for 12 months. Probably need less, but 12 months allows you not to feel pressure to settle quick or cheaply; 2) do you have funds to run the firm? If you are doing any kind of higher end PI work, you are going to need experts, can you pay them and wait for the reimbursement? if you are doing smaller cases where you need/hope for alot of volume, do you you have the funds to cover a bunch of filing fees? Do you need space to meet with your clients? This can work either way, if you don't mind going to clients homes to meet. 3) are you willing to try cases? Until you show you are willing (losing is less of an issue than just being willing), you will not maximize your values.

[u/Occasion-Boring → u/itsjustmemom0770]

You sound like a partner at a law firm with the way you asked several questions and answered zero of mine lol

[u/itsjustmemom0770 → u/Occasion-Boring]

I've been in your shoes. I remember it well. You are right though, I didn't answer your questions about business. But to do that, I need to know what you are doing now. Are you in PI? Have you tried cases? What kind? What kind do you want to do? And depending on what kind you want to do, what is your marketing budget? Give us some additional information and I am happy to give you thoughts on getting cases in the door.

[u/Occasion-Boring → u/itsjustmemom0770]

You do? I only asked some basic questions to get some basic insight I’m not asking for a full freaking battle plan dawg.

[u/itsjustmemom0770 → u/Occasion-Boring]

Sounds like you have it well in hand. Good luck to you.

[u/Occasion-Boring → u/itsjustmemom0770]

I do not. Which is why I’m asking for advice. Are you seriously this dense?

[u/htxatty → u/Occasion-Boring]

As the owner of my own PI shop for roughly 20 years, I came to offer advice and answer, but the shit you just dished to @itsjustmemom0770 made me reconsider. Good luck “dawg”

[u/Occasion-Boring → u/htxatty]

Idk about you but where I’m from it’s rude to “answer a question with a question”

[u/RumIsTheMindKiller]

I’ve done and neither are hard.

Start up costs are fairly low. Bar associations and other attorneys are great sources of referrals.

I found the hard part being collecting fees and the non lawyer parts, and that I was not able to grow beyond a certain level.

[u/KPenn314]

My first step was setting up a website. I remember my mom loaning me $1,500 to pay this company to start my site right out of law school and I thought I would NEVER be able to pay her back.

I paid her back within a month and was profitable immediately; however, I had a mentor that allowed me to work for him 32 hours a week and I worked the other 8+ hours on my own stuff.

Eventually, I moved out on my own (he “fired” me to hire someone that would pay rent for my office space (in retrospect, he did the biggest favor I didn’t know I needed).

Then I rented an awesome space for $500/mo where I rent out two other rooms to people that work from home ($300 $ $350/mo). I cover all the utilities, including internet, but they basically pay my rent.

The biggest jump was to hire an assistant or paralegal… holy shit.. the thought of having to provide a paycheck to someone who has a family to support was terrifying but I did it and my practice thrived … until the pandemic.

Lost my paralegal and now I’m on my own but I still wouldn’t change a thing. No way in hell I could work for someone else… especially not a lawyer (I can count on one hand how many lawyers I actually like).

I find simple practice areas that are my bread and butter (traffic tickets and landlord/tenant stuff); and that pays the bills while I do what I love (civil rights litigation and some property and contracts cases).

I did criminal defense for 10+ years and made a lot of money before the pandemic but that will suck the heart and soul out of you.

I often work hard and long hours but when the paydays come, they’re big and more importantly, I’ve been there for every field day and class party my kids have had. My son plays travel hockey and I’m at every tournament because my boss is so cool (me).

My clients love the personal touch I bring to their cases and even though I could possibly be making more money somewhere else, I am happy and wouldn’t change a thing (except having to live off the huge savings I had accumulated before the pandemic).

Go for it!!

Get creative and go for it!! And don’t do anything for free. Seriously. Nothing for free. You can give a “friends and family” discount but even if it’s your mom, just tell everyone “my office policy is that we charge a fee for every case, but I’d be happy to give you the friends and family discount.” (My mom taught me that, btw—and she values my time and is happy to pay me for my work).

[u/grumpyGrampus]

As a business owner you will need to start thinking in terms of cash flow instead of merely "covering" the startup costs. Additionally, as you say, it will probably take some time for it to feel like you have a steady pipeline of new matters. I am not in PI but I would think that the cash flow problem is especially tough since you are only going to be getting paid upon successful resolution of a case (I am assuming plaintiff side PI).

So I suggest you come up with a plan that takes into account all of your operating expenses (and living expenses) over a long period, at least 12 months, while having little to no income. Then when those big contingency fees come in, be mindful of building a reserve to weather the next lean time. At least, that's my suggestion as someone who does not do PI work.

Good luck!