Starting a Law Firm | Leaving Another Firm

I'm such an idiot. I have been writing these posts about starting a law firm here for a couple years now, and not once have I talked about what you should be thinking about if you are leaving a firm to start another one. Stupid! Stupid! Stupid!

Okay, I might be being a little hard on myself. But I have completely missed what is a very relevant topping with regards to starting a law firm. It took a lunch with a great attorney this week for me to realize people are doing this every day and I should talk about it on here.

I will probably talk about it more in the future, but for today I thought I'd break it down into the three most important things you should consider when starting a law firm by leaving a law firm. And, just to be clear, what I'm talking about is leaving to start a competing law firm.

1. They are Your Clients Too

Before I get too far into this, I want to point out that I'm talking in generalities here. Before you go running off half-cocked with half of your current firm's clients, make sure you are following the rules in your state regarding how this should be properly done. Okay, disclaimer over.

When I was in Kansas, I worked at a firm where I had no rainmaking responsibilities. The owner of the firm had his clients, and he was good with that. We didn't get to talk to the clients, and we weren't expected to bring in new business. We were truly just attorneys practicing law.

Most of you out there, though, aren't in that situation. You come to a firm, learn the ropes, and then start letting people know what you do. As they need help they come to you specifically or call the firm because of your connection and get signed up. You may not do all of the work on their cases, but you do some of it. In some ways you would consider these people "your" clients.

One of the first things you need to do when you consider opening your own law firm is to figure out how to let all of "your" clients know you are leaving and give them the option of coming along. I don't know the rules in every state but I do know this - it is the client that chooses the attorney, not the other way around. If you are leaving and you have been working with the client, they have the option of choosing to have you continue to help them.

Just because you can do that, though, doesn't mean you should tread lightly and think through in great detail how you are going to undertake this endeavor. You don't want to burn any bridges, but you are entitled to help people that want your help. If you have decided to open your own business you have accepted the responsibility of making tough decisions. This will likely be the first of many.

What would I do if it was me? I'd do two things. First when I let the firm know I was leaving, I would talk to them about my clients and work out an agreement for splitting any fees that may have already been placed in the trust account and an agreement for letting clients know I was leaving and what their options were. And I would put this in writing. You know what an oral agreement is worth.

Second, I'd let the clients know I was leaving, what I was doing, when I was doing it, and that they were free to come along if they wanted to. I would do it in writing and in person (if permissible). Remember, you aren't poaching clients here, you are allowing them to make an informed decision.

If you've been reading this blog you know that finding and signing up clients is the key to your success. To simply forgo a wealth of potential clients to avoid stepping on toes or making people feel uncomfortable is irresponsible of you as a business person.

Oh, and by the way, you should be prepared for the owner of your firm to get pissed. Let's talk about that next.

2. A Well Planned Exit Strategy

When you go and tell your boss that you've decided to go out on your own, open an office next door, and compete directly with him, typically one of two things will happen:

(1) You'll immediately be fired; or

(2) You'll help with your "exit," but you'll just be giving the owner time to make sure all of his or her clients are going to stay with them.

Either way, I'd say it's important for you to have a plan before walking into the bosses office.

Most of the stuff you can do on the fly, after you've officially announced your departure. Insurance, website, business cards, etc. can all be set up in a really short amount of time. What you want to have in place, your "plan," is a marketing strategy, a "how to keep some of your current clients" strategy, and a time frame for when you announce your departure to when you actually leave. It's possible that you could have to implement that strategy very shortly after you talk to your boss.

3. Don't Let the Cat Out of the Bag too Early

One of the things I talked about with the attorney I met this week was whether or not it was okay to talk to other attorneys about her departure from the firm. There was the opportunity to share some office space with some other attorney and they thought it would be a good fit. But the attorney was a little hesitant to talk to these other attorneys because they know the attorney's boss.

And hesitant they should have been.

If you are new to the practice of law or don't have a lot of contact with other attorneys I have one piece of information that is going to be invaluable for you - we are a bunch of chatty Cathys. We sit around waiting for hearings, waiting for depositions, going to CLEs and we don't want to talk about work so we talk about the next best thing - what our fellow attorneys are up to. It's human nature, and attorneys are bad about it.

I would expect the moment the attorney left the office that a phone call would be made to their boss about the exchange that just took place. When that happens suggestions one and two get messed up - you can't figure out how to keep your clients and you don't get to control the message of your leaving the firm.

Bottom line, keep this idea close to the vest until you are ready to let everyone know. You know the old saying by Ben Franklin: "Three may keep a secret, if two of them are dead." The more people that know your plan, the more likely it is to get out.

4. Control the Message

I remembered this fourth one while I was writing this so I thought I'd include it. I'll keep it short.

One of the great things about having a plan for your move is that you get to control the message. You get to announce your departure to your boss, you get to announce your departure to your clients, and you get to announce your departure to your colleagues. When you get to do this, you get to spin in it in a positive light.

Put together a time line for client letters, new firm announcements, etc. before you leave so you get to frame your departure from your old firm and the beginning of the new.

Okay, that's it for today. As usual, if you have questions let me know. Thanks for reading. Hopefully I'll have something cool to say on Friday.