Hi. I've been enjoying your blog. I've been trying to get the courage to set up my own law firm, and your blog is one of the most positive sources online. It should be said however that I'm here in Ireland, where the economy has completely tanked, and lawyers professional indemnity insurance is prohibitively expensive - a new sole practitioner is looking at €10,000+ which I think is about $12,000...Unlike in the US its not really feasible to practice solely as a DUI or Road Traffic Offense layer. Here, we tend to offer services across the board, from property work to wills and Probate to crime. Nonetheless, I think the key is to keep overheads low, market agressively and make sure you get paid for any work - those principles apply here too. Keep up the blogging. You'll probably be pleased that you,ve gone global!To do this right we are going to break down each of these statements and really see if there are problems to be solved or if there are assumptions being made that may or may not be true out there in real life.
Here we go!
Before I get too far I want to point out that I'm not being critical of what the commenter said. In fact, I'm glad he or she had the guts to write in - that means they are serious about exploring starting a law firm. But if you are going to do this right, you've got to be open to hearing new ideas and having your ideas challenged. I'm going to do it for you now and I urge you to do it for me in the future (and trust me, I have people that do this for me now).
As I read the comment I noticed one thing immediately - excuses. Read it again, and imagine that he started by saying "I really want to start a law firm. But insurance is too expensive and there isn't enough work doing what I really want to do so I'm going to have to do a little bit of everything" instead of the way that he did. That's really what he's saying, right? So this is thought number one - try not to look at things as roadblocks or reasons why you shouldn't do something, particularly if you haven't thought out potential solutions to those roadblocks. Look at them as opportunities if you can.
Let's talk about the insurance first. So you have to pay $1000 a month for insurance. That sucks. But I wouldn't call it prohibitively expensive. And have you looked into what it costs if you tell the insurer that you practice one area of law specifically? If I were an insurer and you told me you did everything I'd charge you a bunch too. In the states our rates are based on our practice area - some are understandable riskier than others. Call your insurer and see if they'll adjust the rates if you promise to stick to a couple of specific areas of the law. The worst they can say is no.
Next, practice area. When you are starting a law firm, or thinking about it, one constant that runs through your mind is "what if no one calls." To subdue that fear you may plan to take whatever case comes in the door. If they pay you'll play. But I can tell you first hand when played out in the real world the opposite is true. If you are a general practitioner you end up making less money, getting less clients, and hating what you do.
The easiest way to put this into perspective is with an example. Let's say you are a potential DUI client or criminal client. You've just been charged with a crime and you need help. You start looking around and you find five attorneys that look at least outwardly promising. Four of the attorneys advertise that in addition to criminal defense they do wills, trusts, business planning, contracts, divorce, personal injury, transactional work, and trademark work. The fifth advertises that he's a criminal defense attorney. He's got a niche practice. His marketing materials are informative and provide a depth and level of information that the others just don't. This attorney actually answers your questions. Who would you choose if you needed criminal defense help?
So will your clients.
Let's take it one step further. Now the potential client comes in to talk to you. You tell him about your practice, answer all of his questions, and can tell him honestly that you focus specifically on criminal defense so that you can provide your customers the best opportunity for success. And then you tell them that your fee is double whatever anyone else charges. And then they pay it!
Let me break out here for one second. Clients will pay you higher fees for two reasons. First, they want someone who knows what they are doing. And they want someone who has an expertise in the area of law they need help with. The fact that everything about you says you are focused on this area of law is great for that. But second, and no less important, the higher fee conveys the exact same message! Believe it or not, people will pay more something if they see the value in it. And the higher price itself implies higher value!
Here's another advantage of choosing a practice area and sticking to it - you can identify your perfect client and then begin to go after them. You can also let others know who your perfect client is so they can start sending you business. General practitioners will take anyone. That means you have no target audience. If you focus on a practice area you can determine who your ideal client is and target them.
And finally, one last great thing about specializing, particularly in a market where no one specializes. Whatever practice area you choose it's not going to take you very long to become known as "the" guy that does whatever you do. The more you market yourself as a criminal lawyer as opposed to a lawyer, the more people will start to know you for that, and send business your way.
This whole discussion goes back to another important point I'd like everyone to consider when putting together your law practice and thinking about which direction you are going to take your practice - just because everyone does, or doesn't, do something doesn't mean it's the right, or wrong, thing to do. People love the status quo because it's safe. Everyone must be doing it because it works, right? Wrong. Everyone's doing it because they are too scared to be left behind instead of thinking about whether or not it works for them. A perfect example of this is the thought that specialized practices won't work because one else is doing it. The way I see it, that's exactly why it will work!
That's it for me for now. As always, if you have questions, let me know. If you disagree, let me know.
