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What should I know if I want to open my own law firm in the future?
Is double majoring in business encouraged for opening a firm?
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Matthew L. Tuck, J.D., M.B.A.
CEO/Managing Attorney, Greater Detroit Area
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Hi Roel.
Great question. I’ve opened up my own law firm (twice) so I know a little bit about it. Doing a pre-law and business degree in undergrad is definitely a good plan if you like business.
A lot of it has to do with what type of law you want to practice. Some specialties are more suited to opening your own firm than others. For example, if you go into immigration law, criminal defense, estate planning (wills, trusts), personal injury (representing people who have been injured in car accidents or by negligent doctors, for example), or family law (divorce, custody, support), you will have an easier time.
If you find you enjoy other areas of law, for instance prosecution, municipal/city work (bonds, zoning work, condemnation), big environmental protection work, or working with indigent/homeless people, it may mean you have to go to work for a government agency or larger non-profit group. Those types of jobs don’t really exist for people with small firms because the work is done by government or government funded organizations. There is other work, like corporate tax work, working for labor unions or big mergers and acquisitions of companies, that may require you to work for a larger firm. Large companies, big unions don’t generally hire small firm or solo lawyers to do (unless you have been doing it for a long time and have made a reputation for yourself doing that sort of law).
The great thing about criminal defense or estate planning is you can have a your own law firm for that. And depending on your personality type, solo or small firm work may be much better suited to you than working at a big firm or for a large government agency. Large organizations can be very political and tend to make big demands on your time and can limit your freedom to work on the types of projects you enjoy.
To answer the second part of your question, gaining business knowledge is essential if you want run your own successful, profitable firm some day. In my experience, most lawyers are terrible at business. What too many lawyers don’t understand is that running a law firm is a business and there are two vital skills you need to have:
(1) Being a good lawyer who knows how to represent clients; and
(2) Being a good business person.
The importance of the first component is obvious. You have to be a good, competent lawyer to have a successful business. You have to stay current on the law, be good with clients, get good results for clients, and be very ethical. In many ways, being a good lawyer is your day job which requires you to meet with clients, go to court, review documents, prepare government filings, etc.
The second part of job is very different but just as important. Running a successful business requires you to wear many hats. You can get help with some of the hats (a you you should get help), but you need to wear all of them. Here are some of the roles that you need to get good at and which you can learn in business school:
-Sales and Marketing - As the owner of the firm, you are responsible for marketing your firm and getting new clients in the door. Without new clients you are out of business and understanding how to find and reach the clients you want is complicated. With the internet, prospective clients can research hundreds of attorneys in a very short time. If you cannot differentiate your firm from the others, you won’t get many clients. Here you can get help from an internet company to manage your website and online marketing, but you should understand the basics.
-Finance & Accounting - You must understand how accounting works to manage a firm effectively. Accounting software helps (like Quickbooks or Peachtree) but you need real experience to make it work. Here is where expert help comes in. You can and should hire a CPA accountant to handle your books and taxes. An office manager can also help with this.
-HR - You need to get good at reading people and cannot be afraid to fire them. You likely will hire and fire a lot of people before you get the right team together, even at a small firm. Managing people is the hardest part of owning a small business by far.
-Technology - You should understand the basics of hardware and software. Here again, you can get help from a computer vendor, but you have to have at least basic familiarity with it all.
-Licenses and Government Requirements - Depending on the state and city where you open your firm, you will likely have a lot of government regulations to deal with. You must understand these.
-Policies and Procedures - This is an area where almost every business falls short if they have even 1 employee. You must have written polices and procedures to spell out how to do things, who is responsible for doing them, and why. This is the only way to scale (grow) your business, if that’s what you want to do.
These are just a few of the areas you must have at least a basic understanding of to succeed.
One reason many lawyers go to work for bigger firms, corporations or government agencies is that they don’t like the second component of owning your own firm. They don’t like accounting, sales, marketing, Human Resources, hiring and firing staff, managing money, dealing with licenses and permits, paying utilities, worrying about taxes, software, computers, copy machines, watering the plants, and all the other things that come with owning a small business of any type.
A couple great books to read on the subject that I just love are “The E Myth for Attorneys: Why Most Legal Practices Don’t Work and What To Do About It,” by Michael Gerber, and “Fireproof”, by my friend from law school Michael Morse. Great guy and super smart about marketing. He also never gives up, which is the most important part of owning your own business, no matter what type it is. The firm he started makes about $300 million per year. These books will either get you really excited about owning your own firm or will scare the heck out of you. But they are good.
These are great questions. The more you can learn about entrepreneurship and running a small business, the better.
And lastly, don’t be too hard on yourself. Running a business involves a lot of trial and error. No matter how many books on business you read, you will make mistakes. The trick is to not let them get you down. Get up, fix what is broken, and try again.
Good Luck!
Learn how to be a great lawyer. Great lawyers will make clients happy and get more client referrals.
Learn everything you can about entrepreneurship and running a business. Study how computers and software work, how sales and marketing works, learn accounting and finance.
Keep your options open. Owning a small firm may not be for you. Use law school as an opportunity to figure out what kind of law you like and how attorneys like running their own firms.
Never give up.
Great question. I’ve opened up my own law firm (twice) so I know a little bit about it. Doing a pre-law and business degree in undergrad is definitely a good plan if you like business.
A lot of it has to do with what type of law you want to practice. Some specialties are more suited to opening your own firm than others. For example, if you go into immigration law, criminal defense, estate planning (wills, trusts), personal injury (representing people who have been injured in car accidents or by negligent doctors, for example), or family law (divorce, custody, support), you will have an easier time.
If you find you enjoy other areas of law, for instance prosecution, municipal/city work (bonds, zoning work, condemnation), big environmental protection work, or working with indigent/homeless people, it may mean you have to go to work for a government agency or larger non-profit group. Those types of jobs don’t really exist for people with small firms because the work is done by government or government funded organizations. There is other work, like corporate tax work, working for labor unions or big mergers and acquisitions of companies, that may require you to work for a larger firm. Large companies, big unions don’t generally hire small firm or solo lawyers to do (unless you have been doing it for a long time and have made a reputation for yourself doing that sort of law).
The great thing about criminal defense or estate planning is you can have a your own law firm for that. And depending on your personality type, solo or small firm work may be much better suited to you than working at a big firm or for a large government agency. Large organizations can be very political and tend to make big demands on your time and can limit your freedom to work on the types of projects you enjoy.
To answer the second part of your question, gaining business knowledge is essential if you want run your own successful, profitable firm some day. In my experience, most lawyers are terrible at business. What too many lawyers don’t understand is that running a law firm is a business and there are two vital skills you need to have:
(1) Being a good lawyer who knows how to represent clients; and
(2) Being a good business person.
The importance of the first component is obvious. You have to be a good, competent lawyer to have a successful business. You have to stay current on the law, be good with clients, get good results for clients, and be very ethical. In many ways, being a good lawyer is your day job which requires you to meet with clients, go to court, review documents, prepare government filings, etc.
The second part of job is very different but just as important. Running a successful business requires you to wear many hats. You can get help with some of the hats (a you you should get help), but you need to wear all of them. Here are some of the roles that you need to get good at and which you can learn in business school:
-Sales and Marketing - As the owner of the firm, you are responsible for marketing your firm and getting new clients in the door. Without new clients you are out of business and understanding how to find and reach the clients you want is complicated. With the internet, prospective clients can research hundreds of attorneys in a very short time. If you cannot differentiate your firm from the others, you won’t get many clients. Here you can get help from an internet company to manage your website and online marketing, but you should understand the basics.
-Finance & Accounting - You must understand how accounting works to manage a firm effectively. Accounting software helps (like Quickbooks or Peachtree) but you need real experience to make it work. Here is where expert help comes in. You can and should hire a CPA accountant to handle your books and taxes. An office manager can also help with this.
-HR - You need to get good at reading people and cannot be afraid to fire them. You likely will hire and fire a lot of people before you get the right team together, even at a small firm. Managing people is the hardest part of owning a small business by far.
-Technology - You should understand the basics of hardware and software. Here again, you can get help from a computer vendor, but you have to have at least basic familiarity with it all.
-Licenses and Government Requirements - Depending on the state and city where you open your firm, you will likely have a lot of government regulations to deal with. You must understand these.
-Policies and Procedures - This is an area where almost every business falls short if they have even 1 employee. You must have written polices and procedures to spell out how to do things, who is responsible for doing them, and why. This is the only way to scale (grow) your business, if that’s what you want to do.
These are just a few of the areas you must have at least a basic understanding of to succeed.
One reason many lawyers go to work for bigger firms, corporations or government agencies is that they don’t like the second component of owning your own firm. They don’t like accounting, sales, marketing, Human Resources, hiring and firing staff, managing money, dealing with licenses and permits, paying utilities, worrying about taxes, software, computers, copy machines, watering the plants, and all the other things that come with owning a small business of any type.
A couple great books to read on the subject that I just love are “The E Myth for Attorneys: Why Most Legal Practices Don’t Work and What To Do About It,” by Michael Gerber, and “Fireproof”, by my friend from law school Michael Morse. Great guy and super smart about marketing. He also never gives up, which is the most important part of owning your own business, no matter what type it is. The firm he started makes about $300 million per year. These books will either get you really excited about owning your own firm or will scare the heck out of you. But they are good.
These are great questions. The more you can learn about entrepreneurship and running a small business, the better.
And lastly, don’t be too hard on yourself. Running a business involves a lot of trial and error. No matter how many books on business you read, you will make mistakes. The trick is to not let them get you down. Get up, fix what is broken, and try again.
Good Luck!
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