Three Important Considerations When First Starting Your Personal Injury Firm
June 28, 2016
Starting (and maintaining) a successful legal practice may be one of the most challenging feats you accomplish in your legal career. While your smashing success in law school and early in your career may have influenced your decision to step out on your own, juggling a heavy personal injury caseload while figuring out all the operational complexities that come with running a company are bound to make even the most capable PI attorney feel some amount of stress.
For those feeling brave enough to take the plunge, here are a few things to consider before putting in your notice and starting your own personal injury practice.
Understand What You’re Leaving Behind
This may seem like a no brainer. However, many attorneys who set out to build their own PI firms don’t have the experience, contacts or open network they need to be successful. Are you considering whether your current and past positions have set you up to succeed on your own?
Before starting your practice, examine your contractual obligations at your current firm. Are you able to take your current clients with you or will you have to leave them behind? Personal injury law is unique in that cases are often handled by one primary contact instead of a larger team. If you’re in the middle of a case when you decide to set off on your own, you may be under the assumption that all of your open cases can leave your firm with you. But the first rule of starting your own PI firm should be “don’t assume anything.” Read your contract closely and figure out what’s allowed. Stepping out on your own may mean starting from square one, but if you’re truly driven and ready to network your way to success, new clients will come your way.
Another important consideration to make before leaving your current firm is your experience level. Have you really gained the proper experience to step out on our own? While you can gain many of the skills you need to excel in your own practice on the job, you should have at least some comfort with things like business finances and employee management before you make the jump to self-employment.
Build a Strong Business Plan and Understand How You’ll Make and Spend Money
Starting a successful personal injury firm requires real business savvy. Before starting your firm, get a business plan in place — and not just a “mental” plan. Put pen to paper (or fingers to keyboard) and map out your business growth and revenue goals, marketing channels, technology strategy and other details. Considering items like these before you throw yourself into running your own firm is critical to your success, especially in the early months.
Your firm will live and die by its budget, so getting clear on what you can expect to have coming in and going out is crucial. If you’re starting your firm with a handful of existing clients, project the revenues you’ll earn from them for the first year of business, and add in a reasonable amount of month-over-month revenue growth.
In your first months on your own, estimating overhead may actually be easier than estimating revenue. Develop a budget that includes a reasonable salary for yourself and any employees you plan to hire (Inc says your firm should be generating at least $150,000 in revenue each year per employee), legal tech costs, office space and outsourced expenses and keep things lean where you can. For example, if you’re starting out as a solo practice, you may want to consider home consults in those first few months to save money on office space.
Get Your Technology In Order
Assessing your legal technology needs and finding the right tools to address them should be one of your top considerations before starting out on your own. As you likely know, legal tech has come a long way in recent years – especially for personal injury lawyers. While personal injury law can mean dealing with never ending stacks of liability paperwork and time consuming forms, legal technology tools can greatly reduce the time spent on document preparation and management. Even so, finding the right legal tech tools can still be confusing, especially when you’re first starting out.
Not all legal tech tools emphasize business growth and many of the options you may come across will be better suited for larger scale operations. Smokeball’s practice management software is created specifically for small law firms, and we offer a personal onboarding process through which we customize the tool to your specific needs. We also have form suites set up specifically for personal injury law, so many of the forms you use regularly are likely already in our system.
Starting a personal injury practice is no small feat, but it’s also an incredibly rewarding endeavor. Spend some time thinking through these considerations and getting a plan in order, and if you need more help, don’t hesitate to contact us.