How to Start a Legal Firm

Small start-up legal practices are on the rise, with lawyers setting up law firms across the country, attracted by the benefits of being self-employed and the potential to profit directly from their own effort, rather than working long hours and making money for other business owners.

In 2019, 523 applications were made to the Solicitors Regulation Authority for a licence to open a firm — 5% of the 10,399 firms registered with the regulator. This number is expected to keep growing, but running a successful law firm is no easy task.

Wondering how to start a legal firm? Find out what skills you need, the different paths you can take, important considerations to keep in mind and how to legally establish your business.

What Qualifications Do You Need to Be a Lawyer?

To practise law in the UK, you usually start by studying for a degree. This degree can be in law or a different subject, followed by a law conversion course or graduate law degree. After the degree, you will need specific vocational qualifications and in-work training to practise as a lawyer.

As well as educational qualifications and training, you will also need business management skills if you want to open your own legal firm. Running a business is very different from practising law. You will need advanced skills such as leadership, presentation, strategic thinking and project management.

Starting a Legal Firm: What Options Are Available?

Starting a legal firm is an increasingly popular career choice, so you’ll need passion and drive to set yourself apart from the competition. To get started, you’ll need to decide from the three options below:

1. Buy an Existing Firm — Many current small law firms are owned by “baby boomers” who have not given their succession plan or retirement much thought. It may prove to be less costly to buy one of these existing firms instead of building a client list from nothing. It can be a good idea to purchase a practice and keep the original owner as a consultant.
2. Start Your Legal Firm from Scratch — Many lawyers like the idea of being self-employed and making money directly without having the ability to reach the targets and demands set by clients. The option of starting your own legal firm from scratch is a good idea for lawyers who have the skills as well as the entrepreneurial drive needed to start a business.
3. Self-Employed Consultancy — Freelance consultancy is becoming increasingly popular because it allows you to provide services to one or more existing law firms as a wholly-owned service company or as a sole trader . The firm you work for will get a percentage of the fees you earn. Normally the percentage the firms take will range between 20% to 40% of the work you carry out for clients.

How to Start a Legal Firm

There is a lot to consider when starting a firm. You’ll need to create a solid business plan to help organise each step of the way. Here are several aspects to include in your business plan:

• Decide What Law to Practice — Your brand should be determined by what area of law you decide to focus on and to be successful, you should be interested in the area of law you choose. Specialisation can be risky; conveyancing, for example, is influenced by economic cycles. However, it is better to narrow your services and build your expertise.
• Where to Practice — In recent years, the need for a physical office has become less important, meaning you can save on all the associated costs. Thanks to changes in technology and cloud software, you can now practice anywhere in the world and keep your costs to a minimum. If you later decide to move to an office, you can use a serviced office to reduce risk and give you more flexibility than leasing space.
• How You’ll Attract Clients — Attracting clients takes effort. Thankfully technology can help with the task. A good website will give you a competitive advantage over more established competitors. High street firms usually find the majority of their clients are from the local area. Attending business events and networking with other local entrepreneurs is vital because referrals will drive a steady stream of work.
• How Much Investment You Need — Calculating the amount of money needed to cover cash flow is important. To reduce costs, you must be organised and invest in the right systems. Keep in mind your costing model, time-based billing or fixed fee etc. You can also apply for funding, even as a start-up.

Other aspects to consider for your business plan are your business model and legal structure, designing your recruitment strategy for hiring employees and creating a marketing plan that includes how to build your online presence.

Ready to Form Your Legal Firm?

If you are ready to start a legal firm, it’s time to form your company. Completing your company formation can be the most challenging part of starting a business, but it’s crucial to your success.

Are you going to start a legal firm? At Mint Formations , we help you form your limited company or self-employed business and take away the worry and stress of starting a business. We’ll secure your brand name and get your company registered fast, so you can start doing what you love.

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