This article first appeared in Virginia Lawyers Weekly.
We started a law firm 10 years ago with a pen, a piece of paper and a pitcher of beer. Little did we realize at the time how rewarding our partnership would be. But for the same reasons it can be rewarding – you’re your own boss and your success is based on your efforts alone – it can also be terrifying. As we celebrate our first decade together, we wanted to share six important lessons we learned from our experience.
1. It’s Really Important to Have a Niche
Lawyers who start their own firm face a threshold decision: Go deep or go broad? We chose deep, and having a defined niche was one of the most important strategic moves we made to enable the growth of our firm. And we’re not alone. Many firms gain traction and momentum by narrowly focusing on discrete markets (in our case, retail and renewable energy) rather than trying to appeal to everyone.
One of the key benefits of having a niche is that it allows a small firm to reduce competition. And when a small firm is focusing only on one, or a small number, of substantive areas of the law, it can be seen as a viable alternative to larger firms for larger clients, whereas a generalist small practice may not be. That means competing on expertise, not price. By competing on expertise, we found that we could be more profitable, which allowed us to grow into new practices and open new offices.
2. Collaborate – Don’t Compete
Another important strategic decision we made was to view larger firms in our space as potential collaborators – not just competitors. We focus on building relationships – not burning bridges – with lawyers at larger firms. And over the years this has led to significant referral work coming our way when a large firm can’t serve a client due to a conflict or rate pressure.
Every lawyer and law firm can (and should) approach relationships with “adversaries” with a similar abundance mindset. Of course, vigorously represent the interests of your clients. But don’t overlook the fact that the legal community is small. And strong relationships with colleagues within and outside of your firm can be your most valuable asset.
3. Run Your Firm Like a Business
If you want to experience the autonomy and other benefits of practicing law on your own terms, you need to run your practice like a business. That can be a challenge for many lawyers who aren’t accustomed to things like hiring, firing, managing cash flows and vendors – things we’re not taught in law school, and that other people handle when you’re employed by a firm.
One of the ways to run a firm like a business is being strategic about the hiring of attorneys and staff. Small firms sometimes mistakenly hire people too soon based on faulty assumptions about potential growth. It’s important to manage growth intentionally, which often means not just waiting until you feel stretched thin before hiring, but also knowing that the reason you’re stretched is going to continue. It’s critical, in particular, to take your time and get things right with your first few hires given how much a bad hire can impact your firm when you’re small.
4. Pick the Right Partner
If, like us, you’re going to start a firm with at least one partner, then choose wisely. More than anything, make sure you have a shared vision. Everyone wants their firm to be a success, but “success” can mean very different things to different people. For example:
● Do you want to make millions of dollars per year?
● Do you want to be home for dinner at 6 p.m. every night and never miss your kids’ sports games and dance recitals?
● How large of a firm do you want to build?
We talked about all this and more when forming our firm. We still talk about it today. The takeaway is that if the vision is not aligned, then the partnership won’t work.
5. Consistently Market Your Firm and Upgrade Your Relationships
As a small firm, it’s easy to get caught up in an endless, up and down cycle: You get slow, you market like crazy. Work comes in, you stop marketing. It’s exhausting and it’s no way to grow a firm.
It takes discipline and effort, but a better way is to consistently engage in marketing, and the best forms of marketing involve developing relationships with clients and referral sources.
Over the years, we’ve invested in our brand and related advertising. But the highest return on investment has been from the initiatives we’ve undertaken to directly interact with people. We have a breakfast every other week with key contacts in Richmond. We host a big cocktail party every year at one of the main retail energy conferences. We recently started a book club with clients. Some ideas work better than others, but we’re not shy about putting ourselves out there.
It goes without saying that you have to do great work and build trust to generate work. You also have to stay top of mind, and that means consistently engaging in marketing and networking.
6. Give Back and Focus on Community
One of the most rewarding aspects of this entrepreneurial journey is having the ability to give back to the community. It’s pretty cool to see your firm’s name (which happens to include YOUR name!) on a local Little League team you’ve sponsored.
Being in a position of leading a law firm also allows you to address issues impacting the legal community you work in, not just the community you live in. Even small firms can make a big impact. For example, we recently endowed a $100,000 scholarship at the University of Richmond School of Law which is geared toward law students with diverse cultural and ethnic backgrounds. It’s the best investment we’ve made.
Lesson: Whatever value you add to the various communities you’re immersed in, you’ll get much more back in return.
Starting a Law Firm: Not for the Faint of Heart, but Definitely Worth It
Starting and running a law firm has not been easy – nor should it be – but even if we had the chance we wouldn’t do it differently. If you’re considering hanging a shingle of your own, hopefully these six lessons will help put your firm on a path to success.
P.S. from Brian, Eric and the entire GreeneHurlocker team: Thank you to our clients, colleagues, family and friends for making the last ten years possible. We couldn’t have done it without you!