Opening up your own law firm can be a tedious job. However, it should not overwhelm you. You can do it by organizing your expenditures and work around your budget and timeline. There is simple and basic checklist you should follow when setting up your own law firm startup. But remember that it should depend on your business needs.
Below is the checklist you should follow for the new law firm:
Determine the focus of your legal practice
First thing you need to do is define the law practice you want to develop and in what city you would want to put up the law firm. Business plan plays a vital role in setting up a law firm and it includes identifying your target clients, the services you will provide and in what location you would like to provide them. Define carefully the practice area and target market at the beginning, and enhance it in the long run. Common practice area these days are criminal proceedings, family, and anything related to corporate business. You can also have a bunch of corporate or family lawyers if that are the legal practice you will choose.
Form the business entity
After identifying the legal practice you want to do, you may now form your own entity for purposes of conducting business as a law firm. Upon choosing the business entity, you need the following: Certificate of Formation, Bylaws, and an Employer Identification Number (EIN) from the Internal Revenue Service. New law firms may opt for Sole Proprietorship, Partnership, Professional Corporation, or Limited Liability Corporation.
Opt for a name of the firm
This is one of the most essential things you need to decide on. Your law firm will be identified and remembered with the name you select. Usually, law firms use the names of the attorneys involved in the business. Another option is to use a name relating to your practice area.
Create law firm bank account
A bank account for your law firm will be helpful in the financial aspect of the business. Banks offer various options and flexibility for any type of business accounts. Line of credit will also help the firm with the initial start up costs and keep cash liquid as you begin creating your business.
Setting up accounting needs
A law firm needs a professional accounting service that will work tax, income and expenses. Accounting needs require hiring CPA to create your initial chart of accounts and set up your business financial architecture. You will also need to retain their services for filing taxes at fiscal year end. Your accountant will help you set up accounting procedures, bank and trust accounting systems/reconciliation procedures, and even in payroll services.
Insurance will also play a vital role in the company. There are several types of insurance that will work in your law firm such as health insurance, general liability insurance, professional liability insurance, workers compensation insurance, and more.
Employ important staff
Law firms do not function with attorneys alone. Secretaries, messenger, HR, and alike are important part of the organization and will help the business run smoothly.