Plan to succeed when opening your own firm

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So you’re thinking about opening your own firm. Maybe you’ve even made the decision to do it.

Now what?

“If it’s something you’re considering, you want to go in as eyes wide open as you can,” said Peter Osman, an attorney at Madison-based Borakove Osman, which he helped found. “If you’re going to start a practice, you better be ready to not have many nights available for the next year or two. And, once you make that decision, it really will feel like [you’re working] 24 hours a day.”

Those taking their maiden solo flights should also get ready to second-guess themselves almost every step along the way.

“It would be a mistake to say, ‘I’m not going to start this thing until I have everything pinned down,’ because then it might never happen,” said Mark Goldstein, who opened Goldstein Law Group in Milwaukee in 2007 after 13 years of previous practice.

“It’s OK to not know everything as you go forward; there are going to be things you learn as you go. … It took me a while to get a plan together, and the plan evolved a little more organically than I would have hoped.”

Just remember, Goldstein said, “You will make lots of mistakes. Don’t beat yourself up too badly.”

Well, that’s the pep talk. Now, let’s get into what it takes to really establish a practice.

Choosing a direction

For Osman, that started with figuring out what he did — and didn’t — want to do.

“I would strongly recommend knowing what you want to do in a legal practice,” said Osman, whose firm specializes in estate and business planning, as well as estate administration and laws concerning the elderly.

“You see so many people go out on their own and take whatever comes in,” he said. “You’re still going to end up with a focused practice. It’s just not going to be a practice of your choosing. I know it’s scary limiting yourself at first, but you really should.”

It’s a lesson Sam Owens wishes he had learned a little sooner.

After graduating law school in 2007, Owens went abroad, working in research and academia until 2012, when he opened Owens & Freeman in Madison.

Worried that he wouldn’t make money, Owens took whatever work came his way.

“I started off the way I think most people start off as a solo practitioner, doing general practice,” said Owens, who now specializes in employment discrimination. “I unintentionally stumbled upon a niche. And that helped me become profitable.”

But, until he found his way, Owens took clients and cases that probably weren’t the best fit for his firm.

“I hesitate to tell anyone they should absolutely avoid certain situations, because I know I had to experiences those situations to know what clients I should avoid,” Owens said. “But I really appreciate people who turn down more cases and clients that are going to demand expending more resources than you can provide.”

Pressure to earn

It’s a tough balance, admitted Jenna Atkinson, a Madison marketing consultant, who works regularly with independent lawyers and small firms.

“Attorneys can work with a wide range of people, but if you develop a niche you’ll be able to infiltrate much faster,” Atkinson said.

All the while, there is the pressure to earn, which is often intense when someone is trying to a give new firm a sound foothold.

“And it can be really frustrating, if you’re not realistic about your billable hours,” Goldstein said.

For many years, Goldstein wasn’t realistic about his time.

“I looked at the week and saw the capacity for 40 billable hours. Then, you find out at the end of the week that you not only billed 20, but you really only had a chance at 25,” said Goldstein, who works primarily as outside corporate counsel for small and medium-sized businesses.

Eight years into running his firm, Goldstein added, “I wouldn’t say I’ve figured it out entirely, but I’m not as hard on myself as I used to be. I used to feel like, ‘I’d failed, I’d failed, I’d failed.’ Now, I say, ‘Even if there were 40 billable hours in a week, I never had a chance at 40. So, 25, 30 is a significant achievement, especially if you’ve got a sick child. So, I go easier on myself than I used to.”

Success largely entails keeping track of the bottom line. To do that, Goldstein has found ways to measure his business’s performance and analyze things like cash flow.

“They give us a dashboard on how were doing. It’s an important counterpart,” Goldstein said. “It takes us back to the metric of billable hours. It’s unemotional, and it’s a recognition that – at the end of the day – you need to make money.”

Partner or no partner?

For some attorneys, striking out on one’s own inevitably means going it solo. For others, taking on a partner adds a sense of security.

“The best decision we made was to go into this as a partnership,” said Osman, who joined a former colleague, Shayna Borakove, when he decided to go out on his own in February 2011.

For them, it was an easy decision. They knew each other from previous jobs, knew they had similar ideas about the law and knew they wanted to control the direction of their practice.

But, Borakove warned, having a co-pilot is not for everyone.

“If solo practitioners are thinking, ‘Should I get a partner?’ You know what? No, not if it’s not the right one,” she said. “Having a partner is a balance to your reputation. It’s just like spouses and friends – you find people based on core values. I’ve heard so many stories of bad partners. Bad partnerships are bad employment, and that’s going to permanently reflect on your reputation.”

Practical matters

Whether you take a partner or not, you’ll eventually have to decide where to hang out your shingle.

“A lot of my older colleagues really stressed setting up a brick-and-mortar operation,” said Owens said.

But, in retrospect, Owens said he probably could have saved money and skipped renting a space. Although he regularly works in his office, he explained, he rarely sees clients there.

“Now, I’m considering possibly expanding my firm out to Milwaukee, and I’m probably going to scale back.”

Rather than pay rent for an office, Owens said he’s considered simply leasing out a conference room or using one of the private rooms provided free of charge to lawyers at the state law library.

For Osman and Borakove, though, a top priority was getting a brick-and-mortar office.

“The single most important thing we invested in was a physical office,” Osman said. “We’d learned about virtual law, went to seminars. It just wasn’t going to work for us. We needed a place to meet clients. And they were talking about personal and confidential stuff that, sometimes, they don’t even tell their family members. So we knew we couldn’t meet in coffee shops or even their own homes.”

They also invested in essentials, like computers and software, including Excel and Word – two must-haves, Borakove said.

The next step was to dress the office as efficiently and affordably as they could.

“It doesn’t have to be the full showroom package from an office store,” Osman said. “You don’t need marble countertops to start. You don’t need a $10,000 table to start. But you do need some kind of table and chairs.”

“We worked on where clients would be sitting,” Borakove added. “We had a conference room with chairs from Costco; Costco is amazing. But we went higher end on the table. I went to Marshalls for the art.”

For support staff, the partners enlisted their family for help with accounting and other tasks. Borakove herself spent 80 hours learning to design and code their website. And, at least early on, the partners chose not to hire a receptionist and simply accepted having an empty desk in their reception area.

“We got what we had to to get going and budgeted and knew we needed to live within what we were making and added from there when we could,” Osman said.

Putting down roots

Once you know what you’re going to do and where you’re going to go, starting a practice is pretty much a matter then of getting started.

But how do you do that? How do you set about establishing yourself in the community?

“We got out networking, playing a bit off connections we had made from previous jobs and really honed in on industries that would be likely to refer for estate planning,” Osman said.

Goldstein took a similar approach, attending bar-association meetings, making plans with other professionals for lunch and taking part in the Dane County Bar Association’s mentoring program, which is open to lawyers in the Milwaukee through the Milwaukee County Bar Association and Marquette University.

“Putting yourself out there, it’s scary,” Goldstein said. “But it is very fulfilling to connect with other business owners. It also gave me an opportunity to get some of these questions answered. … You’re not the first one to have encountered problems, and other people might have the answers you need.”