Lawyers looking to open their own firm face stiff competition. Without significant seed money, the process feels a lot like bringing a knife to a gunfight.
It’s intimidating, to say the least, but don’t give up on your dream just yet! Launching your firm is an attainable goal—even when resources are limited.
One crucial factor in kickstarting your new law firm? Understanding what your options are even when you feel like you don’t have a lot of options.
How much does starting a law firm cost?
How much does it really cost to build a small or solo law firm? Well, that depends. Just how strong are your bootstraps?
In recent months, inflation has made its glaring 9.9%mark on law firms’ overhead expenses, but starting your firm with a small budget is possible—with the right mindset, tech, and game plan. In fact, you can open your own modern, streamlined law firm with just $3,000-5,000.
We’ve outlined the essentials you’ll need to get started and what you can expect to pay for them.
The new law firm essentials
As remote work has become the norm in other industries, acceptance for attorneys to work from home has increased. Still, whether you conduct legal research from your spare bedroom or answer emails at your kitchen table, you’re going to need a few basics:
- Smart phone
If you’re reviewing documents on the go, a tablet could also come in handy for easy reading. Fortunately, you likely have most, if not all, of these items handy. Later down the line, it’s wise to upgrade to work-only devices, but starting with your personal hardware can be acceptable—provided that you take extra care to keep client data secure (i.e., save all client data and files to a cloud-based legal practice management system rather than on your local drive).
Expected Cost: $0-$500
Microsoft 365 or Google Workspace
You’re going to need a way to conduct video calls, draft documents, schedule appointments, and email clients. As two of the world’s most widely adopted software suites, Microsoft 365 and Google Workplace are dependable ways to work that provide robust software options. Not only do their packages include advanced cyber threat protection, but they also widely integrate with popular legal technology solutions.
Expected Cost: $22 user/month
Legal research tools
The phrase “Knowledge is power” has never held truer than in the courtroom. To best serve your new legal clients, you—and anyone else working for your new firm—need access to key reference materials.
Temple University offers extensive low or no-cost legal research tools to use when Lexis, Westlaw, and Bloomberg are out of budget.
Expected Cost: $0-$100 per month
Cloud-based legal tools to take care of business
As a new firm owner, you’re going to wear a lot of hats: billing manager, accountant, human resource officer, and administrative assistant, to name a few. You’ll need at least one legal software solution to streamline the processes that are essential to keeping your firm afloat:
- Document management
- Expense tracking
- Time tracking
- Trust accounting
- Project management
TimeSolv includes features that support all of these roles and more, plus it integrates with Microsoft 365. Capture billable time while you send an email, turn client meetings on your calendar into time entries, or organize email attachments in client-matter folders in Outlook with ease.
Expected Cost: $39.95 per month
If you’re considering launching your own law firm, we will assume that you’ve already passed the bar and obtained your license. If not, expect an additional cost for testing and licensure.
Still, the paperwork doesn’t end there.
Registering your firm as a limited liability company
It’s possible to launch a law firm as a sole proprietorship, but consider registering your new firm as a limited liability company (LLC). Not only do LLCs offer significant tax benefits compared to sole proprietorships, but the LLC business structure also protects against business-related debts and liabilities.
Expected Cost: $30-350, depending on your state
Choosing a trade name
In some states, Limited Liability Company names must include the words “limited company” or “limited liability company,” or the abbreviation “LC,” “L.C.,” “LLC” or “L.L.C.” which doesn’t exactly roll off the tongue when a satisfied client wants to make a referral.
In this case, your LLC name doesn’t need to match the name that clients call your law firm. If you choose to market your law firm under a shorter name—or a different one altogether—register your trade name to prevent other businesses from using it.
Expected Cost: $10-100, depending on your state
Mistakes happen, but unless you’re comfortable footing the bill for the financial hardship your clients experience due to an error, professional liability insurance is a must-have.
Remember, even the most accomplished attorney is at risk for a malpractice suit. When it comes to liability insurance, it quite literally pays to be prepared! As luck would have it, liability insurance is relatively affordable. Many policies start at under $75 a month.
Expected Cost: Varies by Provider
Over one-third of potential clients begin their search for a lawyer online. Whether you build your own with templates on WordPress or hire someone to do it for you, a well-designed website boosts your credibility,
As for promoting that website once it’s up and running? A willingness to DIY will save you lots of D-O-U-G-H.
Law-firm-friendly client relationship management (CRM) software that incorporates marketing automation features will empower you to manage your contacts, send automated emails, texts, and voice calls, and run reports about your efforts—all from one easy-to-navigate interface.
If you’re entirely unsure where to begin when it comes to marketing, sign up for a free crash course from Hubspot Academy.
These free tools will also come in handy as you spread the word about your law firm:
- Canva – social media graphics, email graphics, and business card design
- Google Trends – insights for search engine optimization and content marketing
- Hemingway App – legalese to plain English translation
Expected Cost: $200-$500
Don’t invite your legal clients to your home when virtual meetings aren’t an option. Instead, consider paying for shared office space from a company like Peerspace or WeWork. Your city might have some locally owned and operated options, too.
Costs widely vary for shared office spaces by geographical location, so evaluate how often you’ll need the space to determine whether it’s more economical to rent the space by the hour, day, or month.
Expected Cost: $40-$1000
Networking and Professional Development
Whether you’re working as a solo practitioner or as part of a small team, networking and ongoing professional development are critical to keeping pace with your competitors. If possible, retain a portion of your budget for continuing education courses, networking events, and conferences.
Expected Cost: $250+
You can recoup certain expenses by including them on client invoices, but your firm will need to pay for them upfront.
When you’re just getting started, set aside a chunk of change to keep these costs from coming out of your own pocket:
- Court fees
- Deposition expenses
- Mediation fees
- Medical record expenses
- Lab fees
- Witness fees
Expected Cost: $1,000+
Keeping Costs Under Control
Keep law firm start-up costs under control by taking advantage of legal technology that works as hard as you do!
Choose tools that:
1. Reduce the amount of time spent on tedious administrative work
Calendaring, task management, and trust accounting can all be made easier with processes and platforms designed specifically for the legal industry.
2. Streamline your workflows
Smaller teams—especially teams of one—accomplish more with automation. Fewer hours spent managing your practice add up to more time spent serving your clients.
3. Boost your bottom line
Get paid faster by choosing tools with built-in electronic payment collection and trust accounting.
Take the First Step With Timesolv
Don’t let your budget stop you from starting your own law firm.
With a willingness to do it yourself, a great internet connection, and a strategic approach to spending, you can build a streamlined, modern law firm for $5,000 or less.
And with TimeSolv on your side? You can do it half the time!
Get started today at the shoestring budget-friendly price of FREE. Start your 30-day trial now.