Lawyers just starting out and those thinking about wrapping up their practices have a lot in common. Legal professionals from both camps joined the New Jersey State Bar Association for a free webinar through PracticeHQ on the essentials for starting a firm and the considerations to take when winding one down. The session covered everything from accounting, marketing, file management and more.
Here are some tips from the NJSBA’s PracticeHQ, a free benefit for members that provides information and guidance on practice-related issues:
Starting a firm
-Invest in an accounting software. The state Office of Attorney Ethics (OAE) has strict rules regarding the maintenance of trusts, business accounting and billing. There are also reporting requirements every year though the Interest on Lawyers' Trust Accounts (IOLTA). To avoid accounting woes, balance your various accounts every month.
-Monitor your expenses on a regular basis. That includes expenses outside of client costs, such as subscriptions, bills and insurance payments. Year over year, you should keep a budget on all your fixed costs, including rent, malpractice/health insurance, payroll expenses and bar dues.
-Go as paperless as possible to save time, storage space and money. Even with paper files that are necessary, convert them to electronic copies. Install a document management system to store files in a logical and consistent way. Documents should be easily retrievable through the same process for every client in any matter.
Closing a practice
-Create succession plan. More than 50% of the legal workforce is aged 55 and older, yet only 26% of law firms have any succession plan in place.
-If you plan on retiring, think about your current revenue, retirement savings or post-firm incoming, health, pending cases or ongoing payments from clients. Hire a good collection attorney to track down clients and arrange payment plans for those who are delinquent with bills.
-Keep colleagues and clients informed of your decision. Tell other people in the firm first in case they have to seek other employment. When telling clients, it’s important they hear about your decision directly and not secondhand.