Module 1
Should you start a firm? Motives, readiness, models and the first honest questions
Many lawyers dream of their own firm: no billing targets set by someone else, clients of their own choosing, work done their way. Some build firms that serve them and their clients well for decades. Others find, within two years, that they have become administrators, collectors of unpaid bills and the sole answer to every late-night problem, and that the freedom they imagined has gone. The difference is rarely talent in the law. It is the quality of the decision to start and the preparation that follows. This first module asks the honest questions: why you want to do it, whether you are ready in skills, money, clients and temperament, which model of practice suits your situation, what regulation you must understand before anything else and what you stand to lose if it goes badly.
Hover over an idea to light up what it connects to, click it for its definition, minimum requirements, an example and the usual trap, press Play to watch the map build step by step, or trace a short case through it.
Simplified teaching map, in general terms. Check the law where you work. On a small screen, scroll the map sideways.
By the end of this module you can
- Separate reasons from wishes.
- Run a readiness check.
- Compare the main practice models.
- Know the first regulatory questions.
- State the personal and financial risk plainly.
Part 1. The lecture
Why start a firm?
People start firms for many reasons. Some hold up under pressure, and some do not.
| Motive | Does it hold up? | Why |
|---|---|---|
| I have a clear group of clients who need something that is not well served. | Yes | Demand is the foundation. It can be tested before you start. |
| I want control over how I practise: the clients I take, the fees I charge, the way I treat people. | Yes, if you accept the duties that come with control | Control is real, and so is the responsibility. |
| I am good at the law and I am sure that clients will follow me. | Partly | Clients come for results and relationships, and they follow far less than lawyers expect. |
| I hate my employer, or I was passed over. | No | A reason to leave is not a reason to start. You may be trading a bad employer for a worse customer: the market. |
| I think I will earn more. | Maybe, later | Most new firms earn less than the founder’s old salary for a year or more. |
| I want flexibility for my family or health. | Sometimes | A new firm is rarely flexible. It becomes so only when it is stable. |
Write down your reasons, then test each with the question: would this still be a good reason if the first year was hard? A firm built on a reason that disappears in a bad month will not last.
A readiness check
Readiness has four parts. Weakness in any one can be repaired, but you should know where it is.
| Area | Questions | Warning signs |
|---|---|---|
| Skills | Can I do the legal work competently, alone? Have I handled matters start to finish? Can I price, market, manage money and people? | Never run a file without supervision; no idea how a bill is built. |
| Money | How many months can I live without income? What are my fixed personal costs? Do I have savings or support, and what debts? | Less than six months of personal runway; large personal debts. |
| Clients | Who will instruct me in the first year, and why? Have I spoken to them? Is there a source of referrals? | ‘They will find me’; no named prospects; clients who belong to your employer. |
| Temperament | Do I cope with uncertainty, chase payment, sell and work alone? Do I want to run a business as well as practise law? | Dislike of selling and money; a need for a team and structure. |
- Score yourself honestly, and ask two people who know you well to do so as well.
- Look at what is missing and plan how to fill it: a course, a mentor, a part-time period of working for someone else, a bookkeeper.
- Consider a trial: take a small number of matters alongside your job, if your employer and your regulator allow it, to test the market.
A question worth asking
If you were advising a client in your position, with your savings, your clients and your skills, would you tell them to go ahead now, to wait a year or to do something different?
The main models
| Model | What it is | Strengths | Weaknesses |
|---|---|---|---|
| Solo practice | One lawyer, with support staff or contractors. | Control, low overheads, simple. | Isolation; you are the only cover; limited capacity. |
| Partnership or small firm | Two or more owners sharing costs and work. | Shared load, referrals, cover. | Disputes between partners; shared liability in some structures; slower decisions. |
| Virtual or remote firm | Lawyers work from home or flexible spaces, with cloud systems. | Low premises cost, wide reach. | Needs strong systems, security and culture; regulators have rules about supervision and records. |
| Join or buy an existing practice | Purchase a book of clients, or join as a partner. | A running start, existing clients and systems. | Price and quality of the book; client consent; cultural fit; due diligence. |
| Chambers or association (where it applies) | Practise as a self-employed barrister or associate with shared services. | Independence, shared costs. | Dependent on instructing solicitors or referrals. |
| Legal services business (alternative structure, where permitted) | A business offering legal services with non-lawyer ownership or investment, in places that allow it. | Capital, technology, scale. | Regulation is complex and varies by place. |
Which model is open to you depends on the law where you will practise: some jurisdictions restrict who may own a law firm, how it may be structured and how it may be financed. Choose from the models that are lawful where you are, and then choose by the fit with your clients, money and temperament.
The first regulatory questions
Regulation comes first because some of it can end a plan before it begins. Before any detail, find and read the rules of your own regulator on the following.
- Licence to practise: what you must hold, and whether there are conditions on practising alone (for example, a period of post-qualification experience).
- Who may own and manage a firm: whether non-lawyers may hold a stake or manage, and what structures are allowed.
- Client money: rules on holding, accounting for and reporting money that belongs to clients are strict and breaches are among the most serious in the profession.
- Professional indemnity insurance: whether it is compulsory, the minimum cover and what it excludes.
- Advertising and client-getting: limits on how you may describe yourself and approach clients.
- Money-laundering and identity checks: duties to verify clients and report suspicion.
- Data protection and confidentiality: registration or notification, security duties and how long records must be kept.
- Complaints and compensation arrangements: the scheme you must join and the procedure you must have.
- Supervision and records: if you work remotely or employ others.
Module 3 returns to this in more detail as a checklist. At this stage the point is: do not spend money or tell clients until you know the rules.
The risk, stated plainly
- Income risk. In the early months you may earn little or nothing, while rent, insurance and software bills arrive on time.
- Personal liability. Depending on structure, you may be personally liable for debts and for some kinds of claims. Insurance covers some risks and not others.
- Professional risk. You are accountable for every file, with no one to catch an error: a missed limitation date or a client-money mistake can end a career.
- Opportunity cost. The salary, pension and benefits you leave behind, and the experience you would have gained.
- Wellbeing. Long hours, isolation and the weight of sole responsibility are real, and the Steady Under Load course addresses them.
A failure plan
Before you start, decide what failure would look like and when you would stop: ‘If by month twelve I am not covering costs and a modest take-home, I will wind down or take a job.’ A plan for failure does not make it likely. It makes a bad year survivable.
Part 2. Lab: Reason or Wish?
Sort each motive for starting a firm into one that is likely to hold up or one that is likely to disappoint.
Situation 1 of 6
I have spoken to twenty small businesses in my town that lack an affordable commercial lawyer, and five have said they would instruct me.
Where does this belong?
Part 3. Lab: Which Model?
Choose the model that best fits each person’s situation.
Situation 1 of 3
A lawyer with five years’ experience has savings for nine months, enjoys working alone, has a few referral relationships and low personal costs.
Which model fits best?
Part 4. Check your understanding
Ten questions drawn from a larger pool. Sign in to have your score saved towards your certificate.
You have finished the free module
Here is what you can do now, and where the course goes next
Module 1 gave you
- Separate reasons from wishes.
- Run a readiness check.
- Compare the main practice models.
- Know the first regulatory questions.
- State the personal and financial risk plainly.
Next, 6 more modules and a capstone
- Module 2: Your market and positioning: who you serve, what you offer and why they would choose youYou will learn to explain why focus beats breadth.
- Module 3: Structure, regulation and risk: the foundations you cannot skipYou will learn to compare legal structures and their consequences.
- Module 4: The numbers and the plan: costs, income, break-even, cash flow and fundingYou will learn to list start-up and running costs.
- Module 5: Setting up: premises, technology, and the systems that run the firmYou will learn to compare premises options.
- Module 6: Winning your first clients: referrals, visibility, the first conversation and the proposal
- Module 7: The first year and beyond: rhythm, the common failures, the first hire and wellbeing
- Capstone: Capstone: a plan for a new firm, with numbers, rules and a first ninety days
Each module has its own practice labs and a graded quiz, and a Certificate of Completion follows when you pass them all. The whole course is $15 once, or included in an All-Access Membership.
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General education on starting a law practice, using invented people and figures. It is not legal, tax, financial or regulatory advice. Rules on practising, ownership, insurance, client money, advertising and anti-money-laundering differ between countries and change: check your regulator’s current rules and take professional advice.
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