When attorneys leave an established law firm to start their own practice, much of the early planning revolves around the infrastructure they can see.
You need a laptop. Email. A practice management system. A way to bill clients. A website. Maybe an office.
But some of the most important infrastructure inside your former firm probably wasn’t something you thought about very often.
There were systems for checking conflicts, protecting information, managing deadlines, handling money, responding to client concerns and dealing with employee issues. There were also people responsible for deciding what happened when something went wrong.
When you start your own firm, you don’t need to recreate the infrastructure of a large law firm.
You do need to decide how those functions will work inside yours.
Here are seven systems new law firm owners should think about building from the beginning.
1. Client Intake and Conflicts
The client relationship starts before an engagement letter is signed.
How will prospective clients be screened? How will conflicts be checked and documented? Who has authority to accept a new matter?
When you’re practicing inside an established firm, many of these procedures already exist. In your own practice, you have to decide what the process will look like.
It doesn’t necessarily need to be complicated, especially when the firm is small. It does need to be consistent.
That becomes even more important as additional attorneys and employees join the firm.
2. Calendaring and Matter Management
A missed deadline can quickly become more than an administrative problem for a law firm.
Think about how important dates will be entered, monitored and reviewed.
Will one person be responsible for entering deadlines? Will another person verify them? What happens when an attorney is out of the office? How will responsibilities be reassigned when someone leaves the firm?
Technology can make this easier, but purchasing software doesn’t automatically create a process.
Someone still has to decide how the system will be used.
3. Cybersecurity and Access
A modern law firm may operate almost entirely through technology.
Client files may be stored in the cloud. Attorneys work from laptops and phones. Email contains confidential information. Outside vendors may have access to firm systems.
That makes access control one of the operational decisions a new firm needs to consider.
Who has access to client information? Is multifactor authentication being used? How are devices protected? What happens to someone’s access when they leave the firm? Who does the firm contact if an account is compromised?
Cyber insurance can help transfer some of the financial consequences of a cyber incident, but it doesn’t replace the need for basic cybersecurity procedures.
4. Financial Controls and Client Funds
If your firm handles client funds or participates in transactions involving significant amounts of money, establish procedures around how money moves.
Who can initiate a transfer?
Who can approve it?
How are new or changed wiring instructions verified?
Does the firm require independent verification before funds are sent?
These decisions matter because fraudulent emails and social engineering attempts can look remarkably legitimate.
A procedure that requires verification through a separate method can create an important checkpoint before money leaves an account.
5. Client Communication and Documentation
Good legal work isn’t the only part of managing professional liability risk.
Communication and documentation matter too.
How will important client decisions be documented? How often are clients expected to receive updates? What happens when the scope of an engagement changes? How does the firm document advice that a client decides not to follow?
These procedures can help create consistency while also giving the firm a clearer record of what happened if a disagreement develops later.
6. Employee Onboarding and Offboarding
Your first employee creates an entirely new set of responsibilities.
They may receive access to client files, email, technology platforms, financial information and internal systems.
That makes onboarding more than paperwork.
Decide what access employees receive, who approves it and what training they need. Just as importantly, have a process for removing that access when someone leaves.
As the firm grows, these procedures will likely become more formal. Starting with a basic process makes that growth easier to manage.
7. Contracts, Vendors and Insurance
Your new firm will enter agreements with landlords, technology companies, vendors, clients and other businesses.
Those contracts can create obligations for the firm.
Some may require specific insurance limits. Others may contain indemnification provisions or requirements involving data security, confidentiality or services.
Someone should understand what the firm is agreeing to before the contract is signed.
Your insurance program belongs within this system too.
Instead of purchasing policies once and automatically renewing them every year, review your protection as the business changes. New employees, larger clients, different practice areas, new office space and higher-value matters can all change the firm’s exposure.
Use Three Questions to Build Each System
Building systems doesn’t mean creating a 50-page manual before you open your doors.
Start with three questions.
Who owns it?
Someone should be responsible for the function, even if that person is you.
What is the process?
Write down the basic steps so the process can be repeated consistently.
What happens when something goes wrong?
Know who needs to be contacted and what should happen first.
Those three questions can be applied to almost every important function inside a growing law firm.
In the beginning, the answer to “Who owns it?” may frequently be the founder.
That’s normal.
As the firm grows, responsibilities can move to employees, outside vendors and professional advisors. The system can become more sophisticated as the business requires it.
Build for the Firm You’re Becoming
Starting a law firm doesn’t require recreating everything that existed at your former firm.
It requires understanding what those systems were accomplishing.
The large firm may have had an HR department. Your boutique firm may have an outside HR consultant and a documented onboarding process.
The large firm may have had an internal cybersecurity team. Your firm may use an outside IT provider with clear security procedures.
The large firm may have had people responsible for insurance and risk management. Your firm may work with an advisor who helps you understand which risks should be prevented, retained or transferred.
Different infrastructure. Same underlying functions.
The goal is to build enough structure around the business that important responsibilities don’t exist simply because everyone assumed someone else was handling them.
Start with the systems that matter most today. Then continue strengthening them as the firm grows.
You don’t need Big Law’s infrastructure.
You need the right infrastructure for the firm you’re building.
Leaving Big Law to start your own firm? Schedule a conversation with The Bunker to review the risks your insurance program is designed to address.