[00:00:00] Welcome to the Founding Partner Podcast. Join your host, Jonathan Hawkins, as we explore the fascinating stories of successful law firm founders. We’ll uncover their beginnings, triumph over challenges, and practice growth. Whether you aspire to launch your own firm, have an entrepreneurial spirit, or are just curious about the legal business, you’re in the right place.

Let’s dive in.

Jonathan Hawkins: So what do you do if you’ve suddenly been kicked out of your firm? So occasionally I get calls from people who are either kicked out of their partnership or suddenly they come in one afternoon and they’ve been asked to leave, and they have nowhere to go, and they are panicked as anybody would be in that situation.

And so it is not that hard nowadays to start a firm but there are a lot of things you have to do, but you don’t have to do everything all at the same [00:01:00] time. So today I’m gonna talk about if you do find yourself in a place where suddenly, for whatever reason, you’ve gotta start a law firm, this is my recommended approach.

This isn’t everything. There are other things you may consider, but this is what I think as I recommend it to people, sort of the order of how you would do these things. So, first and foremost, you’ve gotta register an entity. Nowadays, there is no reason to operate as a sole proprietorship or without a limited liability entity in front of you.

So the first thing I always recommend, go form your entity. Most Secretary of States or whatever governmental departments in your state where you register businesses, you can pay an expedite fee and get the thing within a day. You can do it fast. So that’s the first thing I would do. Then you get a federal Tax ID number.

Again, very fast. The next thing I [00:02:00] would do is go get a URL for your law firm. You’re gonna need a website eventually. Go lock that down as soon as you can. If you are deciding to use a trade name you might have to revisit this. Usually, that kind of process takes time. You don’t wanna just pick whatever name comes to you.

Maybe you have a name you’ve been thinking about, but otherwise, just create a firm in your name and at least get that URL. You then need to set up your email. You have your URL, then you can go get your email set up. I do not like folks that use Yahoo or Gmail. You need a a company name URL.

So that’s why you need to get that. Whether it’s Office or Google, whatever you use, it is really easy to get this thing set up. It does not take long. You need a phone number. Go get that. Some people like to give their personal cell out. That’s not something I’ve ever done except on rare occasions.

So go set that up. You know, [00:03:00] RingCentral, some other voice over internet provider. There are so many, and those are pretty easy to set up as well. The next thing you’re gonna need is you’re gonna need bank accounts. You’re gonna need an operating account and a trust account. So you’re gonna have to go to the bank.

But most banks require to open accounts, it requires some sort of operating agreement or shareholder agreement that they know you, the individual, has the authority to act on behalf of your entity. So you’ll need to draft a simple operating or shareholder agreement that just says, “Hey, you’re the sole owner of this firm.”

Take that to the bank, get your operating trust account set up. The next thing you need to do is get some malpractice insurance. That in my view, is key. I know there are some people out there, there are some states like mine where malpractice insurance is not required, and there are some attorneys who purposefully don’t get it.

That’s not me. Maybe it is you, but I say go get it quickly. The things we’ve just talked about, these things [00:04:00] can be done pretty much within one or two days. Maybe within a day, depending on a couple factors really. Of those things, the big thing it would take the longest would be getting the registration with your state.

That potentially could take 24, 48 hours. But like I said, you can pay an expedite fee in most places and get it done quickly. So you’ve got that set up. The next thing I recommend is go get a CPA lined up. You don’t have to really go too deep with them yet, but get them lined up. The next thing, so sometimes people have teams that they’re taking with them.

So, you’re gonna need to set up payroll, so you can pay these people. So go get a payroll company set up. There are a bunch of those out there. I suggest using a big national well-established payroll company, not one of these small, local, potentially fly by night [00:05:00] operations. You wanna make sure that they are legitimate and that they are gonna actually pay your payroll taxes when they come due.

I’ve seen over the years situations where someone uses some small independent payroll company that they don’t withhold payroll taxes and pay them to the government, and by the time you learn about that, you are in a big hole, and it’s could be a huge issue. So do that. Again, depending on how many employees you take, you may need workers’ comp insurance.

The other piece is usually if you are covered, there’s a COBRA coverage for health insurance, but obviously, you gotta get that thing in process as well. That’s gonna take some time, but you should at least get it started. So that’s sort of the first step of everything you should do immediately out the gate.

These things you can pretty much do within a couple of days. So what do you do next? This is where we start to get a little deeper. For any clients that you worked with or you want to tell [00:06:00] them where you are and maybe have them join you at your new firm, you gotta send out your client notices. Most state bars have guidelines on this.

Some require consultation or at least a negotiation with the firm you’re leaving to agree on what the notice is gonna say and how it’s sent out. So that’s something you’ll need to work with and potentially over a few days get that done as well. But get the client notices out. Then you start getting responses back.

They say, “Hey, we wanna go with you.” So you need to sign them up with engagement letters at your new firm. This is especially important if you do contingency work because contingency agreements are required to be in writing. So you need to get them signed up under your new firm name. Again, you’ve got your malpractice insurance in place.

They want you to have signed engagement letters. Get that done. So you’ve set up the firm, you got your clients there, and the next step is you’ve got to start [00:07:00] notifying various governmental courts, bars, et cetera. So, if you do litigation, you need to update all the e-filing and court systems with your new information.

Then the extent you have your clients came with you, you need to file substitutions or notices of appearance in all these cases. So you’re gonna get notices of anything that’s filed and things aren’t falling through the cracks. So that’s the second piece of what I recommend.

Real quick, if you haven’t gotten a copy yet, please check out my book, the Law Firm Lifecycle. It’s written for law firm owners and those who plan to be owners. In the book, I discuss various issues that come up as a law firm progresses through the stages of its growth from just before starting a firm to when it comes to an end.

The law firm lifecycle is available on Amazon. Now, back to the show.

Jonathan Hawkins: The last steps here that I’m gonna go through, really, again, this is like a triage type plan.

You are kicked out and you just [00:08:00] gotta get this thing set up. And like I said, there’s so many things you can do and so many things you need to do, but you don’t need to do them all at the same time. For example, setting up a website. You don’t have to do that first thing. There’s other things I think you need to do before you set up the website.

But you’ve got sort of the basics done, the baseline’s there. Let’s move to the other things. Again, set up your website so people can find you. You need to, I think, get a logo, get a design. These things may take a little time. Create your letterhead. Notify state bars and other organizations of your new contact information.

Practice management software, whatever it is that’s something you’re gonna need. Probably that might be a little earlier particularly when client files and whatnot are getting transferred to you from the old firm. You’re gonna need a place to sort of put all that information in.

So you need to get that set up. Usually with those they come [00:09:00] with credit card processing if you take credit cards. If not, you may have to set up an independent processor there ’cause you wanna get paid. So you wanna make sure that you can take credit cards. Then legal research. I say go set up your Google Business page.

Update all your social media accounts all that stuff. Basically, you know, you set up the baseline, then you set up the ways people can find you. And that you can roll out over time. You don’t have to do that all at once. Obviously creating a website can take time. I guess if you are technologically inclined, you can probably or maybe use AI nowadays.

You can just very quickly roll up a website. But and then the last piece I’ll say I don’t think you’re gonna need office space immediately. But that is something that you may want to start exploring. There’s so many options nowadays. You got the work share spots. Everything’s virtual. You can probably work from your [00:10:00] kitchen table if you needed to.

You probably have friends that have an office you can go sit in if you need to. I recommend not rushing into signing a lease. Although, I have known people that have a team that have to find. They need a spot for the whole team all at once, so it’s really more than one office that they need. But still, even then, that’s gonna take probably a number of weeks minimum to line up office space if you are actually signing a lease and not subleasing or using office share.

But that would be sort of the last thing. And that is all you need to worry about in the first two to three weeks, in my opinion, of setting up your firm. Again, we’re talking about a triage. You find yourself suddenly needing to do this. These are the steps I would take and in the order that I would take them.

Ideally, you have lots of time to plan. You have [00:11:00] lots of runway. You can do these things over a longer period of time and have them ready, so when you do step out, you can turn the light on and everything’s there. But that’s not always the case. And what I’ve talked about today is not everything you need to do.

It is just the beginning. And as you get into this, and for those that have been doing it for some period of time, you know this list just continually grows and never ends. So again, once you start the firm, you’re off to the races, and then you can build on top of it. So, hopefully you don’t find yourself in this position, but if you do, this is my recommendation on getting this thing set up as quickly as possible. 

OutroUpdatedWebsite-1: Thanks for listening to this episode of the founding partner podcast. Be sure to subscribe on Apple podcasts, Spotify, or wherever you get your podcasts to stay up to date on the latest episodes. You can [00:12:00] also connect with Jonathan on LinkedIn and check out the show notes. With links to resources mentioned throughout our discussion by visiting www.lawfirmgc.com. We’ll see you next time for more origin stories and insights from successful law firm founders.