Starting a law firm from scratch

As I went about setting up my own law firm, I reflected on the experience in a Gazette article, ‘Setting up shop: building a new family practice’.

The feedback this generated from other practitioners, those planning to set up, or those simply offering encouragement, astonished me.

A lot has happened to my firm since I opened its doors in February 2008, and much more has happened to the profession during the same period.

Although the firm only deals with private paying work, I continue to gape in horror at the carnage created within the world of legal aid, by politicians and the Legal Services Commission alike.

The result is that the neediest in society are left unrepresented and committed practitioners go to the wall.

My firm is probably a very different operation to the one set up at the outset.

However, I have stuck to what I know: divorce and family law.

Adding staff

My firm’s headcount has grown. At the start there was just me.

Pretty soon I was joined by a former colleague on a locum basis, who then became permanent following her maternity leave.

Our third solicitor started in June 2010. We are now fortunate to have a multi-tasking administrator-cum-trainee paralegal.

I have tried to support flexible working where possible.

One solicitor here, with two small children, works three days a week, one of which is from home supported by remote working arrangements.

This has proved successful because the clients are aware of her routine and the solicitor goes out of her way to be flexible.

I made a decision very early on that I was not going to use agents when recruiting staff.

With a handful of honourable exceptions, recruiters are, from my experience, at best a very expensive luxury for a small niche firm.

Labour-intensive it may be, but the hours spent trying to find the right sort of person for your firm is an investment which pays dividends.

As well as advertising vacancies through relevant legal journals, we also advertised through websites and online publications devoted to family law.

A link to my firm’s own site enabled more details to be found, as well as increasing its hits.

Once we had a shortlist, my senior colleague put together a couple of case studies for the candidates to work through at interview.

Such practical assessment proved invaluable.

I have been alarmed by the number of interviewees who told me that their firms rarely send them on continuing professional development courses and will not even pay their membership for something as important to family law as Resolution, formerly the Solicitors Family Law Association.

It has been equally disconcerting to learn how many junior solicitors are left to carry out research from the internet and find their own precedents there, rather than their principals purchasing relevant journals or textbooks, whether printed or electronic.

Initially, our support staff provision was at a fairly modest level.

Our digital dictation was sent off to South Africa for transcription, and this continues to be reasonably cost-effective with a decent turnaround time.

It has now become apparent that the firm needs significantly more administrative support, so recruitment is beginning.

New premises

It goes without saying that, if the team expands, it needs space to work in. I had signed up to a three-year lease for our original office space of around 400 sq ft and it was getting very cosy in terms of space.

With around 12 months left to run on the lease, I instructed an experienced chartered surveyor to find the firm a new home.

It was a very tough brief.

I wanted the practice to remain in the same village in Berkshire, where we had begun, and I wanted to buy the freehold. Oh, and it had to have bags of character and be affordable.

At first I saw some pretty unsuitable property, but eventually I learned that the freehold of the building next door was on the market.

The downside was that there was an insurance company tenant with four years left on its lease, plus a sub-tenant.

I got wind that the insurer wanted to surrender, and the sub-tenant was already leaving, but this side of negotiations had to happen first before I could proceed.

This meant that any exchange and completion of my purchase began running perilously close to the end of my lease in December 2010.

Initial talks with my landlord to extend the lease were not promising.

I was offered a further 18-month lease, which would have meant the expense of two offices for an extensive period, which was certainly not something I had budgeted for.

As stress levels soared and with days to go before the end of the lease, a rolling monthly arrangement was agreed, much to my relief.

Financing the purchase was crucial.

I was pleasantly surprised to learn that a number of institutions were prepared to offer a business loan secured on the prospective building.

In the end, I went with my existing bankers as they knew me and I knew them.

What had not been immediately apparent was that the premises were elected for VAT.

This hefty amount had to be factored into the borrowing as a short-term overdraft, on similar terms to the loan.

My old firm, Boyes Turner, did a sterling job in sorting out a rather complex title.

Covenants existed against use as a slaughterhouse and as a brewery, so those sidelines were off the agenda in case I fancied a change of career.

Unfortunately, communication difficulties within my bank led to the non-arrival of the completion monies just before Christmas.

The bank urgently increased the overdraft to meet the shortfall, but it was a somewhat heart-stopping moment for all concerned.

Aside from acquiring premises, and meeting the VAT involved, which, happily HMRC was very efficient in paying back, the firm has been run without any overdraft and, come to that, without paying bank charges.

I have been very fortunate.

Cashflow is one of the most important things in running any business.

One of my first steps was to carefully draft my firm’s terms and conditions so that bills were payable on delivery, rather than after a month.

I have regularly revised them since to reflect any changes needed by changing professional requirements.

Owning an office brings with it a fair amount of maintenance, as well as a need to understand everything from fire safety to the Control of Asbestos Regulations 2006.

Carrying out unauthorised works to a listed building is a criminal offence, so owning a grade II building has meant that an acquaintance with the consents process is imperative.

Associations, networks and groups

It is potentially quite a lonely life being a sole practitioner.

Support and encouragement from family, friends and indeed fellow solicitors, some of whom are competitors, has been invaluable.

I discovered that the Solicitors Sole Practitioners Group does some very good work.

It has recently run seminars on professional indemnity provision, which is a huge concern and a major cost.

Soon after I opened, I was invited to join a national network of niche family law practices, D5 – Excellence in Family Law.

Together with the principals of Benussi & Co in Birmingham, Diane Genders in Lincoln and Nottingham, Family Law Associates in London and Jones Myers in Leeds, I have explored the issues facing firms like ours.

In addition, we have run two successful national conferences for our teams, creating affordable, bespoke CPD and building knowledge in areas we feel are crucial.

I have found this association to be of great benefit.

Marketing

In the first few months I barely had time to market as much as I would have liked.

Marketing, of course, is not (simply) advertising. By far the best method of marketing is having your clients recommend you to friends and contacts because you did a good job.

Perhaps it is my Yorkshire background but I have never been keen on spending money on advertising when there are opportunities to get free publicity for the practice.

Many publications want to fill their space and are often happy if you can help them to do so, on a relevant and timely basis.

I was offered a monthly column in a local newspaper and, to my surprise, people tell me that they read it.

Increasingly, with local newspapers’ circulation falling, many editors are, however, looking for sponsorship or selling advertorial.

I am told that an out-of-date website is off-putting, so I have added to my firm’s site on a regular basis, and frequently analysed its statistics.

I have never been hugely fond of social media on a personal level.

However, people kept talking to me about Twitter for business purposes and, finally, my practice succumbed.

With Twitter, I get posts on divorce and family law, with news about leading cases and other important developments well in advance of ordinary email alerts or electronic journals.

I have made some good professional contacts too.

It is difficult to say whether tweets might bring in a potential client.

Certainly Twitter can only add to a firm’s online presence, assuming one uses it properly.

My firm also seeks to use Facebook and LinkedIn.

Meanwhile, the firm’s rubber band logo has provoked a lot of positive comment.

Regulatory requirements

A smaller firm has to work that much harder to keep up to date.

With constant change happening, even before the introduction of alternative business structures and outcomes-focused regulation, it seemed sensible to make sure that I read the Gazette, joined the Law Management Section* and signed up for tweets from the Solicitors Regulation Authority.

It was wise to get a bookkeeper involved early on.

Unless your favourite thing is figures, one should not try to do it oneself because this area needs constant attention to comply with the Solicitors’ Accounts Rules.

Reflections

I have learned a lot since day one.

I realise that the business plan was a must, but it is not written in stone and must evolve constantly.

A new plan is now being written, looking two to three years ahead, albeit with several variables.

The economic climate is uncertain for business, law firms included.

This recession seems to have hit divorce and family lawyers much harder than previous downturns, with unprecedented levels of redundancy and closure.

Teams that once offered public funding are now pursuing a finite pot of private work and, anecdotally at least, many couples, who might otherwise have separated, are staying put because of the vagaries of the housing market.

At best, it is ‘steady as she goes’ for most solicitors’ practices.

I asked a leading family lawyer, involved in the birth of three firms over the years, what he would have done differently.

His answer? ‘Nothing.’

For my part, I might have done some things a little quicker but, of course, hindsight is a wonderful thing.

Tony Roe is founder of Tony Roe Solicitors in Berkshire.