Don’t let the financial fears keep you from getting off the ground.
When it comes to operating costs, my biggest piece of advice is to balance responsible risks. Having a budget and keeping a small savings cushion in the early days will keep you on track financially. Being overly conservative is not necessary—and will delay you from ever getting off the ground. (No, you don’t need 12 months in savings to start.) Consider whether something is an expense or an investment, and understand that not every investment will work out immediately, or ever.
Don’t let the fear of risk hold you back from chasing your dream of entrepreneurship.
Below, I provide a basic skeleton of the financial costs of starting a law firm, including the obvious, less apparent, and non-essential but beneficial expenses.
Location costs: This includes expenses related to renting or leasing a physical office. Of course, this looks different if you are operating virtually. Costs may include rent, security deposits, and utility setup.
Equipment and supplies: Consider costs for computers, furniture, phones, and other necessary supplies.
Utilities: Plan for utility costs like electricity, water, and internet service.
Malpractice insurance: In most jurisdictions, malpractice insurance is a requirement. This helps safeguard both you and your clients.
Software: This is critical and can be pricier than expected for new firm owners. A trust-compliant bookkeeping system, a client management system, and VOIP are must-haves and this alone can be several hundred dollars per month.
Business registration and taxes: Registering a business, getting a license and certificate of occupation, and in some localities, prepayment of taxes can be significant initial expenses.
Non-essential (but beneficial) Costs
Virtual assistant: If starting as a solopreneur with no staff, a virtual assistant is an affordable way to start building a team and to help keep you organized.
Branding and marketing: Professional branding and marketing and working with a marketing agency are not necessary to open doors, but should be prioritized early on in the firm’s growth to establish an identity and presence where you need it most.
Professional coach: Working with a professional consultant/coach to help with business operations may help you work out the kinks and set you up for success faster.
Fractional CFO: If finances aren’t your thing, hiring a fractional CEO to create a financial plan is an important step in the early stages of business growth.
While there are other costs to consider, the ones listed above will help you establish a foundation in which you can build a more robust financial plan. As you refine your business plan and how you wish to operate, you can consider additional costs and weigh the benefits.
The journey to establishing a woman-owned law firm can be daunting, but it's also incredibly rewarding. I’m here to help you navigate the financial considerations and drill even deeper into what to consider based on your practice area and specific situation. Reach out.