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Opening a Solo or Small Firm Practice in California

Background: In 2008, I opened Flashpoint Law after spending 8 1/2 years a big firms.   Before taking the leap, I met with several solo lawyers who guided me through the process.  Since then, in my role with the State Bar Solo & Small Firm Section, I’ve counseled hundreds of lawyers on how to open their own firm in California.  Below is a quick summary of the key points.  For a more thorough review, check out the California State Bar’s:

Assumptions:

  • You’re licensed to practice law in California.
  • You’ve already made the decision to start your own solo practice/small firm.

Running a solo practice is a roller-coaster ride.  Every time you get a new client is an amazing high.  Every client that fires you/doesn’t pay their bills/files a claim against you is a personal affront.  You might have an idea what you’ll make this month, but forecasting 3 months out is just guesswork.

Don’t take this step if you need consistent income/salary.  Solos have cash-crunches where you’ll have to dip into personal savings/take out a line of credit to float the practice until the next check comes in.

Decision Points:

At the start, you’ll need to decide which approach you’re going to take: Quick & Dirty or Full Service.  The former is cheaper and faster.  The latter carries a much better first impression.  In the end, you’re still the one doing the work, but the packaging determines how comfortable the potential client is in hiring you and the price you can charge.

Checklist:

Pick a business name
Register a domain name
Website host
Buy a laptop
Figure out where you’re going to sit
Telephone service
Internet service provider for your office
Email provider
Accounting software
Productivity Software
Choose a celphone
Malpractice Insurance
Health insurance
Dental insurance
Vision insurance
AD&D insurance
Bank account
IOLTA account
Business license
Credit Cards
Incorporate
File S Corp Election
Obtain FEIN
Obtain EDD number
Prepare corporate records (bylaws, organizational docs, share certificates)
Prepare letterhead and logo
Print business cards
Update state bar IOLTA status to show that you now have an IOLTA account.
File SDI exemption form (DE 459) with EDD.
Set up free conference call dial-in number.
Payroll service
Overnight delivery
AP/AR/payroll vendor
Hire admin
Health Savings Account
Line of credit
Hire intern
Prepare employee handbook
Prepare offer/non-disclosure letters for admin/intern/employees.
Overflow legal staffing (junior associates, paralegals)
Worker’s comp (mandatory if you have any employees other than yourself)
General liability (slip and fall, employee in accident on the way to the post office to mail something for you)
Disaster recovery software
Online fax service
Printer
Hire accountant

Shirish Gupta is an award-winning mediator and arbitrator with JAMS. He is a past-Chair of the California State Bar Solo and Small Firm Section Executive Committee and had his own solo practice from 2008 through 2015.
Book a mediation with Shirish.