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:
- The California Guide to Opening and Managing a Law Office and
- The California Guide to Growing and Managing a Law Office (I contributed a couple of chapters to this one).
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.
