Launch Angle: How Do You Fund a New Law Firm?

When you’re starting a new law firm, the big question is how you afford it; and, you don’t want to guess. 

 

At the very least, you want to understand what your runaway is: If I don’t make any money doing this, how long until I run out of money to support myself? 

 

That answer’s different for everybody; and, it helps if you have a life partner, who can keep the wheels moving, while you’re a start-up. 

 

The related question is: How long does it take the new business to become self-supporting?  In other words, when you do make enough money from it to pay for (1) a salary/your personal expenses; and then, (2) ongoing business expenses. 

 

Once you get there, you can breath a sigh of relief, and start focusing on profit. 

 

But, if you don’t have a spouse, or a significant amount of savings to tap into, or even a book of business to port over from another law firm – you’ve got to grind to make it work, because, in a law firm environment, you can’t take on non-lawyer investors to support your growth (like other companies can), because you couldn’t ever share the profits with them. 

 

And, if you truly don’t have the funds to start up – maybe spend some time saving them up.  Or, failing that, you could potentially find a business loan, apply for a home equity line of credit, tap into your retirement, or use credit cards.  Of course, those options carry significant risk, if your business does not pan out.  So, you really have to believe in yourself and/or be okay with taking the L. 

 

Starting a business is not for the faint of heart – especially if you’ve never done it before. 

 

And, if you’re ready to start thinking about getting started – you’d better do the math first. 

 

. . . 

 

If you want to talk further about starting your own business, just reach out.

Through a unique partnership between the bar association and Jared Correia's Red Cave Law Firm Consulting, Vermont Bar Association members have access to experienced law practice management consultants at a special discounted rate.

To get started, visit Red Cave's Vermont Bar Association landing page, and start running your law practice like a business.