You still need money to launch a firm, but you don’t have to spend a fortune on it.
A recent Recorder roundtable in San Francisco brought together a group of entrepreneurial attorneys to discuss their beginnings and share tips on how to build a small firm.
Some take the no-frills approach. When Daralyn Durie and a number of her colleagues left Keker & Van Nest last February to open Durie Tangri, the group opted for not-so-glamorous temporary space.
That space cost less than $10,000 a month to house 19 people (including lawyers and staff), Durie said. The space was “not aesthetically pleasing,” Durie said, but it did the job for the first 10 months. Insurance — including E&O, general liability and health benefits— was the second biggest expense, she said. Last year, Durie Tangri spent $50,000 on health insurance. This year, it will be $90,000. The firm pays full premiums, Durie said.
Todd Smithline, another panelist, said the temporary space he put his startup in six years ago had views of brick walls. Smithline Jha has four attorneys, including two partners, two associates, and no staff. Though the virtual office model has its fanbase, Smithline said having office space where clients can visit and actually see “that we have real people” is critical to the firm’s wellbeing.
Contrast their approach with panelist James Wagstaffe, who set up Kerr & Wagstaffe, a trial litigation and appellate boutique, 10 years ago. “We wanted to look like we’re already successful,” Wagstaffe said. “We wanted our clients to say: ‘These guys are doing great!’” That meant Bay views and associate salaries that matched what MoFo's at the time, Wagstaffe said. Though he didn’t reveal their start-up costs (except to say “a lot”), Wagstaffe did say a safety net is a good way to start. Kerr & Wagstaffe opened with six to 12 months of work already lined up.
Dewey Watson of Tierney, Watson & Healy, said it costs a lot less to run a law firm than it did 20 years ago, if you’re willing to go smaller. He used to have a bigger office, but now meets clients in a conference room. “My monthly expenses are a quarter of [what they were] in 1976.”