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Independence Day: Starting Your Own Law Firm

May 16, 2007
Arlene Reid

Table of Contents

Introduction
Law Society Practice Advisor
Sharing Office Space
Staff
1. Legal Secretary
2. Contracts
Equipment
Furniture
Stationery
Announcements
Library
1. General
2. Specific
Filing System
Insurance
Legal and Other
Supplies
Professional Development
Summary

1. Introduction

At the time of writing, I have had my own law firm for 56 days, 13 hours and 22 minutes.

The decision to go out on my own was a big one. I wasn't in the typical situation of the young lawyer faced with a layoff notice. Rather, I was in a small firm in Drayton Valley where I had worked for two summers during law school, articled and became an associate. I had a great relationship with the lawyer that I worked with and had a future there. My decision to leave was based on opportunity and a desire to be my own boss.

The impetus came when our firm amalgamated with another local firm. The result would have three lawyers in one firm and in a small town, that's a recipe for conflict. For a bit of background, Drayton Valley is a community of 6,000 people located 150 km west of Edmonton. We have 5 law firms servicing the area, including three local firms and two which come in from Edmonton two to three days per week.

Once I had made my decision to go out on my own, I gave the firm 30 days notice. This wind-up phase was very difficult, as I was trying to interim bill files and get outstanding matters up-to-date, as well as think about starting my own business. There was the added stress of leaving the firm I had been associated with for five years and leaving my friends there. My emotions were conflicting between the excitement of my new venture and yet depression at leaving what I knew and liked and was comfortable with.

I had decided that I could not have much down time between leaving my existing job and starting my own firm. I had some involved files and knew that some of my clients would come with me. I couldn't leave these clients for any length of time as there were active family and litigation matters that required ongoing involvement. My last day at work was September 13 and I had planned to open my doors on October 1—a mere 16 days later.

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2. Law Society Practice Advisor

One of the first steps in planning my business was to consult with the Law Society practice advisor, Paul McLaughlin. I found this meeting invaluable. It allowed me to discuss my plans and verbalize goals that I hadn't really thought of. The material I received from Paul served as my bible. I read it cover to cover, highlighted it, summarized it and used it as a format for my ongoing lists.

I made a master list of general areas I needed to address:

Office Space
Staff
Equipment
1. Computers
2. Software
3. Telephones
4. Other
Furniture
1. Reception
2. Secretary
3. Personal office
Stationery
Announcements
Library
Filing System
Insurance
Legal and Other
Supplies
Professional Development

In addition to the master list, I made sub-lists of each area in a separate file. I had a file for computers, telephone information, furniture sales, government surplus auctions, and so on. I also had an ongoing "To-Do" list, with the headings of "Go", "Phone" and "Do". So, when I was ready to sit down and make some calls, all the names and phone numbers were there. If I was in Edmonton, I had my list of places to go. I scratched off items and re-wrote my list regularly. I have kept them all and they serve as quite a road map for the steps during the start-up phase.

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3. Sharing Office Space

Office space can be a very large part of your overhead when just starting up. I approached a local accounting firm to enquire about sharing space; they agreed. With both businesses together, we were able to obtain a space that was larger and ultimately more cost effective.

Location

A law firm should be conveniently located close to the courthouse and downtown. I wanted my firm to look professional and permanent; I couldn't be seen as a fly-by-night organization or as not committed to my space or my business. I was very fortunate to obtain office space in a brand new building downtown which required absolutely no leasehold improvements except blinds and valences.
Lease

The term of the lease is a big decision. I sublet the office space from the lessor for 18 months at a very reasonable rate and also negotiated with the landowner for a further 18 months term at a higher rate. Although a 3-year commitment was a little scary and overwhelming, I was at least guaranteed a quality space and knew what my operational costs would be well into the future.
Signage

Effective signage is critical to identify the office. I had an awning installed which ran the entire length of the building front. The cost was higher than I thought but it looks great. The awning took over 4 weeks between ordering and installation. Had I known the time frames, I would have ordered it sooner to have it in place by opening day.
Security

Upon taking possession, the locks were re-keyed and deadbolts were installed. All filing cabinets, desk drawers and office door needed operational locks on them.

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4. Staff

Legal Secretary

I was looking for a full time secretary who was competent in all or most areas of a general practice, particularly conveyancing. Perhaps I was over-confident, but I anticipated starting my office with the transfer of existing clients. If I was as busy as I hoped to be (and I really am!), I couldn't take the time to hire staff who needed to be trained.
1. Advertising
  
  Advertising must be done well in advance to allow for the newspaper deadline, a date for resumes and an interview day with enough notice for the successful candidate to leave their existing job if necessary. Be clear about requirements. I specified competence with WP51 and legal experience I was inundated with resumes, however most applicants had no legal training or experience.
2. Interviews
  
  Have someone assist with interviews. It is easier to have someone to share impressions with and discuss pros and cons of each candidate. A second interviewer can also take notes and allow you time to formulate the questions and deal with responses. Prepare a list of questions, dealing with legal training, education, experience, and the typical "how do you see your skills fitting with our needs?"
  
  It is important to assess skills by giving a typing test or an assignment on the computer. While the simple questions of "what does Shift F7 do?" would suffice in the short run, I think it is preferable to see a document prepared and check the codes used.
3. Hiring
  
  I hired two persons, each on a part-time basis, each with complementary skills. I had hoped that one position expand into full time, so that I would have 1.5 positions. Unfortunately, I found that with two persons, every procedural idea I had had to be shared with each. I soon forgot who I told what to and when things weren't done as I wanted, I didn't know if it was my fault for not having told each of them. I now have one full time person and it is much easier. The secretary knows all of the files and there is consistency throughout. I am concerned about having a back-up person during holidays and sick times and have established a relationship with someone on a casual basis to fill in if needed.
Contracts
1. Courier
  
  Being out-of-town, I rely extensively on a courier service. Initially, I called a courier when required. Now, I share the cost of daily courier service with another sole practitioner, using my office as the pick-up and drop off point. This cuts my courier costs by one half.
2. Registration Service
  
  I contacted a running/registration service in Edmonton before I opened the office and established an account with them for filing.
3. Janitorial
  
  We decided to hire a weekly cleaning service for the office. There were cost savings in not having to provide equipment and supplies. We also thought our energies were better put elsewhere.

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5. Equipment

Computers

Do your research. I read consumer magazines, ripped out newspaper articles and interviewed a lot of retailers on computers.

Purchase from someone you trust. I purchased locally; the service support was important to me.

While I didn't need a computer with lots of bells and whistles, I wanted something that would last without having to be upgraded within a year. I purchased two IBMs with 100 pentium processor, Windows 95, CD-ROM, and speakers.

One decision that I grappled with was whether to buy one desktop computer and one laptop, as I like to do work at home and thought a laptop may give me more flexibility. I decided against the laptop as the cost was higher, capabilities lower and it was not totally required.
Software
1. Word processing
  
  I was tempted to go with Microsoft Office Suite as I knew many businesses who were very pleased with it, however most legal computer forms are on WP51, such as LESA forms on disc. I decided to buy Corel WordPerfect Suite for Word processing (WordPerfect 7.0). All of my WP51 files are easily converted to 7.0 and the 7.0 files can be converted back to 5.1.
  
  Be aware that legally you need one licenced package of each program for every computer in your office.
2. Accounting
  
  I decided to go with PC Law Junior for an accounting package as opposed to manual bookkeeping or Esilaw.
  
  Consult with an accountant when you set up your books and have them review your program and its output. Despite PC Law being quite user friendly, I had to understand the accounting process too.
3. Legal
  
  I wanted to start out on programs that I would continue to use and not have to change in the near future. For that reason, I went the extra mile and purchased a package of legal software programs from Cakeware. This included the Realti program, a database for real estate conveyancing. I also obtained Will Power for preparing wills and Correct for managing corporate files. Fortunately, my secretary Brenda trains legal secretaries on these programs, so is aptly familiar with them. There was a special start-up price for a smaller firm, which comparatively was reasonable. I had dealt with the Realti program before and knew its capabilities. Each of the programs requires adaptations to fit your own needs, and this could take some time, but the basics are there.
  
  I also obtained all of the LESA material on disc and find that invaluable. The Family Law forms are relied on heavily. The Queen's Printer also has forms on disc, including the Civil Enforcement forms.
4. Time Recording
  
  I purchased Amicus Attorney for time recording and file management. It is fun to use, abd helps me keep my time recording up-to-date. It is linked directly with PC Law, so when I enter time on one, it is updated to the other.
5. Other
  
  I have an e-mail address and signed up with an Internet service. I have not had much time to surf the net yet.
  
  I explored land titles online service. At this point, it is too expensive for the office so I have not proceeded.
  
  I considered QL but haven't yet signed up. I am in Edmonton often enough to do research at the law library and I also order cases through Law Search. I may register later, but at this point it is not a priority.
Telephones

A big decision was whether to rent or buy a phone system. There were also decisions of whether to have voice mail.

I ended up buying the phone system that was in the building and owned by the landlord. It is basic but functional.

Obtain a telephone number that is memorable. Be assertive about inquiring into available numbers.

Check out long distance savings programs to minimize your phone bill.

Select some type of answering service. While an answering machine is cheaper, it does not pick up when the lines are busy. I chose a message centre with Telus for service during off hours or when all lines are in use.

A cell phone can be handy if you are out of the office.

Be sure to contact the Yellow Pages. The deadline in Drayton Valley was October 15, 1996 and I just about missed the deadline as everything else was so frantic at that time.
Other Equipment

Dictaphone - my research showed that mini-cassette dictation equipment is more expensive than micro-cassette equipment. I have used both and bought the micro-cassette. I haven't noticed any lower quality.

Photocopier - the business I share space with had a good quality photocopier, so I was able to work out an arrangement to share their lease payments.

Fax machine - I purchased a new plain paper fax machine. Unfortunately, I found a used one for sale locally shortly thereafter.

Postage meter - though not absolutely required, it certainly is convenient.

Shredder - this purchase came after 6 weeks. I had to do something with the growing mound of confidential papers.

Typewriter - my secretary had an extra typewriter so I have hers on loan.

Laser printer - I had a laser printer from law school daze which was suitable for my personal use. I was fortunate to be able to share a quality HP Laserjet with the accountants. Our office was pre-wired for networking so we were able to hook up the connections relatively easily.

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6. Furniture

Look for deals. New furniture is very expensive but great deals are out there. Check the Bargain Finder, provincial government surplus auctions and federal government sales.

The provincial government auction sales even have law books, including the abridgment and statues, which even if not completely functional can be impressive as decor.

Liquidation places have great prices on desks, chairs and filing cabinets. We established a relationship with one liquidation business and bought 7 lateral filing cabinets and 4 four-drawer filing cabinets at a very reasonable rate.

Reception
- Sofa and chair - we wanted a relaxed and comfortable seating area
- Two straight backed chairs
- Table and side tables
- Pictures
- Coat rack
- Reception desk and chair
Secretary
- Secretary desk with run-off
- Chair
- Filing cabinets, lateral and four-drawer
Personal office
- Desk
- Chair
- Bookshelves
- Filing cabinet
Boardroom
- Board room table
- Chairs
- Telephone table
- Silk plants
Kitchen/Coffee area
- Coffee pot
- Kettle for hot water
- Fridge
- Microwave

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7. Stationery

Don't cut costs on business cards and letterhead; they can create an important first impression of professionalism. I went with a local design company and although there was some concern about having the business cards on opening day, they were there and I was very pleased with the results.

Consider printed folders and will jackets.

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8. Announcements

Plan for a series of advertisements in the newspaper, both in advance of the office opening and after. The newspaper deadline kept sneaking up on me; it requires ongoing planning in advance.

I also placed an advertisement in the Edmonton Journal. Although it was expensive, I got great exposure and reached a wider population. Many people, both local and from Edmonton, commented that they had seen it. I also got some interesting letters from businesses offering their services, and even some gift certificates.

Prepare announcements in the professional newsletters, such as the CBA/LSA newsletter and other professional subscriptions.

Prepare announcements for local businesses, including banks, real estate companies, and other referral sources.

Hold an open house for other professionals and those you do business with. I held an open house after one month in operation. There was a terrific response from local businesses, including the mayor, town counselors, chamber of commerce directors, media personnel and guests. I had a draw for a bottle of wine and in the process, obtained piles of business cards for future reference.

Consider purchasing promotional items as gifts for other business and those you may get referrals from. I am still trying to decide what would be most effective.

Have a ready supply of thank you cards for the flowers and special acknowledgements you receive.

Establish a relationship with the local media. I was able to do an article on real estate in the first month and I received good exposure from that.

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9. Library

General

Obtain basic resources; for a general practice, that includes Rules of Court, Criminal Code, Land Titles Procedural Manual. Your rules of Court address for updates may need to be changed.

The Statutes of Alberta can be obtained in paper format or on disc or CD-ROM. If you want the volumes, check the CBA/LSA Newsletter for second hand sales. For computer use, the Queen's Printer provides disc or CD-ROM versions. The movement is to CD-ROM and soon that will be the only version for searching on.

Obtain forms from every possible source. I attended at the Land Titles Office and asked for two of everything. I also got forms from Corporate Registries, Vital Statistics and the Provincial Court.

I went to LESA with a shopping list and loaded up on resource materials.
Specific

I wanted to ensure that I had resource material in all of the main areas of law. I made a list of each area and then identified what I needed in each, including LESA material, computer programs, manuals and guides, checklists, government forms and precedents.

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10. Filing System

Select a system for filing. After discussing numerous options, I decided to keep the year as the first two digits and then a series reflecting different areas of law, such as 1000 - corporate; 2000 - family, 3000 - real estate, and so on. For example, a family file would be 96.2001. This has been most effective in noting at a glance how many family files have been opened. I may add colour codes for easier file tracking.

Although Amicus and PC Law keep track of the files and can sort and print, I do keep a hard copy and files are assigned through the written system.

The LESA Family Law Forms has good precedents for opening and closing files and for maintaining filing systems.

Obtain a fire-proof safe for wills and other critical documents.

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11. Insurance

Call LSA and ensure your insurance is up-to-date.

Obtain tenant and liability insurance.

Obtain disability insurance.

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12. Legal and Other

Decide whether to incorporate or operate as a proprietorship. I decided to be a proprietorship. Until I earn more and can leave profits in the business, there is no real benefit to incorporate.

Obtain a GST number. This can be done over the telephone with a 1-800 number for Revenue Canada.

Obtain bank financing. I met with a number of local bankers to explore financing and interest rates. It was important to me not to encumber my personal assets, nor to risk assets belonging to my significant other. Although he agreed to obtain a new mortgage to obtain some funds, I was able to obtain decent interest rates without a personal guarantee or encumbering my assets. I was in a different situation than many starting out on their own. I had worked prior to going to law school and accordingly had savings, owned a house and had no student loans.

Set up trust accounts at the necessary banks. The precedent letter in the LSA material is useful.

File Form U with the LSA prepared by your accountant.

Set up a Land Titles Account. I overlooked this and it was quite a scramble to get in place. I wrote a lot of personal checks until the paper work was in order.

An account with the Court of Queen's Bench for fax filing is also very handy. Thankfully it is very quick to establish and I was able to use it to file a Petition for Divorce immediately.

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13. Supplies

There are a number of office supplies to purchase:

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14. Professional Development

Sign up for CBA sub-section.

Obtain a Chamber of Commerce membership.

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15. Summary

As I reflect, I can't believe all that was accomplished in those two weeks. The month of October, my first month of operations, was wild. I was busy with the transfer of existing files I had been working on and I had a lot of walk-in traffic; people are interested to try a new service. I have been very pleased with the referrals from other professionals—there has been a lot of support from the business community.

The first month was also very painful in learning new programs, including WordPerfect 7.0, Windows 95 (the 10-minute tour took 60 minutes), Amicus Attorney, PC Law Jr., LESA programs, and more. I also had to develop administrative procedures, such as:

file opening
filing
mail and deliveries
diarization system
staff training
accounting procedures
accounts receivable procedures
setting fees
recording and collecting disbursements
retainer agreement

As I reflect, though, I do not regret my move. Even if I do not make millions nor even a reasonable salary, I have complete control over my circumstances. If I choose to work 120 hours a week or 10 hours, it is my decision—and my benefit. There is something to be said for... Independence Day!

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Arlene Reid, Reid Law Office