There I was, working at a fancy law firm as an insurance defense lawyer. Yes, I was making a lot of money, but it wasn’t what I had envisioned…
Growing up poor in Arlington, TX, my family couldn’t afford electricity. So I knew getting a full ride scholarship was the only way college would be an option. I wasn’t much of an athlete, but I could sing. So I majored in music and went to college for free. In my heart, though, I knew becoming an opera singer was not a realistic life plan.
In 2005, everything changed for me. When Hurricane Katrina hit New Orleans, I decided to head down there to volunteer. Sure the devastation was enough to take my breath away, but what really stuck with me was how communities came together to protect themselves when major institutions had failed them.
After working with social justice warriors, lawyers, and law students to help clean up the city, I knew I wanted to go to law school. Sadly, though, I lost my bearings for a few years. I graduated and got a good job at the fancy law firm I mentioned, but my work wasn’t fulfilling.
Then, I had my “Jerry Maguire moment.” I quit my job and decided to start my own solo law firm, Insurance Claim HQ. I went from defending insurance companies to helping the “little” guys and gals — policy holders.
Maybe you too are a lawyer who has lost your bearings and wants to do work with more purpose. Or maybe you’re in another industry feeling underpaid and overworked. Or you’re simply ready to strike out on your own. Perhaps it’s time to start your own business.
Here are the most important tips I learned from starting my law practice:
Do the math
Every business owner needs to do the math. It’s really simple math, I promise. But you do need to take a hard look at your finances. Assess how much money you need to feed yourself and your family, pay the rent or mortgage, and keep the lights on.
Spreadsheets are your best friend. Make a list of all real and estimated expenses, both personal and business. Next, think about what you can eliminate. Do you really need the premium version of Spotify? Maybe, but at least think about it…
After you have some solid numbers, take the total you’ll need to run your business, add 30-50% for taxes, and calculate how much business you’ll need to do. For example, if your monthly personal and business expenses total $5,000, plus taxes, you’ll need to generate $6,500-$7,500 a month. Then figure out your billable rate and how many hours you’ll need to invoice each month to meet your revenue goal. Next, you’ll need to figure out where that business will come from.
One mistake I made in the beginning was taking on cases that were not high value. As a young, over-confident lawyer, I saw nearly every case as a million-dollar case. Now, I know better how to advise policy holders and we only take cases that make sense for our firm.
Keep your overhead low
Now that you’re the boss, every dollar counts. When my firm grew from seven employees to 200 in less than a year, I had to take a good look at expenses to make sure we were staying on track.
One of the biggest expenditures is office space. Carefully evaluate your real needs and what you can afford – especially now when those spaces could be at a premium thanks to COVID-19. What type of location will work best for you and your clients? Do you really need that high-end, downtown office or can you make your home office work? Can you hire remote employees or use a hybrid model to keep overhead low?
If you do decide to lease space, pay attention to your office neighbors, since they may be a great referral source for you. And remember, when you run your own business, almost anyone is a potential source of referrals.
Use your network
In addition to looking at your new office neighbors and nearly everyone you meet as a potential referral source, you’ll also want to think about who in your existing network could send you business.
When I had my “Jerry Maguire moment,” I hoped some of my colleagues would be inspired and join me at my new firm. But at the end of the day, they just wanted to keep their heads down and keep collecting their paychecks. Fortunately, it wasn’t too long before I found my partner at Insurance Claim HQ, Alexander Sunnarah. Together, we’ve tapped into our collective network and saw exponential growth.
Also, keep in mind that you can start networking anytime. If you’re planning to launch your business next year or in six months, start telling people now. Then, as you get closer to your official launch date, send an announcement email to everyone you can think of.
Don’t stop believing in yourself
Finally, the best gift you can give yourself as a new business owner is to believe in yourself. I believe in my work because I have seen how quickly policy holders come around when someone they trust explains the process to them. When I guide policy holders through a confusing system to get their insurance carrier to honor their obligations according to the policy, they quickly see that being denied was not personal.
Living through a disaster like Hurricane Katrina is stressful enough. Combining this with waiting on the insurance company to pay, makes for a perfect storm of stress and anxiety. Too often, though, policy holders take out their stress on the wrong people. I often tell clients, “let us be the squeaky wheel, so you don’t become the person you don’t want to be.”
Launching a new business can be daunting, but it’s probably not as tough as you think. With these four tips, you’ll be ahead of the game!