How to Run a Law Firm Like a Startup?

Let’s be honest – lawyers are rarely seen at the forefront of the disruptor scene. By education and training, we are skilled at removing ambiguity and uncertainty for our clients. We have spent thousands of billable hours to forecast every conceivable thing that can go wrong, then protect clients against it. As a result, law firms create an environment that shuts down nearly every entrepreneurial instinct lawyers might have had.

But the disruption of the law firm model will continue and innovation is coming – law firms are being forced to change in order to stay competitive. The legal industry is changing from how people find lawyers, to how firms find talent, to how lawyers provide legal services, and how technology is involved. The most successful lawyers and law firms will be those who can spot an opportunity and provide a meaningful solution. In other words, those who can adapt, innovate and disrupt.

Before we go any further, let’s make sure we are all on the same page. Regardless of how innovative you are, you are not going to counsel the next Google or run the next Facebook if you don’t have the right credentials. There is simply no substitute for competence, credibility and client service. Competent representation requires the legal knowledge, skill, thoroughness, and preparation. Lawyers need to continuously improve, study, and be the experts in their fields. Be satisfied with nothing less than the very best in everything that you do. Provide outstanding client service, learn from the Big Law — yes, they are good at this. At the end of the day, being a lawyer is about delivering results for clients, and there are simply no shortcuts to getting there.

But when law firms are run like startups they focus on building something from nothing, not protecting against losing everything. They look into the needs, desires and possibilities of the market and address them – make them happen. Law firms can truly run like startups philosophically, technologically, and from a legal business perspective by the following:

1. Creating a Defining Mission Statement. While tech companies often start with that, law firms rarely do but a convincing mission statement is the glue that holds the firm together because it gets everybody pointed in the same direction. It also acts as a magnet that attracts the right people— the right team members, clients, and vendors— to the firm and aligns them. Be bold, think big – a good mission statement should be mixed with passion, humanity and an eye on the large picture.

2. Embracing Technology. Everyone wants a piece of that start-up pie, even lawyers. Many of our firm’s clients were startups when we took them on, and are now large companies. Being with them as trusted advisors from day one has made all the difference. But let’s face the reality: a growing, fresh, vibrant technology company will not want to work with an archaic law firm that is billing them for every 6 minutes or with a lawyer who barely knows how to check emails. In order to work like a startup, you need to embrace technology — fearlessly — and utilize its full potential to become more profitable and efficient.

3. Becoming More Than Legal Experts. Lawyers are increasingly using social media (yes, you should join Twitter!), writing blogs, and leveraging technology to build a high-quality practice on a shoestring. As a result, forward-looking lawyers are becoming not only subject matter legal experts, but also marketing, sales, financing, and operational experts in running a successful practice.

4. Not Going Too Far. Running a start-up law firm is not too far from running a tech start-up, but with the added responsibility of regulation and ethical scrutiny. Lawyers have to remember about the additional challenges like ethical regulations on marketing, ownership regulations which affect building the team, and financing issues that are far stricter than for non-legal companies. Always consult with your state’s Rules of Professional Conduct.

5. Providing Alternate Billing Arrangements. Most law firms still bill clients by the hour. It’s been this way for decades but the climate is changing as evidenced by major clients pushing for large discounts. The legal industry needs to adjust to current trends if it wants to survive and thrive and soon the billable hour will be a history, perhaps with the exception of litigation. If you approach it properly, you can earn an even greater profit with alternate fee arrangements, such as fixed-fee billing or hybrid billing options, than with conventional hourly billing. At the same time, you can increase your clients’ satisfaction levels and strengthen your long-term strategic partnerships.

6. Bringing New Energy. The real point of difference in running your firm like a startup can come from the workplace culture and energy. Bring the kind of energy you would see in a high performing software startup company to your relations with clients and employees. It helps if your attorneys and staff in the practice come from an entrepreneurial or technical background. Build the firm around a concept of work/life balance, autonomy, flexibility, innovation but also hard work and commitment.

7. Being Passionate and Optimistic. There is really no way around it – you need to be passionate and optimistic. You know, like those almost pathologically optimistic entrepreneurs in Silicon Valley who believe the impossible can be done on an almost irrational level. Yes, the same approach should apply to lawyers and law firms. Why not?

8. Perks! Oh, and let’s not forget about getting an expensive, automatic espresso machine for the office and some healthy snacks too. If you want to run your law firm like a startup, you should definitely know that benefits and perks mean a lot more than the standard health insurance and vacation time. The sky is the limit and if you need some ideas take a look at Google for instance, which offers a cafeteria which uses homegrown organic products, bikes, volleyball courts, heated swimming pools, on-site oil change and car wash services, dry cleaning, massage therapy, a gym, a hair stylist, fitness classes, bike repair and an indoor slide.

When you run your law like a startup, you will attract certain clients that value innovative forward looking partners. If you’re lucky they will become the next Google in a couple of years. You will be able to hire legal talent that is open to new ideas, is keen on innovating within the legal industry, is sharp, smart and enthusiastic. Working in such environment will create great energy and enthusiasm for bringing your big ideas and plans to life. A win-win for all.