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How to start up your own law firm

sun_cloudsAre you dreaming of becoming the next Zia? India is the world's only major legal market where you can still do more than just dream.

Legally India has asked more than a dozen legal entrepreneurs for their advice on how to live that dream.

"If you feel if you are not able to achieve what you want in larger firms with larger brand names, there is enough work to sustain and flourish when you set up on your own," claims Lex Counsel's co-founder Dimpy Mohanty.

Why would you?
"The usual reasons," muses Lexygen founder Vijay Sambamurthi, "the entrepreneurial bug more than anything else."

ABM Law Associates founder Abhishek Mathur blames aspiration: "It's something I've always wanted to do."

IP Gurus founder Pooja Dodd says she was looking for professional independence when she set up a new IP boutique earlier this year.

Indus G&D Law co-founder Gaurav Dani move to found Induslaw was "prompted simply because we couldn’t see ourselves working in those family driven firms".

That angle can be significant from a financial perspective too. Tight, family or 'lala firm' equity and organisational structures often make the idea of creating your own equity attractive.

"If successful, there is more money in this model than anywhere else," claims Indus' Dani. He explains that financially, he is now in a much better position than he would have been had he stayed at some of the large firms where he would probably be a partner or on track to partnership.

"One good feeling you have when working on your own is you think that the sky's the limit and you can do a lot of things," recalls Legal Spectrums' founder Asim Abbas.

Bright strategies
"Money is important but there's also such a thing as dream and a passion," explains Dani about Induslaw's initial idea. "There is a huge market in the mid-market area and there's no law firm offering that service and we felt that a law firm could tap into the market."

"What I thought was that there is no telecom law firm in the market," says Legal Spectrums Asim Abbas, who started up a niche telecoms practice.

Lexygen went for the niche private equity field.

But near full-service start-ups also exist and bright ideas do not just have to be restricted to an area of law.

"I had – and continue to have - certain strong ideas, how to build an organisation and what kind of organisation to work for myself," Lexygen's Sambamurthi told Legally India. "I figured the most effective and convincing way of doing it is to put my own equity into it."

Narasappa, Doraswamy & Raja was set up in 2006 on the premise of the three founding partners all having significant overseas experience and being "able to offer clients international drafting style at Indian price", explains the firm's co-founder Siddharth Raja.

Small hurdles
The barriers of entry in India – at least for local lawyers - are very low, whereas liability insurance and huge property costs can make it all but impossible to break into London or New York's legal scene.

"A maximum of about Rs 2 lakhs is sufficient to have a proper office at home," says Legal Spectrum's Abbas.

He explains that there are two different models for establishing a law firm. "The first is that you go for heavy investment in terms of infrastructure and lawyers' costs, which requires a lot of capital. Once you have everything in place, you get a revenue stream and clients."

"I followed a different model," he continues. "Start low with low infrastructure development and get clients and a revenue stream fast and follow on from there."

Abbas began in January 2008 and today still operates from his residence together with three other lawyers who also operate from their homes, although a real office is soon on the cards.

A disadvantage, he says, is that he has lost clients demanding a "proper" team and office, despite his long-time industry and client contacts. "But rightly so," he admits, "because an office and team give a comfort level to the client."

While the rate of growth with such a model can be lower, so is the risk.

"Because overhead costs are less you can survive on very minimal billing and in bad times, people look for cheaper options," argues KNM & Partners co-founder Vipender Mann. "There is an opportunity for small firms to survive."

Why wouldn't you?
Running a law firm is very different from working in one. Say what you will about law being a profession, at the end of the day you will be in charge of a business.

IP Gurus now has a team around five but Dodd says that nevertheless, as an individual you end up wearing a lot of different hats, doing admin, HR and everything else that is usually taken care of behind the scenes. And that is on top of getting clients and generating fees.

"It has been a lot more difficult than anticipated, but I'm surviving," she jokes.

Leaving the fold of a larger law firm will also see you waving goodbye to big-ticket transactions and brand equity for the foreseeable future.

"Goodwill is a big problem," agrees KNM's Mann. "Initially you have a big problem convincing people who you are." Often clients will also like the assurance of an established firm, which can be more comfortably blamed if transactions should go wrong.

Lex Counsel's Mohanty complains: "Particularly with government projects, they don't consider your previous experience in previous law firms - they want your experience to be in the firm where you're pitching for work."

Clients will instinctively also be looking to squeeze new firms on price, particularly if pitching against the established players. "People expect you to be rather low down with the billing, which is not what you want to project," she says.

An unknown brand also puts you into a difficult human resource Catch 22, without a flood of unsolicited CVs landing on your desk every day as is the case at the big firms.

ABM's Mathur says that for a start-up it is very important to have a "quality team" but most start-up firms do not have the deep pockets to hire the best or most experienced people in the market.

Managing cash flow is another initial challenge. "It is a shock to adjust," remembers Abbas. "I started Legal Spectrum in January and got my first payment in May – for four months there was no payment. If someone does not have the buffer for four or five months, you will have sleepless nights."

Branding can also make recovery harder, as larger firms often have the leverage to gently force clients to pay-up, despite clients themselves also suffering under a cash crunch.

"You need the money but clients do tend to take much longer than what you were either promised or expected," recounts ABM's Mathur. "And you have to be very careful with a client, because you can't be seen to be harsh or impatient to get the money."

How do you?
"It was hard initially," remembers Indus' Dani. "But we started getting small work, some advice, some opinion work and started to do that work to keep it ticking. And somehow you end up in a transaction and you end up with more than you can handle."

But before you rush to hand in your notice, good planning is vital.

"My advice is to make sure to know exactly what you're getting into – look at things you would never imagine," advises IP Gurus' Dodd. She says that initially she was doing almost no legal work and mostly dealt with recruiting, establishing systems, writing firm and lawyer profiles, trying to build a website (and seeking permission from the Bar Council of India) and more.

A good business plan should also include a good idea of where your money will come from.

"Ultimately for a law firm, when you leave, the biggest support comes from your existing client base," says Phoenix Legal co-founder Abhishek Saxena, adding that it is not easy for a start-up to get support from new clients.

Before leaving, most entrepreneurial lawyers therefore test the waters. "[Start-ups] generally discuss with their clients, 'if I start on my own, will you support me?', or they have some kind of understanding with in-house counsel or CEOs," sayd KNM's Mann.

While some small mandates might be thrown the start-up's way, many bigger clients' hands are often tied when it comes to institutionalised adviser relationships.

Family connections can help but will not replace hard work.

If you are leaving with a crowd, you should also be very clear on how costs, revenues and responsibilities are shared. "You need to make sure that you are along same wavelength," says Phoenix's Saxena.

"In the current day and age you'll have to spend more time with your partners than with your better half - you need to have a clear business plan charted out," he quips.

Golden years
All lawyers interviewed for this article report they are doing well and are happy with their career choice.

But this is perhaps not a surprise. 2003 to 2008 were the "golden years", remembers S&R Associates co-founder Sandip Bhagat, who set up in 2005. Most Indian firms grew very rapidly in that period but since then the market has gotten a lot more crowded and the economy has slowed.

So is it now too late to become the next ALMT, AZB, JSA, Luthra & Luthra or Trilegal?

"There is far more intense competition," agrees ABM's Mathur. "There is scope for another 100 similar placed law firms like me, there's enough work for everyone, but I don't know how fast you can become a law firm with a critical size, revenue and all-India presence now."

Nevertheless, opportunities exist to enter the big league, particularly if start-ups start merging and establishing a national presence, as many plan to do.

"It is not at all too late to start, there is enough depth in the market," claims Indus's Dani.

Phoenix's Saxena adds that "if you are confident in your abilities I don't think there is a real risk".

However, it will be a long road. All legal entrepreneurs agree that perseverance, hard work and consistency are the key qualities required.

After all, for the first few years your baby will only ever be as good as its last piece of advice.

But it will also be your very own baby.

If you are a start-up law firm or are thinking about starting one up, we want to hear from you ().

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Like +7 Object -5 Guest 10 Sep 09, 11:25  controversial
this writeup proved to be an interesting read.
I was wondering if it is possible for you to post a writeup on startup and midsize firms looking to recruit freshers...for all those non nlu students not havin a placement cell to bank on.

Thanks a ton.
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Like +5 Object -4 KoolKat 10 Sep 09, 12:57
"too late to become the ALMT, AZB, JSA, Luthra & Luthra or Trilegal"??

you mean AMSS, AZB, JSA, Luthra...yes?

[Amarchand was started almost 100 years ago, unlike the other firms which are much younger.]
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Like +5 Object -6 Guest 10 Sep 09, 15:20  controversial
It is irresponsible to publish this article. Lawyers with two or three years of experience want to start up law firms. Encouraging them in their plan which is sure to fail is not responsible. The vast majority of lawyers would be much better off staying where they currently are and get a good salary and good work and leave the management to someone with more experience.

The Indian legal market and firms needs to get stronger and bigger, not more fragmented. We already have too many mediocre lawyers, we need more good and well-trained ones!
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Like +6 Object -3 Guest 10 Sep 09, 16:06
#3, no one's gonna throw all they've saved into starting a law firm based on an article on this website :-)
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Like +5 Object -2 Anon 10 Sep 09, 17:28
Is ABM's Abhishek Mathur from the NLS Batch of 2003? He was at Luthra Delhi a while back?
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Like +0 Object -0 Anonymous 10 Sep 09, 22:34
There is huge monopoly of employers and their so called helping hands in most of the law firms. And for employee point of it’s a good starts although it’s little late. I do hope they (newly born firms) would be able to make their faith with clients. However Firms needs to get more systematic and supportive towards their peoples.
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Like +0 Object -0 Chris 12 Sep 09, 12:27
To start out on your own, apart from the obvious business acumen and go-getting attitude and dollops of ambition and determination, the most necessary pre-requisite is: access to potential clients.

One possible route is when you walk away with the existing clients of your current firm - naughty, but eminently feasible!

But the mantra is clients, clients, clients - all other factors are secondary.

Of course, you have to keep your clients satisfied once you have got them. And I still belong to the old-school of thought: the clients are always right.

But there are scores of Indian lawyers, albeit not being too competent in law, are excellent middlemen - and work on providing possible leads leading to instructions - all for a good commission of course.

One trend I have noticed is many of the firms started these days, many of then alumni from national law schools, have to have LEX in their name.

Nothing wrong - in fact LEX rhymes with SEX - but it seems a bit contrived.

Sticking to actual names of principals look more regal - but please avoid the "& Co" tag. "Associates" also looks a bit fake.
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Like +0 Object -0 Guest 17 Sep 09, 21:18
Chris, am gonna ignore the rest of your post and limit myself to commenting only on your first (and relevant-to-the-topic) point.

I think you are looking at things quite the other way. Even if one left a law firm with some clients and started up, they wouldn't be able to retain those clients for too long if they did not give constant attention to a host of really important factors - excellent people, sensible and reliable processes and a deeply entrenched work ethic being the three strongest factors.

Therefore, the mantra for a start-up law firm (in my humble opinion) is NOT clients, clients, clients. If you get the three key factors that I mentioned above right, the clients will follow....and more importantly, will STAY!
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Like +0 Object -0 Annonymus 30 Oct 09, 16:48
I think starting a law firm by your own is more beneficial after you have put in a couple of years in the profession for a variety of reasons, viz. (a) you have experience to answer most of the queries raised by clients under various laws under the same transaction; (b) decision taking ability; and (c) most importantly the ability to deliver within the time constraints.

A recent example is a new law firm on the block started by three lawyers called Mediabiz. Check the website viz.
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Like +0 Object -0 Guest 16 Nov 09, 17:03
young lawyers must be encouraged
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Like +1 Object -0 Prash 19 Dec 09, 03:07
I would say that you need 4 main things (in addition to a well thought out business plan of course) to set up and carry on with your own firm:

1. Money in the bank to tide you through the lean periods and when you don't have too many clients'. Payments are generally delayed and if you don't have enough savings to last you for the first couple of years, then it's an uphill task. Survival itself becomes a question unless you have family backing or enough savings. On a lighter note, having a few credit cards with good credit limits is also useful. :-))))

2. Clients' of course. Preferably 3-4 regular ones when you start the firm. A lot of the work will come through personal contacts. The rest is through professional networking. Unless you already have a well established reputation in the market, you're the one who has to generate business and it won't come on it's own.

3. Sound knowledge of your subject and specialization. Quality of work is essential as people have mentioned above.

4. An ability to build up long term relationships not only with clients' but with fellow professionals. The informal tie-ups and referral arrangements that you have with your fellow lawyers and other professionals is essential. Without these tie-ups, you won't be able to deliver all kinds of services to your clients'.

When you're running your own firm, you're responsible for everything and I mean everything from business development to photocopying/ couriers. This is especially true for those who set up a law firm after only a few years of experience. You need to balance your time between completing the work and doing business generation/ office administration and it isn't easy.

You also need to forget about your ego. As someone above said the client is always right.

One thing to be careful about is never to take on more work than you/ your team can handle properly. Failed deadlines, shoddy work and stupid mistakes would kill your reputation and once you lose a client, you're going to lose the others whom that one client could have brought in.

The initial struggle is there for sure but at the end of it the rewards are worth the struggle. My advice to the youngsters with 2-3 years of work experience is to work for at least 5-7 years in a good law firm and then only set up on your own.
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Like +0 Object -0 Anonymous 30 Jan 10, 12:18
Highly encouraging and motivating article for lawyers like me who are keen to start their own work at earliest free from clutches of big law firms and associate-ships. Its sad to see some posting harsh comments just for discoragement purposes. Thanks whosoever wrote this article
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Like +0 Object -0 Anonymous guest 11 Jun 10, 23:02
A law firm is an important form of law practices these days, therefore most lawyers want to start a law firm or a corporate law firm , it may be a small law firm but it will be their own. But starting your own law firm involves a lot of research, you need to plan and find information before you start a law firm. Information regarding how to start a law firm can be found on the internet, the most dependable source of information in present times, it can be used to find a law firm online by potential clients who need services of the lawyers law firm. Even tips to start a law firm and make it a best law firm can be downloaded from the net. You can make your small law firm a top law firm with the resources available to you. Best of luck with starting your own law firm . Just make sure you invest in proper planning and guidance beforehand.[...]
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Like +0 Object -0 Anonymous guest 19 Dec 10, 07:54
Please see this link for more information on how to start your own law firm.
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Like +0 Object -0 Adv.Deesha 21 Jan 11, 19:41
needs much more details for opening a law firm so that will be helpful to more people to make best of it.


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Like +0 Object -0 Scooter 21 Oct 13, 19:07
this is not a dummy's guide to opening law firm!
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Like +0 Object -0 AMIT 18 Sep 12, 21:54
The article is very useful and viable, apart from that i would like to know about the organisation, which helps to the start-up law firm in regard to financial stress and their role in establishing the same?
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Like +0 Object -0 lalit kumar singh 03 Nov 13, 13:05
hi, i am looking my career as lawyer in delhi , i did my llm from nlu luck. and i was law teacher along with trying for govt. job but now i am thinking to build a career not just for me but in future as my family profession.
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Like +0 Object -0 anonymous 03 Sep 14, 17:29
Good for you
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Like +0 Object -1 Guest 17 Mar 14, 18:25
The article is good and motivating
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Like +0 Object -0 cf 23 Oct 15, 10:28
ch***** article... not even an hint of formal procedure to begin with, any conflict for enrolled advocates etc.....
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Like +0 Object -0 kianganz 23 Oct 15, 10:35
If you're a lawyer and don't even know how to research the basic regulations, then maybe it's too early to start out on your own?

In any case, we'll look into doing something along these lines some time maybe - this article was mostly about business strategy...
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Like +0 Object -0 rajeev ranjan pandey 08 Jun 16, 19:04
nice article
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Like +0 Object -0 Col VP Karad Retd 13 Oct 17, 09:28
Dear Sir, good morning to you. I am Colonel VP Karad (Retd), settled in Pune and 62 years old. I am MLL&LW qualified from Pune University and now this year taken admission for LLB (3 years Course) again from University of Pune. I am in the process of launching a consultancy named Techsavy Legal Consultants, Pune. Infact I have already made my own website which is available on google, facebook and linked in and is named as I have the following quarries need to be answered:

a. Am I eligible to start legal consultancy?
b. I am in the process of registering with Shops & Estt Act and GST certification.
c. Any other additional certification required?
d. We are a team of three senior citizens - one expert in HR, Labour Law and personality development, another is a practicing lawyer and third one is a financial expert. Our aim is to provide expertise in above mentioned fields for those who seek our help.
e. Initially we will be working from our respective homes and may be after 6 months we will set up own office is response is good.

Please guide us. We are senior citizens who wish to help society grow a better one day by day.

Col VP Karad (Retd)
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