If it were 1910, you could open a law practice for two in a small, one-room office and sit knee-to-knee at a two-sided desk. All you would need is a file cabinet and a supply of legal pads and pens. Now, you need at least sophisticated telephones, a computer and access to legal resources for research.
The cost of the technology required to run a law practice is beginning to drive up the level of capital needed. Few new lawyers have enough cash to keep them going for six months or a year, and many are tied up with student loan payments to boot. They need cash to serve their clients, money for filing fees, copying fees and other costs before cases can even be mounted.
In addition, insurance is a neccessity that adds to the cost of doing business. New lawyers practicing law “bare” without the protection of insurance to cover a lawsuit brought by an unhappy client are at significant risk of falling into a bottomless hole.
Saving money on office costs
Owning an independent law practice is the dream of many new lawyers. Co-working space may be one answer to making that dream affordable. These facilities offer private offices, co-working spaces, shared meeting space and reception areas, and often including amenities for a fraction of what individual rental would cost.
Where can you get capital?
- Some can depend on friends or family, perhaps offering a stake in the startup firm. However, you may have to take special caution because of possible conflict of interest, if you are ever in a position to represent those to whom you owe money. Be sure to consult a tax advisor and draft a repayment agreement before you accept a loan from a family member.
- Some can use lines of credit from credit cards. However, banks are not offering credit cards to newly established lawyers like they used to before the recession. There are several online sites that allow you to explore credit card terms and apply online. These sites include Bankrate.com, CreditCards.com and CreditCardGuide.com.
- The Federal Small Business Administration can offer loan guarantees and inducements that could smooth the path for a new lawyer to obtain a bank loan.
Please contact us for details on growing your independent law practice in Denver. We offer flexible leases on suites and offices, as well as co-working space.