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12 tips for the first year: diary of a start-up law firm

19 October 2016

In his second instalment of his diary of a start-up family law firm, Robin Charrot shares the lessons learned from Evolve’s first year.


My last blog in March 2016 reflected on our journey from concept to authorisation. Now, Evolve Family Law is one year old and going strong, so I thought it would be interesting to look back on our first year and see what worked and what we might have done differently. Hopefully, the lessons we’ve learned over the past 12 months will help those who are starting out on their own, or thinking of doing so.

1. Be prepared to work hard

My co-director and I have definitely put in more hours during the last year than at any previous time in our careers and, at times, it has been a struggle to balance our home and work lives. However, we realised that it was essential in order for the business to survive and to become successful.

2. Your income will not be steady

Although family work can be billed on a more regular and interim basis than most other areas of law, the firm’s income from month to month still varies wildly. We have to keep a set amount aside for our regular outgoings (rent, wages, subscriptions), which means that in lean months we have had to restrict our remuneration to the nil rate tax bracket. However, I’m pleased to say that the good months are now happening on a more regular basis!

3. Use technology

We actually have a real advantage over our bigger, more established competitors because we were able to buy the latest tech at really modest cost. All we had to purchase was a few laptops (no servers), there is no maintenance cost, we just pay £75 per month for each user, and we have full remote access for everyone at the firm.

Similarly with our phone system - it is all VOIP integrated into our laptops and synced with our mobiles, it had very low set-up costs and there are virtually no call costs. Again, it is way ahead of any previous systems we used.

4. Be prepared to grow

We started out in a single room in the back of an estate agency and thought we might stay there for a year or two. However, our client base grew so quickly that we had to move to bigger premises after four months, and we are now having to move again.

Might it have been good to start with bigger premises? No, I don’t think so: we couldn’t have known that things would take off so quickly, and we could have overstretched ourselves financially if we had gone straight into bigger premises.

We have taken on three senior consultant solicitors to do work in complementary areas that we were initially referring out to other law firms (wills and probate, contentious probate and private client litigation). They are self-employed rather than employed, which suits us (we do not have a fixed high wage bill) and them (they can work when and where they want, and they keep a large percentage of what we bill for their work). Having additional fee earners not only boosts our fee income, but also smooths out the income stream.

We have also taken on four non-fee earners to give us the support we need (office manager / book keeper, paralegal, admin assistant and a self-employed typist. Although this does create a significant wage bill, if the lawyers were to do all this work themselves, we would lose countless hours of chargeable time.

5. Be prepared to take on risk

By taking on extra employees and extra space, we are increasing our fixed costs, so there is always the worry that the work will dry up and we won’t be able to meet those costs. However, it would have been impossible for my co-director and me to sustain the business long-term with just the two of us, and we would have had to turn work away.

6. Think like an accountant

There are a lot of ways to make our business financially efficient. Here are two examples.

The government allows limited companies to buy brand new low-emissions cars and write off the entire purchase price of the car against profit, so I am able to drive an electric VW Golf and at the same time we have knocked £6,000 off our tax bill. The finance payments are also tax deductible.

My co-director and I have pooled our pensions into a SSAS and it is buying our next premises. Evolve Family Law will then become the tenant and pay rent to our pension scheme.

7. Things will go wrong

Not everything has gone well. Our outsourced book keeper / accountant let us down badly, and our VOIP phone system has had some teething problems, but we have overcome these set-backs. I think it is inevitable that things will go wrong. The main lesson to learn is to confront the problem and deal with it quickly, which leads us to lesson number 8...

8. If something isn’t working, change it

One of the beauties of a small start-up firm is having the flexibility to change direction. So, when it became clear that our first case management system wasn’t up to the job, it took us ten minutes to decide to ditch it, a day for me to find a better one, and a week for us to start with the new one.

9. Keep your clients happy

This is always important, of course, but I think even more so with a start-up because:

  • we started with fewer clients, so we would really be hit hard by any of them leaving us
  • we are in the very early stages of building our reputation both locally and nationally, so negative feedback would really hit us hard
  • a very large proportion of our new work is on personal recommendation, with a large proportion of that being from our former and existing clients.

Keeping our clients happy means being extra responsive (they have our mobile numbers and we are contactable 24/7), extra flexible (we will often speak to clients late evening, or go to see them at their home), or going the extra mile (for example helping clients’ children with career advice or work experience).

10. Keep your employees happy and engaged

My co-director and I have had plenty of experience of traditional law firm set ups where they adopt the ‘divide and conquer’ approach, treat fee earners and support staff differently, and restrict management information to the partners, so we decided to adopt the opposite strategy.

We are completely open with all our staff on how the business is doing, and we regard our support staff as just as vital to the success of our business as the fee earners, so we involve them in decisions on how the business is run on a day-to-day basis. We intend to build on this ethos in the near future by converting Evolve Family Law to employee ownership.

11. Cashflow, cashflow, cashflow

I should have put this at number 1 because it really is the key to the survival of any start-up, and ours has been no different. So, we agree fixed fees wherever we possibly can (and then take part payments up front), but if we can’t fix fees, we bill monthly and chase (politely!) as soon as clients go over their 14-day grace period.

All of the fee earners and support staff take ownership of this issue because we all know we need to do it to survive, and most clients are really good about it too because they also know their payments will help us to survive. We make it as easy as possible for clients to pay (online, or over the phone by credit or debit card), and in our first few months we offered 10 per cent discounts for early payment.

We have had only one problem debtor during our first year, and we are still in business, so I think we can give ourselves a pat on the back for this.

12. Enjoy it!

The last year has been a massive challenge for us, and it has definitely been stressful. However, it has also been fantastically rewarding to create and grow something of our own. With growth we are also starting to enjoy the flexibility that comes with owning our own business - and with summer childcare duties for my three young children that has been a godsend.

Finally, because we have recruited carefully, and because we keep everyone engaged, it really is one big happy family, and I really look forward to coming to work. We also have a big first birthday bash planned!

Full article first published on the Family Section website

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Tags: business | strategy | law management

About the author

Robin Charrot is a director of Evolve Family Law and a member of the Family Section Advisory Group.
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