I just heard from a lawyer who works for a firm and is thinking of going out on his own. He wants to know how much he should have in savings before making the leap.
Well, you need some cash–but a lot less than you might think.
You don’t have to invest in inventory. You don’t need to hire anyone until you have clients. You can get into an office with a couple months rent.  And if you plan to advertise, you don’t have to buy TV time or billboards, you can start with a small budget and scale up.
In other words, you don’t need a big pile of money to open your own practice. What you need is some cash on hand to pay your bills until the practice is producing enough income on its own.
But how much?
Six months? A year? Two years?
I don’t know. I don’t have a formula. But I can tell you this: it’s better to have “too little†than “too muchâ€.
A big pile of money in the bank takes the pressure off of you. You can take your time. Be selective. Relax and do things “rightâ€.
And that’s the problem. If you don’t have to hustle, you probably won’t.
When I opened my first office, I had almost no money in the bank. I sold my childhood coin collection to buy some (cheap) furniture and pay the first month’s rent on a small office. I bought an IBM Selectric typewriter with nothing down and payments of $43.43 per month. I bought some stationery, cards, pleading paper, legal pads, file folders, and pens. I had enough left over to cover a couple of months rent and basic expenses.
I was open for business, but I didn’t have any. No clients.
I took out a cheap classified ad in the local bar journal, seeking overflow work and appearances. And I hustled my rear end off to bring in some clients of my own. At first, I took anything, including work I hated and was barely qualified to handle. Most of my clients paid me next to nothing because that’s all they could afford and I took it because I needed whatever they could pay.
Every month was a struggle to cover my bills. It took five years before I figured things out, but I made it.
I made it because if I didn’t bring in business, I didn’t eat.
Looking back, I don’t know what would have happened if I had had lots of money at the start. Yeah, I do. I probably would have gone through it, thinking I had lots of time, and only then would I have had enough pressure to make things happen.
Your situation is different. You have more experience as a lawyer than I did. You know more about marketing than I did. And you have the Internet, which allows you to ramp things up more quickly. But you also have more competition than I did.
The bottom line on making the decision to open your own practice has little to do with how much money you have at the start, and everything to do with your drive and determination.
How bad do you want it?
If you’ve got lots of energy and you’re willing to work harder than you’ve every worked before, if you’re prepared to do whatever it takes to make it, you’ll make it.
Or you won’t. There are no guarantees. No paycheck, no benefits. Nothing. You have to build it all.
It’s called risk, but risk is the path to reward.
Make sure you have a marketing plan before you open your own practice
