- Instructor: Attorney Bob Schaller
- Lectures: 2
Capital and Banking Requirements.
Lawyers need at least $10,000 in seed money to capitalize a new law firm. More is better. A lot more is best. It matters less where the money comes from: savings, bank loan, credit cards, parents, friends, etc.
A lawyer should expect to generate future legal fees and collect those fees on a regular basis once a firm is started. The revenue would be used to pay the recurring bills and to satisfy any loan taken to establish the firm. Once these loans are paid, the attorneys should make every effort to create a law firm nest egg or rainy-day fund. Profits stored in such a fund can be used when clients are slow to pay account receivables.
Lawyers should do a projected spreadsheet analysis of the initial start-up cash needs. Lawyers should consider, among other things, the cost of office space, marketing, computer hardware, computer software, printing, supplies, and more.
Too much capital is never a problem. Too little capital could cause trouble. If cash is tight, then consider partnering with a law school classmate or other trusted lawyer to start a law firm. After all, sharing half the profits of a thriving partnership could be better than keeping all the profits from an underfunded solo law firm. Sometimes two heads are better than one.
Every lawyer starting a law firm should establish a solid banking relationship with a banking officer located geographically near the lawyer’s office.
Tax LawLawyers need capital to start a law firm. This course discusses a young lawyer's access to capital including savings, credit cards, bank loans, friends, partners, and of course the Bank of Mom & Dad.