One of the biggest headaches I encountered when I opened my own law firm was figuring out the reconciliation requirements by the Virginia State Bar. They are extremely important but there seems to be little helpful information out there on what is actually required.
Read your state bar rules. Read them again. And read them again. Handle the reconciliation rules like you would handle the law in any of the client's cases. Dissect them, pull them apart and break them down into subsections. If you don't understand any of those subsections, email a long-time practicing attorney and ask. Chances are, they'll be happy to explain it in simplified terms.
Once you understand what is required, do it and do it on time. In Virginia, we are required to do some reconciliations monthly and some reconciliations quarterly. The point of these reconciliations is to ensure that you trust account is in order, the funds are all accounted for and the proper disbursements have been made. This allows the attorney, in the case of a mistake, to catch it quickly and remedy that mistake. Personally, I prefer to do my monthly and quarterly reconciliations every month. It provides me with a more standard routine and is an even quicker check on my trust account than waiting every three months.
As with everything, schedule your reconciliations. On the 30th of each month, schedule a time, let's say from 4 - 5 p.m. to sit down and do your reconciliations. Putting it on your calendar will ensure that it does not fall through the cracks and will ensure you actually complete them within the required time frame.
Reconciliations are extremely important, especially for a solo practitioner who is handling a multitude of tasks at all time. Do not put your reconciliations off and if you are ever unsure, simply ask someone.
If you are a solo practitioner or thinking about "flying solo" and would like to talk about the process, please contact us at (804) 447-0146 or clbaudean@baudeanlaw.com.
Tuesday, June 24, 2014
Thursday, June 19, 2014
Flying Solo - Keep Your Books Regularly
Now you've set your books up, which is certainly important. Maybe more importantly, however, is keeping your books regularly.
Whether you use a manual system or a program, make sure you keep your books up-to-date. Depending on the amount of activity in your firm, this may require updating your books daily. At the end of each day, or at the very least the end of each week, compile all of your receipts. Enter those purchases into your bookkeeping system (use as much detail as possible so that each purchase is easily identifiable). Keep your receipts in a specific, safe, confidential location. This will make your life much easier when it comes time to do your taxes.
It may be time to sit down with an accountant now, even if you are handling your books on your own. You will want to make sure you know exactly what you can deduct on your taxes now rather than later. It is much easier to keep track of expenses/deductions as you go rather than waiting to compile all of that information at the end of the year. If you wait until the end of the year, chances are you will forget some things. Forgetting expenses and deductions results in higher tax liability, meaning: you pay more money.
Depending on your level of organization, you may want to schedule a time in your day/week to take care of your bookkeeping to make sure it does not slip through the cracks. It is an easy task to push off but it is not an easy thing to fix when you've missed things in the past.
If you are a solo practitioner or thinking about "flying solo" and would like to talk about the process, please contact us at (804) 447-0146 or clbaudean@baudeanlaw.com.
Whether you use a manual system or a program, make sure you keep your books up-to-date. Depending on the amount of activity in your firm, this may require updating your books daily. At the end of each day, or at the very least the end of each week, compile all of your receipts. Enter those purchases into your bookkeeping system (use as much detail as possible so that each purchase is easily identifiable). Keep your receipts in a specific, safe, confidential location. This will make your life much easier when it comes time to do your taxes.
It may be time to sit down with an accountant now, even if you are handling your books on your own. You will want to make sure you know exactly what you can deduct on your taxes now rather than later. It is much easier to keep track of expenses/deductions as you go rather than waiting to compile all of that information at the end of the year. If you wait until the end of the year, chances are you will forget some things. Forgetting expenses and deductions results in higher tax liability, meaning: you pay more money.
Depending on your level of organization, you may want to schedule a time in your day/week to take care of your bookkeeping to make sure it does not slip through the cracks. It is an easy task to push off but it is not an easy thing to fix when you've missed things in the past.
If you are a solo practitioner or thinking about "flying solo" and would like to talk about the process, please contact us at (804) 447-0146 or clbaudean@baudeanlaw.com.
Tuesday, June 17, 2014
Time Out: Find your Passion
While you're in the process of opening your own law firm, there are a lot of things to overwhelm you: the books, the clients, the practice areas, taxes, etc. Take a break every now and then and find your passion. Why are you doing this?
If you are doing this because you need to do it, find something in your practice that you are passionate about. Whether you are passionate about working with children, defending criminals or consulting with businesses, define your passion. When you get overwhelmed by the other aspects of running your firm, take a time out and work on your passion. It may help you re-focus and gain momentum to keep growing.
Your practice is just that: yours. It is only going to succeed if you want it to succeed. In order to do that, you need to constantly remember why you are doing what you are doing and what keeps you pushing forward. You can only succeed on your own if you have a passion to succeed on your own. There will be no one hovering over you to make sure you are getting your work done (except for maybe your clients) and you won't grow unless you are pushing yourself and your practice to grow.
If you are a solo practitioner or thinking about "flying solo" and would like to talk about the process, please contact us at (804) 447-0146 or clbaudean@baudeanlaw.com.
If you are doing this because you need to do it, find something in your practice that you are passionate about. Whether you are passionate about working with children, defending criminals or consulting with businesses, define your passion. When you get overwhelmed by the other aspects of running your firm, take a time out and work on your passion. It may help you re-focus and gain momentum to keep growing.
Your practice is just that: yours. It is only going to succeed if you want it to succeed. In order to do that, you need to constantly remember why you are doing what you are doing and what keeps you pushing forward. You can only succeed on your own if you have a passion to succeed on your own. There will be no one hovering over you to make sure you are getting your work done (except for maybe your clients) and you won't grow unless you are pushing yourself and your practice to grow.
If you are a solo practitioner or thinking about "flying solo" and would like to talk about the process, please contact us at (804) 447-0146 or clbaudean@baudeanlaw.com.
Monday, June 16, 2014
Flying Solo - Keeping your Books
Assuming you've completed the tasks in my previous post, you are now licensed and insured and ready to open up shop. This may be in a shared office space (check your bar rules to make sure you are in compliance with where you operate), a private office space or a home office (again, check your bar rules).
You're ready to take on a client...or are you? Where are you going to deposit the check your first client hands you? How are you going to record that deposit?
You need to set up your books and bank accounts. These are two very important tasks and you need to take your time to make sure they are set up properly and in accordance with your bar rules. You will need an operating account and a trust account. You may choose to set these up at two different banks to reduce the chance of accidentally depositing trust account money into your operating account. Make sure your accounts are distinguishable in some way so that you are clear when you are writing a check from your operating account or your trust account (different check sizes, designs, etc.). Talk with your banker about account fees: you will need to make sure you are covering an trust account operating fees out of your own pocket and that it is not coming out of the trust account itself (remember, the funds in the trust account are still owned by the client, not you).
Once your bank accounts are set up, you need to determine how you will keep your books. You always have the option of hiring someone to do this for you. If you choose to hire someone, remember that you are ultimately responsible for all of the funds in your law firm and you need to closely supervise that person. If something goes wrong, the responsibility and/or blame will fall on you. Assuming you don't want to hire someone, do your research. Use a program that works for you and that you fully understand. See if there are some free or cheap seminars on how to use a particular program. You will want to have a complete understanding of the program. If your books are not set up properly at the beginning, it will be a huge headache trying to figure them out later. Remember, your state bar can likely ask to inspect your trust account books at anytime to ensure you are following the proper rules.
Take your time setting up your bank accounts and books and ask someone if you need help understanding any part of it. This is one of the most important aspects of running a law firm and it is essential that you set up a process that is easy for you to follow and that your records are complete and accurate. If you have decided to "fly solo" and would like to talk about the process, please contact us at (804) 447-0146 or clbaudean@baudeanlaw.com.
You're ready to take on a client...or are you? Where are you going to deposit the check your first client hands you? How are you going to record that deposit?
You need to set up your books and bank accounts. These are two very important tasks and you need to take your time to make sure they are set up properly and in accordance with your bar rules. You will need an operating account and a trust account. You may choose to set these up at two different banks to reduce the chance of accidentally depositing trust account money into your operating account. Make sure your accounts are distinguishable in some way so that you are clear when you are writing a check from your operating account or your trust account (different check sizes, designs, etc.). Talk with your banker about account fees: you will need to make sure you are covering an trust account operating fees out of your own pocket and that it is not coming out of the trust account itself (remember, the funds in the trust account are still owned by the client, not you).
Once your bank accounts are set up, you need to determine how you will keep your books. You always have the option of hiring someone to do this for you. If you choose to hire someone, remember that you are ultimately responsible for all of the funds in your law firm and you need to closely supervise that person. If something goes wrong, the responsibility and/or blame will fall on you. Assuming you don't want to hire someone, do your research. Use a program that works for you and that you fully understand. See if there are some free or cheap seminars on how to use a particular program. You will want to have a complete understanding of the program. If your books are not set up properly at the beginning, it will be a huge headache trying to figure them out later. Remember, your state bar can likely ask to inspect your trust account books at anytime to ensure you are following the proper rules.
Take your time setting up your bank accounts and books and ask someone if you need help understanding any part of it. This is one of the most important aspects of running a law firm and it is essential that you set up a process that is easy for you to follow and that your records are complete and accurate. If you have decided to "fly solo" and would like to talk about the process, please contact us at (804) 447-0146 or clbaudean@baudeanlaw.com.
Flying Solo - Where to Start
Once you've decided to start your own law firm, where to start can be particularly overwhelming. Sure, you know there are a ton of things you need to get done and put in place, but what needs to be first.
The answer to that question is probably going to depend on why you're opening your own law firm. Do you want to open your own law firm or are you doing it out of necessity? If you're flying solo because you want to, then you may have the luxury to take some time to get everything in order. If you're flying solo because you need to, you may need to move a little quicker to get some income coming in the door. That does not, however, mean you should skip over necessary parts of the process to ensure you are flying solo correctly.
What is the name of your firm going to be? Make sure it is in compliance with your local and state bar rules (for example, you may not be allowed to use certain words that would associate you with a state, county, city, etc. and you need to ensure that if you are an LLC or PLLC that you law firm name includes that designation).
Once you've determined your name, you need to register. Depending on your locality, you will need to register with multiple organizations/agencies. Register with your state corporation commission (remember to include a registered agent), your state bar and most likely with the locality in which you're office (remember, this might be your home at first) is located. These typically require some amount of filing fees to be completed but are necessary to do BEFORE you start practicing law.
The next big thing to get in order is your insurance, particularly malpractice insurance. You will want to have malpractice insurance in place before you begin practicing law so that you are not only in compliance with your ethical rules but so that you are protected legally. This can take a few days to complete the application and get approval. Talk with various insurance companies to find out their rates, if they will apply the malpractice insurance back to the date of application and whether they take installments for payments.
Once those tasks are completed and your licenses and insurance are in place, you're ready to take the next step in opening your law firm. If you are thinking about flying solo or are currently in the process and would like to discuss your experience, please contact me at (804) 447-0146 or clbaudean@baudeanlaw.com.
The answer to that question is probably going to depend on why you're opening your own law firm. Do you want to open your own law firm or are you doing it out of necessity? If you're flying solo because you want to, then you may have the luxury to take some time to get everything in order. If you're flying solo because you need to, you may need to move a little quicker to get some income coming in the door. That does not, however, mean you should skip over necessary parts of the process to ensure you are flying solo correctly.
What is the name of your firm going to be? Make sure it is in compliance with your local and state bar rules (for example, you may not be allowed to use certain words that would associate you with a state, county, city, etc. and you need to ensure that if you are an LLC or PLLC that you law firm name includes that designation).
Once you've determined your name, you need to register. Depending on your locality, you will need to register with multiple organizations/agencies. Register with your state corporation commission (remember to include a registered agent), your state bar and most likely with the locality in which you're office (remember, this might be your home at first) is located. These typically require some amount of filing fees to be completed but are necessary to do BEFORE you start practicing law.
The next big thing to get in order is your insurance, particularly malpractice insurance. You will want to have malpractice insurance in place before you begin practicing law so that you are not only in compliance with your ethical rules but so that you are protected legally. This can take a few days to complete the application and get approval. Talk with various insurance companies to find out their rates, if they will apply the malpractice insurance back to the date of application and whether they take installments for payments.
Once those tasks are completed and your licenses and insurance are in place, you're ready to take the next step in opening your law firm. If you are thinking about flying solo or are currently in the process and would like to discuss your experience, please contact me at (804) 447-0146 or clbaudean@baudeanlaw.com.
Flying Solo
Flying Solo is a blog that is intended to provide practical experience of opening my own law firm after law school. In this first post, I will give you my brief background to get started. You can expect to hear anectdotes, lessons learned, and current struggles and my attempts to overcome them.
Upon graduating law school, I had a great job lined up and was ready to tackle the bar exam. I spent that summer doing just that and passed the bar exam in October. I was working my first full-time legal job, clerking for my hometown Circuit Court and trying to figure out what to do next. See, when I graduated law school, the legal economy was still changing drastically. New lawyers expectations, however, had not caught up with those changes. We (new lawyers) were still being told we should have our next job lined up 9 months in advance. Meanwhile, firms were only hiring for positions open within the next couple of months. During the 9 months from passing the bar exam until my clerkship ended, I talked at length with many people in my life about where I would go from there.
During those 9 months, I discussed the possibility of "flying solo", "hanging a shingle", or just plainly: opening my own law firm. While I liked the idea and knew I could do it, I ended up taking an associate position with a local law firm. Turns out, that position was just the push I needed to go out and open my own law firm. I learned quickly that I like to be in charge and in control of my own practice of law, my reputation and the cases I take. So, the October after my clerkship ended, I started my own law practice.
There have been ups and downs and many obstacles I did not expect to encounter along the way. I hope sharing my experiences with you will help you in opening your own firms and to become successful solo practitioners. If you would like to discuss my experiences, your experiences or the process of "flying solo" at any time, please contact me at (804) 447-0146 or clbaudean@baudeanlaw.com.
Upon graduating law school, I had a great job lined up and was ready to tackle the bar exam. I spent that summer doing just that and passed the bar exam in October. I was working my first full-time legal job, clerking for my hometown Circuit Court and trying to figure out what to do next. See, when I graduated law school, the legal economy was still changing drastically. New lawyers expectations, however, had not caught up with those changes. We (new lawyers) were still being told we should have our next job lined up 9 months in advance. Meanwhile, firms were only hiring for positions open within the next couple of months. During the 9 months from passing the bar exam until my clerkship ended, I talked at length with many people in my life about where I would go from there.
During those 9 months, I discussed the possibility of "flying solo", "hanging a shingle", or just plainly: opening my own law firm. While I liked the idea and knew I could do it, I ended up taking an associate position with a local law firm. Turns out, that position was just the push I needed to go out and open my own law firm. I learned quickly that I like to be in charge and in control of my own practice of law, my reputation and the cases I take. So, the October after my clerkship ended, I started my own law practice.
There have been ups and downs and many obstacles I did not expect to encounter along the way. I hope sharing my experiences with you will help you in opening your own firms and to become successful solo practitioners. If you would like to discuss my experiences, your experiences or the process of "flying solo" at any time, please contact me at (804) 447-0146 or clbaudean@baudeanlaw.com.
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