In this article, Ramanuj Mukherjee, Co-Founder, and CEO at iPleaders discusses five most important qualities of a lawyer who want to set up a law firm.

Being a lawyer is a difficult job. You have to wear many hats, be different things for different people and go through different phases in your career working yourself upwards learning entirely different set of skills.

However, towards the beginning of establishing your practice (as a solo lawyer or as a partner in a startup law firm), there are certain skills and qualities that are critical. Everyone probably will offer their own lists here with some variation or the other, but I prepared this list taking into account Indian lawyers seeking to set up their own practice, either as a solo practice or starting their own law firm with some partners.

#1

Commercial awareness

This is number one skill for any lawyer, but especially those who want to set up their own practice as opposed to working under another lawyer. Think of all the studly lawyers from college who excelled academically and everyone expected them to excel in the practice of law. Many of them have not really done well in the long run.

Well, they are hardworking, with excellent legal knowledge or at any rate the ability to pick up new knowledge and skills. They make excellent entry level lawyers when working under guidance of a successful senior, but when it comes to starting their own practice, they really crash. Why is that?

Very often it is the critical element of commercial acumen.

All legal practice is limited by financial limitations. You can grow almost any practice to a very large scale and profitable level if you can work out the right unit economics. Unit economics, in basic terms,  is the sum of what you spend for doing any task and what you are able to charge your clients for the same. No matter how good you are at legal work, if you can’t figure this out well, your practice/ firm is unlikely to get far.

It is the unit economics that decide which work you accept, on which kind of work you specialize and how many people you hire.

Let me give you an example. I discovered that a lot of people are willing to pay upto 10k for getting a police complaint registered. This requires a lawyer to spend a lot of time in the police station, and 3 visits on an average. If the average number of visits can be brought down to 2, and 6 hours, filing a police complaint is feasible at 10k fees if you are hiring freelance lawyers in Delhi after keeping a 20% profit margin. It is even better to hire a lawyer at 30K salary per month if you are getting 10 such cases a month or expect to get them over time with minimal (negligible) marketing cost provided that those matters are within a smaller geographical area. If you are doing the work yourself, it is even better, but don’t expect to cross a monthly earnings of 1 lakh with this work. If you can get more work and hire several lawyers who can do this, you can expect to earn a lot more.

That’s unit economics. However, if your clients expect that you will get the FIR registered too, it can get tough, and the unit economics will be upturned.

I was able to create a very good money recovery practice based on that. Most up and coming Supreme Court lawyers, for instance, will charge you between  25,000-30,000 to file a writ petition in the Supreme Court. They know it takes about 3-4 hearings. Some cases will get dismissed on day 1. Some will get 6 hearing. However, at 30,000, they can do 4 hearings, drafting and filing comfortably. So they try to charge that much to every client. If a few of them goes on for a while, it’s ok. Unit economics delivers.

Unit economics is although not the only place where the financial acumen counts. It is the same for client work.

I was referring some work to a lawyer who was going to file it before Delhi High Court. I suggested that he should charge less upfront and 3 times the upfront charge when he delivers a favourable judgment, all agreed upon at the beginning. He was worried, since he charges 2 times of what I was offering upfront and nothing afterwards.

I explained the commercial logic. The judgment is worth hundreds of crores to the business. They are not sure if they will win, so they are conservative about what they should pay before the judgment. If you, however, are willing to take most of the money you charge after the favourable judgment, they will be willing to pay a lot more. A lot, lot more. On the other hand, lawyers are worried about how much they get right in the beginning. When my lawyer  friend submitted a quote accordingly (ensuring there is no illegality in form of contingent fees, of course), he was able to earn 6 times more than what he wanted to charge in the beginning, and the client was more than happy to pay it.

If you are a lawyer, it is very important to understand the client’s economic perspective. It creates win all situations and loyal clients. Even in big law firms, I saw this again and again. Transactional lawyers often get paid after the deal is closed, and a much smaller advance in the beginning. If they insist on a hefty advance, the deal may not come to them at all. Smaller boutique firms are often willing to wait for months to get their fee and it creates a huge competitive advantage. However, they have to know the unit economics of paying lawyers every month while waiting for clients to pay later. Without that, they are doomed.

If a client is trying to recover 5 lakhs of unpaid bill, and you know how to recover it at a cost lesser than 1 lakh, you will find it very easy to bag that client. You also need to communicate the economics of recovering to him. If he thinks it is going to cost him a lot of money, upsetting his economic gains, he will either find a cheaper lawyer or let the matter go altogether. You need to create acceptable choices for your clients that makes sense for the, to go with. That gets you business, so it is better you figure it out.

A lawyer who is not good at law but good at figuring this out, can still have a good practice as he can find other good lawyers to do the work. One of the biggest law firms in India, which I don’t want to name but people in the know will understand anyway, was built by such a lawyer who was great at personal relationships, economics of the law business and getting good lawyers to work from him. However, someone with bad commercial awareness is doomed to work for other lawyers forever unless they find a partner who is good with this.

#2

Ability to make long term investments over short term gains

A few of the lawyers I spoke to thought that this is the most important point and I should begin the article with this. I feel this is second most important quality, and even a skill to an extent, to be able to work for long term success rather than quick wins as a law practice.

Most people start practice of law in order to earn good money. It is natural that you can’t wait to be a millionaire when you finally start your own practice after crossing all the hurdles. However, if you do it just for the money, life is tough my friend, because it is incredibly difficult to make good money as a lawyer when you begin. Also, working on only with eye on the money will make you miss big opportunities.

It takes a lot of time to get become really good at what you do as a lawyer (probably just a handful of legal services and subjects). You need to be willing to work for less money, sometimes even for free perhaps, till you make it as a lawyer or a law firm.

Finding work can be very difficult, and pricing can be incredibly competitive. It takes long term in such a market to build trust with key clients, earn a reputation, hiring the right people to work with you, learning various aspects running the practice and deal with unforeseen setbacks. However, a smart lawyer knows every good deed today sows the seeds of financial and professional success of tomorrow.

One of the major challenge is to identify a niche where significant money can be made, competition is less, but volume of clients in sufficient and you can charge sufficiently to cover your costs and then earn a profit. Every law practice and every lawyer with a solo practice spends some time in the marketplace testing hypotheses for a while to figure out the right practice for themselves.

All lawyers and law firms are constantly looking over their shoulders to see if any other lawyer is doing well in something that they missed out. If they see you have discovered a nice and profitable niche that has little competition, they are likely to immediately flock into that market, increase competition and make things difficult for you just about when you have begun to get a hold of things and see some financial success. This is the point where you either defend your turf by creating a strong organization and retain loyal clients or fail and get absorbed by another law firm.

If you survive such attacks by upstarts and bigger law firms in your niche, then you still may face scaling challenges. You have to decide if you are going to keep entering new markets or stay focussed on the niche you have already chosen. It is a key decision that will determine what your firm will look like in years to come. Add to this the massive threat that automatization of legal work and lifting of ban on advertisement and solicitation by lawyers holds for Indian legal fraternity. In coming years, these will either help you to grow or make your life difficult.

These cycles takes years, and usually a decade or two to complete. Hence, it is critical not to declare yourself winner early – that will make you slow and unprepared, and when market throws a surprise you may not have the strength to fight back. Remember, it takes a long long time to make an established law firm, or even a solo practice.

Aim for early success, celebrate it, but do not get fooled into complacency by it.

#3

Resourcefulness and Obsession with success of the clients

Think of James Bond. No matter how bad the villain, how terrible the situation and how big a threat is, James Bond remains utterly cool and comes up with a fitting response. Lawyers must rise up to the occasion and battle giants for their clients. Lawyers must be what Paul Graham calls Relentlessly Resourceful for their clients, and they get paid for this.

There is no textbook for winning a court case exactly for this reason. No matter what you prepare for, situation will throw something new that you as a lawyer must handle. This requires relentlessly resourceful lawyers. This is the kind of lawyer who gets paid well and gets referred by their existing clients.

Be that lawyer who is obsessing about his clients success. Be the one who is ready to handle anything and doesn’t back down. Be the sort of lawyer who is hired because the client can then sleep peacefully.

It is a mindset to cultivate, not just a state you reach by many years of practice. If you set out to be a lawyer like this by design, you will become one.

And don’t forget, the majority of lawyers are nothing like this. They are bureaucratic, egoistic, proud. If they are not so at the beginning, as they begin to get success their attitude often changes.

Don’t be like those lawyers. Always obsess about the success of your clients, and so focussed on that alone that everything else fades in comparison. Your clients will notice it and you will be rewarded for it, a bit in the short term but massively in the long term as that reputation spreads.

#4

Networking and building lasting relationships

Every Tom, Dick and Harry will tell you how important it is for a lawyer to do networking to succeed. Sure. However, many of them think networking means going to events and exchanging business cards.

If you amass a large number of business cards it is not much likely to help you. Nor will sending random requests and unsolicited mails. That is not networking, that is pestilence.

Instead, create lasting and deep friendships and alliances based on mutual interests with people. Always start by adding value to the people you want to build relationship with. If you are a taker, and always bothered about what you are getting out of it, you will not make lasting powerful alliances. Success in true professional networking requires the ability to give value without worrying about what you are getting back right now. Even here, ignoring short term results and focussing of long term relationships give disproportionately better results over the years.

There are many lawyers who are good at getting the first instruction from the client. However, one must learn how to convert such first time clients into long-term clients who give you work, refer you to their friends and family, and root for your success. If you want to build a law practice of your own and are not willing to develop this as a second nature, it is going to be very hard.

#5

Hiring people and creating a winning environment for them

Some of you want to create law firms with many lawyers as associates and a few partners. There are others who want to run a law practice as a solo lawyer. No matter what you do, hiring the right people and giving them an environment where they can succeed, and setting them up for success, is a skill you must develop.

Even those who don’t hire other lawyers and run a solo practice, will need to hire other support staff (administrative and secretarial) in order to fully develop your practice and achieve the full potential of your practice. On the other hand, if you are building a law firm, hiring talented lawyers, giving them effective training and ensuring that they deal with clients well is the key to success. How would you ensure that they do their job in time, they way that you need them to and without negligence? What will keep them motivated and focussed? Do you need an organizational structure? More importantly, how will they relate to you? What will make them proud about their work?

These are the questions that every leader must face. If you want to start a law practice, you are talking about leading a team into legal battles every day, make no mistake about that. You are going to be a leader, and if you are not a good one, your team may not have a fighting chance.

How do you learn these skills and develop these qualities?

Where do you learn these skills and how do you develop these qualities? Well, there is no way you can just read this and learn these qualities. Sorry, that is just not going to happen. Learning the law from a course is easy, but how do you learn leadership by reading some text or watching a video?

However, what we can do is instigate you to think, to anticipate, to plan out things so that you set yourself and your practice up for success.

Once we can make you present to the challenges of setting up a law practice, and we make you explore different issues related to it, and you begin to make strategies to prevail, our job is done. At that point, we have succeeded.

Your job is to make yourself aware about the challenges, and engage with them with courage, tenacity and creativity. Let us know what are you thinking in the comments. We look forward to knowing your thoughts. You can check out our course on Law Practice Management from which we shared this lesson for all of you. It is available at a very discounted price for some time.

If you want to strengthen your knowledge in any area of law check out these courses. All the best!