If you’re thinking about going solo, it’s essential to assess your current resources before taking the leap. While it takes a certain kind of person to bet on themselves, it’s important to be strategic about launching a personal injury practice. Jumping in too soon could mean taking on more risk than necessary.
Having the correct intake team for you personal injury law firm is a priority for your needs. This team can make the difference and place you far from your competitors.
Is the Market Oversaturated with Personal Injury Law Firms?
The market will never be oversaturated with exceptional lawyers and reputable personal injury firms. If you have the skills and passion to transform clients into satisfied clients, then it’s time to share your expertise with as many people as possible. You might even say you have a responsibility to establish your own personal injury practice!
- How Strong is Your Referral Network?
Ideally, your law firm should generate revenue from a robust referral network. With word-of-mouth referrals, you won’t need to rely on paid advertising, which means higher profit margins per case compared to firms that acquire clients through paid channels.
Before launching your solo PI practice, consider these questions:
- How many clients per month do I currently secure from provider referrals?
- How many clients per month do I gain from past client referrals?
- Can this case flow sustain my law firm?
For instance, before I started my own virtual law firm, I consistently brought in cases at the firm where I was employed. It occurred to me that if I redirected these cases to my own practice, I could generate enough income to maintain my current lifestyle.
In simple terms, I had cash flow before I went solo. This allowed me to earn over $100,000 in the first 10 months of going solo.
Do you have cash flow right now?
If not, all is not lost.
You have two options: You can delay going solo to build your referral network, or you can focus on the other two factors discussed in this post to compensate for a weaker referral base.
- How Much Money Have You Saved Before Going Solo?
Having sufficient savings acts as a buffer to cover the growing pains associated with building a referral network. It can take several months for a personal injury case to pay out, meaning you might wait 3+ months before seeing any revenue. During this period, you’ll need to focus on building your referral network. Unfortunately, time is of the essence. If you go solo without an established cash flow (i.e., a referral network), you’ll need enough funds to sustain yourself while covering your expenses.
The situation becomes even riskier if it takes a few months for your first case to come in. In such a scenario, you might go without income for six months or longer. Therefore, if you lack established cash flow, it’s wise to have enough savings to cover your salary for a year. Of course, this depends on your risk tolerance. The more you save, the safer you’ll be.
Alternatively, you could take out a loan to jumpstart your business, but this approach adds more risk to the equation. In my case, I had minimal savings, which wasn’t ideal. However, my referral sources quickly made up for this shortfall. Again, if you can delay going solo until you have cash flow or sufficient savings, you’ll be setting your firm up for success.
- Do you have the necessary experience?
The experience required to run a solo PI practice includes the knowledge to manage a personal injury case from start to finish. It’s crucial to have hands-on experience with all aspects of a case—from intake, strategy, and case maximization to resolution. You need to be familiar with handling liens, insurance, and subrogation—the full spectrum of a PI case.
Unfortunately, large law firms often limit associates’ work to specific stages of a PI case. For example, some lawyers only handle intake and never see what happens afterward. Yes, intake is critical because it involves signing up strong cases and filtering out weaker ones. But there’s much more to a PI case than just intake. Knowing how to manage all stages of a case is a key factor in deciding whether it’s time to go solo.
If you lack experience, you may need to fill the gaps through online CLE courses or by seeking a mentor or coach. However, gaining this experience takes time, which might be a luxury you don’t have at a new law firm. In other words, spending time to gain experience could take away from building your referral network, which can be detrimental. You don’t want to spend too much time learning at the expense of securing new cases.
Knowing When to Start a Personal Injury Firm is Crucial
Going solo requires a careful assessment of your assets before launching your own law firm. Otherwise, you risk taking on significant challenges that could lead to failure. Call now Vocatum Center and make the change that your firm is needing.
The first step to getting great clients is having a great intake. If you want the keys to success, check out our Ultimate Legal Intake Playbook.