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Jul 22, 2015
Law Firm Dissolution – New Firm Startup – Steps to Be Taken
Last week a firm advised that their law firm was splitting up via a dissolution and forming two new law firms. I outlined some of the steps that would need to be taken to dissolve the firm.
This week I will discuss some of the typical steps that will need to be taken to start the new law firms. Some of these steps include:
ESTABLISH NEW LEGAL ENTITY
- File articles or other documents for entity formation. (LLC, LLP, PC, etc.)
- Obtain FEIN Number
- Open new bank accounts
- Establish line of credit with bank
- Draft operating agreement/partnership/shareholder agreement
- Agree on approach to partner compensation
- Draft a business and marketing plan for the firm.
- Obtain any required business permits.
- Obtain office space, if moving, and negotiate lease – or negotiate new lease with landlord of present space.
IT & SYSTEMS
- Decide on equipment and software being retained
- Decide on billing and accounting system data conversion strategy.
- Decide on MS Exchange Server conversion strategy.
- Decide of document management system conversion strategy.
- Purchase new software that may be required as a result of licensing.
- Install, configure, and populate billing and accounting software.
- Obtain new internet domain name and e-mail addresses
- Notify courts
- Notify bar associations
- Notify all vendors
- Notify post office
- Notify insurance carriers
- Obtain malpractice insurance with tail coverage
- Notify Yellow Pages and other directories
- Notify phone company.
- Obtain new phone number if needed
- Notify tax authorities
- Notify Westlaw/Lexis, etc.
- Employee meetings
- Setup payroll system – in house or outsourced
- Deal with medical insurance transfer
- Deal with 401k and other benefit plan transfer
- Update employee handbook
- Update administrative policies and procedures manual
- Decide on whether the firm if staying in current space or moving. If staying, decide on how much space is excess
- If staying, decide on what space the firm will occupy and what space will be sub-leased or turned back to the landlord if possible
- Negotiate lease with the landlord
- Office signage
- Decide whether any space improvements are needed.
- Decide on internal move date and who will be in what locations (if staying)
CLIENT RELATIONS AND DEVELOPMENT
- Notify clients of dissolution – joint letter – both firms – in accordance with rules of professional responsibility
- Meet with clients
- Develop new sources of clients
PUBLIC RELATIONS AND MARKETING
- Public relations campaign
- Business identity plan (branding, logo development, etc.)
- Create marketing collateral materials (letterhead, brochures, business cards, etc.)
- Create and launch new website
- Open house or some event
The tasks involved in launching a new firm are numerous, specific to each individual firm, and this is just a starting list. You can use this list as a starting point to develop your own project plan. Suggest that you create a central project plan to get everyone handling various tasks on the same page. The plan should include tasks, specific responsibilities and start and target completion dates.
Good luck with your new firm!
Click here for our blog on succession
Click here for out articles on various management topics
John W. Olmstead, MBA, Ph.D, CMC
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