Starting a Law Firm Right Out Of School: Challenges and Opportunities

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Starting a law firm right after law school can seem like a daunting task, but Kevin Cheney, a personal injury attorney from Denver, Colorado, shows us that it is possible to build a successful practice with the right mindset and skill sets. On the latest episode of the Maximum Lawyer Podcast, Kevin shares his journey of starting his own law firm and the challenges that came with it.

Here are some takeaways from the episode:

Seek out mentors and have a high risk tolerance. Starting a law firm right after law school requires a lot of courage and risk-taking. Kevin emphasizes the importance of seeking out mentors who can guide you through the process and having a high risk tolerance to overcome challenges.

Be comfortable with asking for business. Getting clients is the hardest and most important thing any law firm does. Kevin advises being comfortable with asking for business and networking to build a client base.

Create a mission statement, vision statement, and core values for the firm. Kevin stresses the importance of involving all staff members in the process and constantly reevaluating the firm’s mission, vision, and core values to ensure they reflect the firm’s goals and values.

Plan for growth. Kevin recommends creating a 10-year plan, a 5-year plan, and a 1-year plan, with a focus on the 10-year plan as success and growth compound over time. He suggests considering factors such as the number of staff and employees, practice areas, and offices, as well as the role of the firm’s leaders and their workload.

Invest in the personal growth of employees. Kevin recommends investing in the personal growth of employees through initiatives such as a book club to achieve growth and success.

Listen in to this episode that provides valuable insights and tips for lawyers considering starting their own law firm right out of law school.

Episode Highlights:

01:55 Starting a law firm

04:40 The challenges of building a personal injury law practice and the necessary funds to handle cases effectively

07:04 Should you open a law firm right after law school?

09:55 The process of shifting roles in a law firm, the importance of focusing on the business for growth

15:10 The importance of creating a mission statement, vision statement, and core values for a law firm

21:56 The thing that’s holding you back from growth

Jim’s Hack: Light Comes Through: Buddhist Teachings on Awakening to Our Natural Intelligence by Dzigar Kongtrul

Kevin’s Tip: Invest in the personal growth of your team through a monthly bookclub.

Tyson’s Tip: Case Text: Meet your new AI legal assistant. Cocounsel does document review, legal research memos, deposition preparation, and contract analysis in minutes – with results you can trust.

Watch the full video on YouTube here.

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Resources: Starting a Law Firm Right Out Of School: Challenges and Opportunities

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Transcript: Starting a Law Firm Right Out Of School: Challenges and Opportunities

Speaker 1
Run your law firm the right way. This is the maximum lawyer podcast, podcast. Your hosts, Jim hacking and Tyson metrics. Let’s partner up and maximize your firm. Welcome to the show.

Jim Hacking
Welcome back to the maximum lawyer Podcast. I’m Jim hacking and Tyson Mediatrix What’s up Jimmy Tyson, my friend, how are you?

Tyson Mutrux
I am well, how are you doing?

Jim Hacking
I’m doing great. I’m doing great. I’m excited. We have one of our favorite guild members on the podcast today. His name is Kevin Chaney. He’s a personal injury attorney out of Denver, Colorado. He’s a great guy. And we’re really happy to have you. Thanks for coming on, Kevin.

Kevin Cheney
Ah, happy to be here, guys.

Tyson Mutrux
I was really excited to see that you were on the schedule for today. I’m really looking forward to talk to you. So I’ve been able to sit in on a guild mastermind with you and chat with you. And we do the same stuff. So it’s kind of fun to be able to talk to another injury lawyer so But tell people about your journey. And then how you came to form Chaney, deluzy. And Howard. Sure.

Kevin Cheney
So I went to law school wanting to become a public defender. That’s kind of always what interested me something I felt passionately about and kind of the mismatch and power discrepancies in our justice system. And so that was always kind of my plan, went to law school. My one year I ended up meeting my best friend and our partner, Tim Galluzzi, and we did mock trial together and kind of took all the same classes and just had a real ball. And my one else summer, I had an opportunity to work for a personal injury law firm in Denver and, and really enjoyed the work enjoy kind of holding powerful insurance companies to accountant when people are injured, and it was like, hey, you know, this would be really cool. And so I started talking with him. And we got this crazy idea that let’s just open up a law firm, as soon as we passed the bar, and most of our professors told us, we were crazy, you know, we should clerk go work somewhere else. But you know, we were like, I think this is what we want to do. And so when we graduated, pass the bar and opened up our law firm, that was seven years ago, last two months ago in February. And we started out doing about half criminal defense, half personal injury work. And over the last few years, we kind of transitioned away from criminal and had been doing exclusively Personal Injury now for about two and a half years here in Denver. And you know, our firms grown from starting out on my dining room table, we had no office, no website, no staff, you know, some really cheap business cards. And now we have a team of 12, and suite office, and it’s just been such an exciting and thrilling experience for us.

Jim Hacking
Alright, Kevin, so let’s talk about those first six months after you opened up your firm, and you hadn’t had a firm before. So what was that like, like having to learn it all on the fly?

Kevin Cheney
It was incredibly scary, but also just really thrilling to be out there working for ourselves. And, you know, we talk to other, you know, people that had graduated, had gotten jobs. And it was just such a different experience to be working for your name on the door, and to be responsible for that. I think one of the real keys to our success, though early on was our willingness to seek out mentors, we really had no idea what we were doing from a business perspective, from a legal perspective. You know, I didn’t know where I was supposed to file taxes. I didn’t know really anything. And we quickly found a group of lawyers, so in small, firm lawyers, during those early first six months, really the first year or two, and it was just a willingness to call people and ask people questions. And it’s really shocking to me how willing people are to share what they know, you know, if you just shoot an email or call somebody, and you’re like, hey, you know, I saw your name on the listserv, or I know you’re, you know, do what we want to do, like, can I take you out to coffee and pick your brain? And I’d say about 90% of people are down for that. And it was just really thrilling. But also, it’s kind of kind of scary time. And now those first six months, I want

Tyson Mutrux
to stay a little bit on this where like you do personal injury. And it’s really hard to do personal injury effectively. Like because when if you just start right out of law school, unless you’re gifted a bunch of money to build up a war chest to pay yourselves and then pay for case expenses. So how were you able to develop, I guess, the funds to build the practice that you have now because you have a you have a really successful law practice now that represents people that have been injured, so but it takes time to get to that point. So whenever you’re given this answer, I want you to think about the person that’s just starting out that says, hey, I want to do personal injury like so. Can you give some guidance on how to build up that war chest to handle these cases the right way?

Kevin Cheney
Absolutely. And you’re spot on, right in order to really be successful in personal injury law. You need the funds to be able to go toe to toe with the insurance company. When we started out. We had $5,000 in our bank account and essentially nothing. I think that you really have two options or a few different options. One, you either need to have money going in. So you’ve worked for another firm you’ve saved up and you’ve got some personal savings or something like that. So that’s kind of one option. Option two is you need to have either collateral in your home equity in your home and able to kind of access a line of credit. Or the third option is you really need to have a second practice area, I think, in the US, at least for the first couple of years. And that’s really what enabled us to do it. So the fact that we were doing criminal defense, we were getting revenue in every month. And you know, we got a little bit fortunate, we got a couple of, you know, now I would say they’re on the smaller side, but at the time like that, we’d get some settlements and be like, Oh, my gosh, like we just made $10,000. It’s crazy. But when you don’t have many expenses, or really any overhead, you know, that can be a lot. The other thing that we did with our first personal injury case that went to trial was we co counsel with a larger firm, we just didn’t have the 2030 $40,000 it would take to get that thing across the finish line. So we called up a midsize firm that we’d really respected somebody that had been a mentor to us. And we’re like, Hey, can we bring you in, we’ll do all the legwork, we’ll learn from you on some trial strategy, and you can fund the case. And you know, we’ll do a fee split. And so I think realistically, if you want to do personal injury only, and you’re not going to have steady revenue, you might not have any revenue for six, nine months a year, you need a substantial savings, or you need a line of credit, otherwise, you’re going to be forced to take really poor settlements, because you’re going to need the money. And you’re gonna say, well, we might as well settle and you could have gotten twice or three times as much as trial. And that’s not fair to your client. And it’s not fair for other personal injury lawyers who are then going to be, you know, cited to that case. So we only paid so and so 25 on a case like that. So

Jim Hacking
Tyson and I are often asked Kevin, whether or not people should open up a law firm right after law school, having been one of the few people who pulled it off. Two questions. One, where do you fall on that debate? And two, what skill sets would you say are necessary for people that want to try it?

Kevin Cheney
Absolutely. So. So I think that there’s too many people that basically say, you should never do it. And I don’t agree with that. I do think that you should go into opening a law firm with eyes wide open about what the realistic expectations are, you know, I don’t think it’s for everyone. I think that the overwhelming majority of people would benefit from getting a little experience building up some savings, making a dent in their student loans, and things like that. But that being said, I absolutely think that it’s possible, I think the first thing I would recommend is really wanting to open up a firm by choice. You know, I think there are some people that really struggle to find jobs. And so they kind of don’t know what they’re really wanting to do. And so they you know, kind of open up a firm by default. And I think most of those firms fail, I do think there are some qualities that someone needs to really possess before opening up a firm and certainly one right out of law school, I think you need a high risk tolerance, you have to go into it understanding that there is a real chance that you will fail, that you will essentially have no money, not be able to make payroll and not be able to keep the lights on and you will essentially have no choice but to go back and get a job. And for some people, that’s just an unacceptable amount of risk. The second thing is that you need to understand that getting clients is the hardest and most important thing that any firm does. And you can be the best lawyer in the world. But if you can’t get business in the door, it’s not going to matter. And so people that feel comfortable networking, people that feel comfortable sharing about their jobs and their roles on social media, and you know, asking people for clients, people that feel comfortable going into a party of their friends and being like, Guys, I’m opening up a law firm, do any of you need any of these legal services, you know, people that feel comfortable asking for business, I think is really important. And then I think the third quality is you have to have confidence, right? If you go into it thinking you’re going to fail, thinking that you’re not going to be able to do it, it may not be for you, at least not in those early stages. But I think if you have a combination of those three, I also would say that the earlier you decide to do it, the better. We decided at the very start of our 12 year that we wanted to open up a firm. And we essentially had two years of free marketing, where we would tell all of our classmates, all of our teachers, like we’re opening up a law firm or opening up a law firm. And we actually had a few people that needed lawyers at the end of our three year that essentially just waited four months for us to pass the bar. And so we had a few cases kind of on deck. I think if you decide, you know, a month before you’re going to open it up that you would it would be a little bit harder to do without kind of that marketing runway.

Tyson Mutrux
I think that’s great advice. We talk a little bit about what your role is now with the firm and then how that has shifted since you launched the firm.

Kevin Cheney
Absolutely. So and I really think that this answer is guided by what You want your firm to look like and also what you want your own personal life to look like in relation to that firm? You know, because I don’t think there’s really a right answer for us. We were very growth minded, you know, we’re not 100% Sure, we want to become like a giant TV advertising firm. But we know that we want to employ 3040 50 people one day, we know, we probably want to be in multiple states. And so the reality was for that type of growth, we needed somebody who essentially worked on the business, you know, 80 90% of the time, at least. And so about a year and a half ago, we made that switch. And I stopped taking cases, I think, right now, I think I maybe have two cases on my docket, and I essentially run the firm, full time, you know, I manage the employees design the processes, and lead up the marketing efforts oversee our director of marketing. And I am here to answer questions about cases, I’d say, you know, I spent about an hour a day just answering questions from staff and Associates and things like that. And that really shifted, when we first started out, you know, we were doing kind of everything. And for those first few years, we essentially each had our own docket. And as we got staff, we would kind of use them sporadically. And it was actually listening to Craig golden, five present and looking at his file line template that really was like, we need to streamline and standardize how we’re doing these. And so that’s when we decided to break our firm up into teams. And so now we have a pre litigation team. And that’s all they do. And as soon as a case decides we need to file, it gets transferred to a completely different team who only does litigation every single day. And it was through that process that I was like, You know what, it’s going to be hard for me, I’m going to miss the practice of law. And, you know, my long term plan, I would like to in three, four or five years really consider hiring a CEO or COO to essentially run the firm. And I might go back to litigating cases, but for now, to really achieve the growth that we want. If you’re only working on the firm or in the on the business 10 20% of the time, you’re just not going to get that growth, like it’s just not enough time to do it. And so you know, you got to make those hard choices. If you have partners, you got to discuss who’s going to do what, but if you want maximum growth, I would recommend, you know, getting out of in the business as quickly as possible to really focus on the business.

Jim Hacking
And Kevin, following up on that. How did you and your partners decide that that was going to be your role? And how did you come to terms with that? Because I know so many lawyers go, Oh, my God, I can’t believe I wouldn’t get to do depositions anymore, or when you get to do trial anymore. So how was it for you individually? And how was that conversation that you had with your partners? Great question.

Kevin Cheney
So I think there’s a few things that kind of go into it, I was very fortunate in that my partner was my best friend. We had worked together on mock trial, numerous mock trials, and moot court competitions, we took all the same classes we studied for the bar together, we had developed, I think a lot of trust, this was not a person I met later, and kind of had to take a leap of faith with this was somebody that I knew I could, you know, run through fire and would take a bullet for. So I think that that honesty allowed us to have some conversations, but there were still some tough conversations. I mean, it was tough for me to be like, you know, litigating cases being in the courtroom, like, that’s the most fun that I have. And I knew that making this choice was going to require me to sacrifice that. On the flip side, my partner, I think, you know, also envisioned himself as a firm owner and kind of making the decisions. And I think he had to be like, the, you know, we’re still partners, right? We still meet as like a board, if you will, and kind of talk about things, but day to day decisions, you know, he gives me his input, and then yields to my decision as a managing partner. And I think that that was a lot of sacrifice for him. And we talked about, you know, how that would be easiest, right? Like, Hey, make sure you’re always soliciting my input, you know, make sure we kind of meet weekly or every other week and kind of go through some of the big decisions. And so you know, it really, I tried to make him feel like an equal partner, you know, which he is in equity as much as possible. And on the flip side, you know, he brings me in to kind of second chair a case every now and then as for trial, and, you know, we kind of have worked through that. But I think that, you know, success requires sacrifice, whether it’s running a marathon, you got to put in the time, the sweat and the tears. And if you want something bad enough, you sometimes have to be willing to give up the good things. And I’ve had to give up, you know, at least in the short term and medium term, my dream of kind of being a top trial attorney, because somebody had to run this business and my skill set, I think, ultimately translated into that. And so we both made sacrifices, and some days I miss it. I mean, I really do, but the proof is in the pudding and the success that we’ve had reaffirms the you know, I think our choice almost every day, I think

Tyson Mutrux
it’s great that you had all those insanely you’ve had a lot of like tough conversations, and that’s great. I want to shift gears a little bit, but I want to sort of stay on the same thing when it comes to stay on the same page when it comes to like future planning and the vision and then implementing a vision and coming up with a vision and core values and a mission statement, all that kind of stuff. So what was that process like for you? Have you been gone through that process?

Kevin Cheney
We have, we have a mission statement vision statement and a set of core values. I wish we had probably started it earlier. And we did it about two and a half years ago is kind of when we really started getting into it, you know, with the mission and core values. It wasn’t just my partner and I, we looped in all of our staff. And I think that’s incredibly important for people, right, you can’t create a mission from the top down, you can’t create core values from the top down, right, you need to talk to the people that are actually doing the work the people that make up your firm, and see what our kind of joint mission is. And we’ve got a little bit lucky in that, because we started the firm as kind of best friends, we’ve kind of had that mentality with everyone that we’ve hired, you know, we’re very team collaborative approach from the way that we do bonuses to the way that we make decisions in the firm, like, we just always stress that we are a team, we’re in this together, we sink or swim together. And let’s all be rowing in the same direction, the vision statement was a little bit different. And, you know, with personal injury law, there’s just so many different ways that you can go, right, like you can try to be a firm that has, you know, 1000 2000 cases and be on billboards and TV, you can be a firm that maybe only has 10 cases, but every one of them is worth a million dollars, you can niche down, you can do general and there’s just so many that you can stay in one state, you can expand to other states. And so, you know, my partner and I had some overlapping vision, but we had some real differences on where we thought the firm could go. And it took a lot of frank conversations. And it also took a lot of, you know, kind of doodling out what the firm would look like. And so I always tell people, I was just talking, I was just doing a presentation for a local bar association on law firm management, I tell people to do a 10 year plan, a five year plan and a one year plan. And think about the 10 year plan, because of the way that success and growth kind of compounds like in five years, you’re not going to be halfway to your 10 year plan, right? Like you’re probably not going to be halfway to like year seven, and then you get that compounding effect and kind of get there. But kind of talk about what it looks like. How many staff do you have? How many employees do you have? What practice areas do you have? How many offices do you have? And also, what’s your role? In the firm? How many hours a week? Are you working? Are you taking cases are you only managing people, and then we kind of worked backwards, but it was a lot of just kind of trial and error. And really in some and again, sacrifice, I think on both of our parts. And we eventually kind of arrived on this melded vision. And then we looped in the rest of the team. And we’re like, Guys, this is what we’re thinking, what do you guys think? And they’re like, oh, that sounds awesome. And we’ve kind of really run with that, you know, over the last, I’d say about a year and a half was going to be really finalized or not finalized. But it’s never done, right. Like you should be constantly reevaluating, like, is this still the mission? Is this still the vision? Does this still reflect our core values, because it’s not like you write it once, throw it in a drawer and never look at it. You know, we have all of our mission, vision and core values blown up right above our water cooler. There you see them every time you go get water or use the fridge. You know, we talk about it in team meetings. We try to use it to make decisions and really work with it as much as possible. I think if you’re going to try to get everything out of it.

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Jim Hacking
You’re listening to the maximum lawyer podcast our guest today, Kevin Chaney. He’s the managing partner of his personal injury firm in Denver, which he started right out of law school. Let’s talk about growth. And Tyson touched on maybe where the future is. But do you and your partners have like a vision as to how big you want to be maybe how you don’t want to be so big? I mean, what are your thoughts on that? And I loved what you said that somebody has to sort of give up the practice of law sooner rather than later and focus on growth of that as a goal.

Kevin Cheney
Yeah, we do have a vision, you know, and it goes 10 years out. We’re still relatively young, you know, I’m 34. And so, you know, 10 years is certainly not the end of my career. But our goal is to go from 12 to 50 people in the next 10 years. We made some big decisions. You know, one of the I was more up into kind of a billboard TV advertising firm, my partner was really firm against that. And we kind of had those discussions and decided that that at least for now, that was not going to be the path that we went down that we were going to refrain from billboards and TV, we do have a plan that we want to be in at least two or three states, our vision is to be the premier personal injury law firm in the Rocky Mountain region. And so that kind of has defined the you know, what our goals are. And then we’ve set like I said, a five year kind of goal and a one year goal on you know, we want to continue to increase revenue, we had a 2022 was our best year yet, we essentially doubled, we became a seven figure law firm in 2021. But we doubled revenue from 2021 to 2022. It wasn’t realistic, you want to be realistic. And your goal is to double again, in 2022 to 2023. But we didn’t want it we were looking for about a 30% increase. It’s a tough goal. But I think it’s an achievable one, personal injury is a little bit harder to estimate than other types of law. Because, you know, there are I mean, this year alone so far, I think we’ve lost $90,000. But we have a lot of big cases kind of coming in the last part of the year. And so it’s a little harder to estimate revenue and profit in a personal injury law firm. But I think you’ve got to have goals that are realistic and attainable. And then we kind of had a path to get them. And so for example, the big thing that we felt we needed to kind of continue that growth was to hire a full time marketing director. Somebody who runs our social media, meets with referral sources, organizes speaking events, handles all of our creative, you make sure we’re shooting tick tock videos, all of that. And so that was the big thing that we implemented, we hired him right at the end of 2022, we’re already seeing a lot more interaction with our firm, we’re getting more calls. And so having you’re picking a growth metric, and then figuring out how you’re going to get there. And oftentimes, it’s hiring somebody, right? Like that’s, I think one of the biggest things that hold people back in the law firm world is they’re scared of hiring, they’re scared of that salary. They’re scared of bringing on another expense. But if you’re growth minded, like you just can’t do it alone, right? Like you just don’t have enough hours in the day. And so often when I meet with law firm people, and I’m listening to what the issues they’re having, or even in the masterminds like almost my advice always like you need to hire somebody, right? Like another lawyer, another staff, a marketer, a clo, like hiring somebody is oftentimes the solution to a lot of problems.

Tyson Mutrux
So true. I think if you’re listening to this right now, you need to go back about two minutes and re listen to that about two or three times because there’s a lot of great information in that little bitty segment. So rewind, listen to that again, that’s really good. All right, we do need to wrap things up. Before I do, I want to remind everyone, if you want to join us in the big Facebook group, go to Facebook, search for maximum lawyer and you can find us there. Also, if you want more high level conversation with people like Kevin go to max law guild DICOM. He’s a wonderful Gillean. And if you don’t mind leaving us a five star review. While you’re listening to the tips in the hacks. Please give us a five star review. We would greatly appreciate it. Jimmy, what is your hack of the week,

Jim Hacking
I was just laughing to myself because our two most recent guests, Kevin, and the one we just recorded earlier today, James James said that most law firm problems can be solved by making more money. Kevin said most law firm problems can be solved by hiring more people. And they are both right. I think those are the keys to success, making more money and having more team members. My hack of the week is a book, it is called light comes through. It’s about awakening to our natural intelligence. I’m about halfway through it, it goes over each of the emotions that we experience and sort of how we can come to terms with those emotions and sort of keep our sanity. It’s a wonderful little book. Again, it’s called light comes through. And it’s about awakening to our natural intelligence.

Tyson Mutrux
nLove it good stuff. Alright, Kevin, you know, the routine by now what is your tip or hack of the week,

Kevin Cheney
I might say part of the hack of the week is to invest in the personal growth of your employees. We implemented this at the end of last year where we started a book club, where we basically picked a self help is kind of the cliche term, but books that I think help in personal growth. And we said, hey, no requirement that you do this, but we’ll buy anyone a copy, we’re going to walk off to ours. In about two or three months, we’re going to order a bunch of pizza. And we’re just going to chat about this. And we our first book was atomic habits by James clear, which I’m sure somebody has talked about, and one of the best habit books ever written. And we’ve just had, it’s been so great for the employees. And even now, you know, a month or two after that people still talk to me, we’re talking about processes. They’re like, Oh, I’m gonna habit stack that or, you know, I really just need to get in the habit of doing that. So it’s not only helped the business, but they’re implementing it in their personal lives. And in the age of Uber competitiveness, right. Like the fact is that employees continue to have all of the leverage in this market with how low unemployment is. It’s just another thing that you can do to say, I not only want you to do the best for me, but I want to be the best for you, and we hope that you’re an employee for life, which is, which is our mantra and CGH everyone who works here, I hope you stay for the rest of your life.

Tyson Mutrux
I love it. We started our book club a few months ago, too, and it’s fantastic. It really is helpful. So I echo everything you said. Alright, so my tip of the week is case text. So if you’ve not checked out case, text, it is amazing. It’s powered by artificial intelligence. And they’ve got something called it’s a new thing called co counsel. And you can actually plug in your facts about your case. And it will come up with deposition questions for you like it gives you like where you can download and everything, it gives you the topics, and then it generates the questions, you can add your own topics, and it’ll generate questions for you. It’s amazing. It will write legal memos for you. You can upload documents to it, and it will summarize the documents, medical records, contracts, whatever. It is amazing. So I highly recommend it. Go to case text. Check them out. Kevin, thank you so much for coming on. Really appreciate it. I really enjoyed discussing this with you. And I wish we had more time but unfortunately Dell but great having you on. Well, thanks

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