Opening A Law Firm in Sabah
March 18th, 2020 came and went. The Federal Government of Malaysia implemented a cordon sanitaire on all its states including Sabah. Just a week before that we were feeling secure in knowing that Malaysia seemed to have its Covid-19 cases under control. No one could have predicted that things would change so drastically due to a pandemic that was predicted by Bill Gates 5 years prior to the new norm in which we now inexplicably find ourselves.
What does it mean for many of us lawyers? The loss of jobs for legal associates and failure to retain a seat at the firm where pupils undergo their chambering period, as smaller law firms find it difficult to sustain their businesses amidst the uncertainties brought about by the Movement Control Order (MCO) and Rehabilitative MCO. The new norm is inevitable, but what exactly is the new norm for lawyers who find themselves at the mercy of their employers?
Enter self-employment. There could not be a less opportune moment than now to start your own law firm. If you have the self-confidence that you can make it on your own, then starting your own law firm is a very viable option.
Before deciding to open a law firm though, I would recommend that you get acquainted with your own reasons for doing so. It is a business and like all other businesses, there are risks involved. The most prominent risk for a law firm is professional negligence, so be sure you have plans to prevent that from ever happening.
If the reason to opening your own law firm is to sustain yourself, then have a business plan ready. If it is only to keep your lawyer's licence active while you get into other income-generating activities, then you would be better off asking a close friend to 'park' your licence at their firms. Usually, smaller firms would not mind this as long as you do not do anything that can harm their reputation.
If you are undecided, then I would recommend that you consider apprenticeship at a law firm that practices in the areas of law that you like. If you are able to sustain yourself with a small monthly sum, consider negotiating with a law firm of your choice to agree to a small salary in return for learning the business, on top of the legal aspects of the job. Many existing sole proprietor firms would agree to take you on, especially if you are transparent about your intentions and show yourself to be a hardworking and dedicated apprentice. In this situation, both parties win and the pandemic is just another occurrence of life that you and your new boss will overcome together.
If you are ready to be on your own, consider the following steps to open your law firm. Only steps number 2 and 3 are mandatory. The others are just my humble suggestions.
Write your Business Plan. Come up with a clear vision of your new firm (the 'why') and list down your new firm's mission (the 'how' to achieve your 'why'). Make sure you know your USP (unique selling point). While marketing is a prohibited activity in our profession, doing good work is available as a marketing tool. Let your clients help you with marketing by word of mouth. All you need to do is do your work diligently and communicate with your clients properly. Make sure you empower your client along the way by taking the time to explain to them the legal process or at least your legal strategies. Make sure you understand your client's objectives and help them reach it within the law. Happy clients have proven to give the best referrals, in my experience.
The prerequisites. Decide on a name that is within the rules. Decide on a bank for your firm and trust accounts. Before opening an account, you need an approval for your new firm's name from the Sabah Law Society (the Bar). For more on the administration of trust accounts, do refer to the Advocates Account Rules 1988. If you are unsure of any of the rules, the Bar will be able to assist (you may want to set an appointment with any of the executive committee members (Exco) or the Bar's Sub-committee on Remuneration Rules or the Sub-committee on Members Welfare & Wellbeing). Decide on telephone (mobile or landline?) and facsimile services (internet or landline?). Decide on a professional indemnity insurance provider. Decide on website and email provider (although using Google's free website and gmail is just fine if you are looking to cut costs). Be sure to adhere to the rules regarding law firms' websites. Decide on staffing. Will you be going to the Courthouse a lot? If yes, then you need someone to help you pick up calls and respond to clients while you are occupied at the Courthouse. Decide on office space. Will you work from home? Co-working space? Rent / buy a space for your office? These are all available options.
Register. Once you have decided on step number 2 above and set them up, you can go ahead and tell the whole world about your firm! Before registering your firm with the High Court in Sabah & Sarawak, you will need to get approval from the Bar on the name of your firm. Once you have that, then you can send out the letter of your firm's commencement of practice. To do this, just address a letter to the High Court in Sabah & Sarawak (which you can serve on the High Court in Kota Kinabalu) under your new firm's letterhead stating the date of commencement of your new law firm, your office address, telephone number, facsimile number (if any), email address, website address (if any), and office hours. Send a copy of this letter to the President of the Bar (Sabah Law Society), the State and Federal Attorney-General's Chambers, the Registrars of the High Court in Kota Kinabalu, Sandakan and Tawau, the Directors of the Inland Revenue Board, Insolvency Department, Lands and Surveys Department, Companies Commission of Malaysia, and all other legal firms in Sabah.
Work. That's it! You're in business. Follow your business plan and tweak it as you go along. Do not worry about failing, just make sure you always have a mentor for the legal and business side. If you can find a mentor for both aspects in one person, great! Otherwise, there is no rule to stop you from having as many mentors as you need to help you in your new endeavour. Countless number of senior lawyers have cheerfully helped me whenever I was stuck, so be bold and ask that senior lawyer you admire if she / he is willing to be your mentor. Most of them are more than happy to teach the young ones. Also, I find that it is important to always ask questions when in doubt. Ask a few people, then make your own decisions. Do your own research but also consider other people's experiences and views. In the end, the decision is still yours to make, as the whole purpose of setting up on your own is to provide legal services in a way that only you can.
All the best! Being self-employed is very liberating if you do not mind the risk of failing. As long as you believe in yourself and have a strong support system that will be there to guide and cheer you on, being on your own could be the most freeing, satisfying and empowering adventure of your life. I hope to see you on the other side!