Picture this…
It’s 10 PM, and you’re still at your desk, eyes red from the computer screen, mind racing through the endless to-do list. Your phone is buzzing with clients, emails keep piling up, and you’re juggling tasks that seem to multiply by the minute.
If this sounds familiar, you’re not alone.
Many solo entrepreneurs and small business owners find themselves in this exact scenario. You’re caught in a cycle of overwork and anxiety, but unsure when to take the plunge and hire your first employee.
At The Law Office of Hannon De Palma, a custody and family law firm, we understand this struggle all too well. What started as a single-person law firm grew to 17 people in less than 24 months. And it all started with our first hire.
From our experience, we’ve learned valuable lessons about identifying the right moment to hire and how to ensure success with your first employee. Here is our playbook that you can use to inform your own hiring process.
How to know you’re ready to hire your first employee
Finding that first hire can be exciting but daunting. A lot of blood, sweat, and tears go into the first stage of a business, so bringing someone into the fold can feel like a major step. The question isn’t whether to do it, but when.
A pivotal moment came when we realized our founder was flying back and forth between New York and Boston multiple times a week to attend court conferences. We knew right then that it wasn’t sustainable for her to keep up this pace. We needed to refocus her time into leading our growing team of attorneys, and building better processes for the law firm.
The moment you find yourself deeply entrenched in the daily operations of your business, it’s time to consider hiring. We realized our founder, Sherene De Palma, was no longer working on building the business. She was instead fully working inside the business — providing service to the clients, talking on the phone with opposing attorneys, drafting court documents, and appearing in court. This constant engagement left no space for strategic growth and planning.
Step #1: Do an energy audit
I’m a big fan of the phrase, ‘work on your business, not in your business.’ This mantra has guided my approach to scaling and managing our firm effectively — and I recommend this mentality when deciding when it’s the right time to hire.
To determine whether you’re working in the business versus on the business, consider your daily activities. Are you predominantly engaged in activities that keep the engine running, or are you able to find time to make a better engine altogether?
One simple way to find out is with an energy audit. Write down every task you do for an entire day, and mark each task in green if it gives you energy, and red if it sucks energy from you. Then, mark whether it’s an operational task (working in your business) or a strategic task (working on your business).
Your goal should be for your list to have overwhelmingly strategic tasks that give you energy. If your list is all red, watch out! Chances are, nobody is building a better engine and your progress will eventually stall, if it hasn’t already.
Step #2: Set a clear goal
We immediately set a clear objective to reduce Sherene’s operational workload down to 20%. This reduction allowed her to focus on overseeing the team, providing necessary training, and developing more efficient processes.
This 20% goal was reached within 6 months. By then we had built a system for her to oversee the cases from a high level so she could instead focus on helping our team expand and scale, and build our hires into self-sufficient A-players.
It’s here where we see the “see-saw effect” many business owners experience: You get full with client work, realize you’re hitting capacity, and need to hire again. Reflect on your current workload and tasks — are you constantly firefighting, or are you able to think strategically? This reflection will guide you in determining when it’s time to hire your new employee.
Step #3: Measure your capacity
You can bring tools in to help recognize when you’re at capacity. We started using Trello, a visual dashboard and project management tool, to monitor capacity across the entire organization. Every time our founder hits a certain number of cases, we have an automatic process that kicks in letting us know it’s time to hire a new attorney. It’s important that you decide in advance when you will hire, and what measurement you will use to tell you when to pull the trigger — otherwise, you are constantly guessing.
Ease in with a contractor
Once you’ve recognized the need to hire, consider starting with a contractor. This approach offers flexibility and lower commitment, making it an easier first step for small business owners.
Contractors also come with a ton of benefits:
- Flexibility and lower commitment: Hiring a contractor can provide immediate relief without the long-term commitment of a full-time employee. This allows you to delegate tasks and focus on higher-level strategic work without the burden of onboarding a full-time employee right away.
- Delegate tasks: One of my favorite things to ask myself is, ‘how many tasks can I give away?’ For example, virtual assistants can handle email responses, schedule meetings, and manage administrative tasks. Delegation can free up time, allowing you to focus on growing your business.
- Accessing a global talent pool: Outsourcing to a global workforce opens up a vast pool of talent. The first thing I did when I realized our founder was reaching capacity was to find her a virtual assistant in the Philippines. Fast forward a year, and she’s now our full-time bookkeeper and a huge asset to our team. A global approach can provide highly skilled professionals at competitive rates.
- Specialized projects: Contractors are also ideal for larger, more specialized projects. They bring in expertise you may not have in-house. This strategy can be particularly useful when you need specific skills for a limited period. For example, we didn’t need a full-time cybersecurity expert, so we instead hired an expert to audit our security for a 30-day period.
Simply put, contractors are suitable for short-term, specialized projects where flexibility and cost-efficiency are key. But it’s important to note that permanent employees are ideal for roles requiring long-term commitment, a deep understanding of the business, alignment with company culture, and growth investment.
Types of contractors
When thinking about that first contractor, consider the different types available — the one you may need could differ depending on the task required:
- Freelance: Ideal for short-term projects
- Fixed-term: Suitable for projects with a defined end date
- On-call: Perfect for tasks that arise sporadically
- Consulting: Best for specialized advice or strategic projects
Understanding these options can help you choose the right fit for your business needs.
Budget considerations
Developing a budget for hiring contractors involves assessing your financial situation and projecting future expenses for your team members. We back into our numbers by factoring in overhead, technology costs, marketing costs, and other fees. Then, we estimate how much we can pay a new employee and still maintain a 30% profit margin. This gives you a way to gauge in advance what you can afford and how a contractor might fit into your budget.
By starting with a contractor, you can alleviate immediate workload pressures, test the waters of hiring, and maintain financial flexibility to improve your bottom line without impacting your cash flow.
Know your hiring green flags
Identifying the right candidate can be challenging. Here, I’ll share what we look for in a candidate and how to recognize the “green flags” that indicate a good fit for your business.
Green flag #1: They align with your vision
One of the most crucial green flags is finding someone who aligns with your vision and values. When looking at two candidates that have similar skill-sets and experience, the candidate with empathy, tenacity, and being able to stand up for our clients is what moves them to the top of the list. We call this “ruthless compassion.”
It goes beyond providing excellent customer service. It means that they can make a client feel like they are being heard. Nothing is more frustrating than a candidate who talks over you, or is simply waiting for their turn to talk without considering what you’re saying first.
Green flag #2: They’re open to learning
As you may already know, if someone is going to be joining a startup, adaptability is key. Even if they’re very experienced, they should have an openness to learning and adapting to new processes and technology.
For example, we had a standout candidate who fell in love with Trello during our technical training. His enthusiasm for learning new systems was a major green flag for our team, and we knew he’d be a fit.
Green flag #3: They can be a team player
The surest kiss-of-death for a new employee is the one who comes into an organization and wants to immediately change everything. It can cause huge ripples throughout any company.
Adaptability is essential. We look for people who are willing to “do it our stupid way first.” This phrase jokingly means that even if you think you have a better way to do something, we need you to master our way of doing things before suggesting changes to our processes.
Look for subtle clues during your hiring process. Do they constantly talk about the past? Refer to how things should be, or used to be? Or are they looking toward the future, open to change, and willing to work as a team member instead of as a solopreneur?
Green flag #4: They’re in your network
Many times, the best place to start is your inner circle. We’ve found a lot of success in hiring attorneys who have been our adversaries in other cases. We can see their performance “on the court,” and see whether they can handle opposing attorneys with true professional courtesy. We also get to see whether they are the type of attorney who is willing to work towards settling a case fairly and making sure everyone wins, not just their own client.
Seeing potential hires in action can provide a clear picture of their capabilities and how well they might integrate into your team.
What to remember
As I wrap up this guide on when to hire your first employee, I want to ensure you’re equipped with the insights needed to make informed decisions:
- Recognize when you’re at capacity: Find a way to measure your capacity, and keep track of this measurement every week. Decide in advance when this measurement will trigger your hiring process.
- Start with a contractor: Flexibility and lower commitment make contractors an attractive option for initial hires.
- Look for green flags: Identifying the right qualities in a potential hire is crucial. Focus on alignment, openness to learning, relevant experience, and network recommendations.
By keeping these key points in mind, you’ll be better prepared to navigate the hiring process and make decisions that benefit your business.
Encouraged by these insights? Continue reading our other articles on hiring and operational efficiency to enhance your business strategies. Explore guides like How to hire your first designer or Strategic staffing: How to build a team for your small business. The journey to a more efficient and scalable business begins with informed hiring decisions.
