Most new attorneys choose to join an established firm after law school. Others explore the idea of starting a solo firm. How do you decide which is a better fit for you?
Here are some considerations I suggest from personal experience to help you decide if you should start a law firm.
It’s well-known that most lawyers graduate from law school with student loan debt, which can be substantial. With that financial obligation in mind, signing on with a law firm as a junior associate offers stability with a steady paycheck. Plus, you’ll most likely have health insurance, paid time off, and other benefits.
As a solo practitioner, particularly when you’ve just started, you won’t have the luxury of an established client base with incoming revenue. You will need at least four months of a financial cushion to help you get up and running. Therefore, before you take the leap, create an intentional plan to save these funds. It could be several months before you have money coming in rather than going out.
Consider some of the expenses you’ll need to cover when you start a law firm:
- Office space and equipment
- Professional and malpractice insurance
- Membership for legal databases (like Westlaw)
- Technology for virtual consultations and scheduling
- Utilities and rent
Specific Practice Area
When you join a firm, it’s more doable to focus on a niche practice area, such as product liability or criminal defense. There will also be senior partners who can mentor you in the early days of your career.
If you start a law firm, you might not have the luxury of only taking cases in an area that interests you. To make ends meet, solo practitioners often work across a wide range of practice areas, from personal injury to family law. Going solo might be a better choice if transferring your focus does not bother you.
As a junior lawyer at a firm, you are expected to put in long hours. You do not have the seniority to delegate tasks so more senior members will most likely delegate their minor or necessary tasks to you. However, someone is there to cover for you if you become ill or cannot meet a prior commitment. You don’t have to worry about loose ends, missed court dates, or filing deadlines.
When you open a law firm on your own, you might not have a day off for weeks on end. It is more difficult to sustain a healthy work and personal life balance when everything depends on your direct participation. You also must consider what happens to your clients if you are ill.
One benefit that solo lawyers enjoy is deciding which cases to accept and the clients they want to represent. As someone right out of law school, senior or high-ranking partners assign cases and clients to you. Junior associates rarely have the authority to request or refuse a case.
When you start a firm, you enjoy greater flexibility to set your hours, decide which cases to accept, or whether to work remotely. Being your own boss allows you to set the course and the pace, whether you intend on remaining a solo practitioner or bringing on additional lawyers.
Whenever two or more people are working together, there is the potential for conflict. Likewise, there is also the potential for friendship and camaraderie. Starting your law firm can be a lonely experience, especially in the early days when you cannot afford to bring in an associate or a paralegal.
On the other hand, a solo firm practically guarantees that you won’t have workplace disputes – unless you argue with yourself.
Compensation & Fees
Lawyers are compensated by the hour, on retainer, a flat fee, or a contingency basis. The payment structure usually depends on the type of law firm and the practice area.
For example, car accident lawyers and other negligent injury attorneys often work on a contingency basis because financial compensation is the only remedy for a personal injury lawsuit. For context, a contingency fee structure means that you are paid only if you successfully recover compensation for your client.
Most of the time, lawyers in a more prominent firm bill their clients by the hour. High-ranking lawyers rarely take care of the administration function associated with hourly billing. Someone else tracks their hours, sends an invoice, and deposits the client’s payment.
As a solo practitioner, you are responsible for all financial aspects. Based on the payment structure you choose, it could be several months before your firm is profitable enough for you to write yourself a paycheck.
Ultimately, It is Your Choice
No one can decide for you whether it’s better to join a firm or start a law firm right after school. You will need to weigh the pros and cons, benefits, and challenges, and make the best choice for you.
Some lawyers join an established law practice to help them get on their feet after law school. During that time, they learn how to apply what they learned in real-life cases. Later, they might decide to venture out on their own.
However, if you decide to start a firm right after law school, there are many resources to help you. A great place to start is your state or local bar association. Another is a local chamber of commerce. Outside of those options, make an effort to establish a network to attract clients and get advice from accountants, marketing experts, and other business professionals.
All opinions, advice, and experiences of guest bloggers/columnists are those of the author and do not necessarily reflect the opinions, practices or experiences of Solo Practice University®.