Starting a Solo Practice: Five Things to Consider

Running your own solo practice can be awesome, but it is not for everyone. My firm is relatively new, but plenty of solo attorneys have closed up shop since I opened mine.

If you are thinking about starting your own firm, here are five things to consider before going solo.

You don’t understand how/want to run a business

If you want to spend 99% of your time reading cases, arguing things, and doing “law-talkin’” stuff, you should not start a solo practice. Most solo attorneys say they spend between 25%-50% of their time on things other than practicing law.

That include, but is not limited to: client intakemarketingbookkeepingcleaning/building an officedesigning a website, and troubleshooting and fixing computer/website issues. During any given week, you are likely to do all of those things, along with twenty other things that I didn’t list.

Sure, you can pay to have someone else help with many of those tasks, but probably not right away. One of the keys to running a successful solo practice is keeping your overhead low. If you don’t know what that means, you should not go solo. If your idea of keeping overhead low is breaking even every month, you should not go solo.

For the most part, I genuinely enjoy running my own business. I also know lots of former solo attorneys who did not. Running a business is a totally different animal than practicing law. Make sure you’re up for the challenge.

You like/need/want a regular dependable paycheck

There are lots of good things about working for a firm. Someone else answers the phone, pays the bills to keep the lights on, and most importantly, writes you a check twice a month. If you take a vacation or slack off for a couple of weeks, you are still going to make the same amount.

If you are supporting your family, like to buy cars, or carry other financial responsibilities that require regular, consistent payments (a mortgage comes to mind), going solo might not be for you. If you handle your cash flow properly, you should be able to pay yourself a regular monthly salary. Note: you should be able to, but you might not be able to.

I have had months where I gross $1,000-$2,000. Take out overhead, and if I’m lucky, I’m still in the black. But I also have dip into the firm’s coffers to pay myself. I put aside excess income for a rainy day, but it still kind of sucks to dip into the reserves.

If the idea of not getting a regular paycheck scares the living bejesus out of you, going solo might not be your cup of tea.

You prefer to let someone else call the shots

If you like taking direction and following orders, you might want to stay put. Many associates at firms claim they hate taking orders, but actually fear making the big decisions and blazing the trails. Figure out which one you are before starting your own firm.

You should still have good resources—maybe a mentor—if you run your own practice. But you also have to make decisions, many of which are very stressful and difficult. You don’t get to defer to someone else, or rely on their experience. It’s your call.

By this point in your life, you know whether you like to lead or follow. If it’s the former, go for it. If it’s the latter, you may want to rethink your plan.

Marketing? What does that mean?

If you like to sit in your office and do the work that comes onto your desk, you should not go solo. When you run your own firm, business rarely walks into your office.

You need a marketing plan, which will include advertising in some form. That might mean tv commercials, billboards, or print media. Chances are, you won’t be able to afford that for quite some time. That means you might need to run a clever Google AdWords campaign or try and promote yourself by doing CLEs.

You will definitely need to network with other attorneys. You don’t have to go to every bar function, but you will have to grab coffee or lunch with other attorneys to let them know you exist. If you absolutely hate that kind of stuff, you should not start your own practice.

You like taking planned vacations and ignoring work for a week

As a solo attorney, it’s easy to come in late, or work from home when you feel like it. It’s relatively easy to take a spontaneous three-day weekend. It’s not that easy to take a planned vacation.

To be clear: it’s doable, but it can be tricky. You will need to arrange for someone to be your emergency backup, in case something blows up in a case. You may need to request continuances for a hearing(s). If you can’t access your voicemail remotely, you may need to hire a temporary assistant to answer the phones.

Even when you’re on vacation, you will want to check in. Chances are, your calls are just going to voicemail, and your e-mails are going unanswered. If checking in destroys your vacation, then going solo is not for you. I’ve gone one a few vacations and it definitely detracts from my vacations to check my e-mail and return phone calls.

But the flip side—ignoring everything—is more stressful than checking in and making sure everything is just dandy.

Be honest with yourself

Running your own firm is a ton of work and immensely rewarding, but so are lots of other legal jobs. There are many more considerations beyond these five topics, but it is a good place to start.

Think it through, and if you decide to go solo—welcome to the club!

(photo:http://www.flickr.com/photos/doug88888/2825008179/)

  • Jay

    I’ve been trolling this site for a good year and a half, maybe longer, always dreaming and devising on going solo. Reading your list, I can answer in favor of going solo on every issue, except the paycheck issue. That still scares the wits out of me. Once my wife goes back to work and ideally has good health insurance, then I may have the last hurdle cleared. Even then, I keep thinking to just pull the trigger and go for it. I have several good clients, though not enough to keep my current salary. I have business and marketing plans, pro-formas, good network. Only a smallish raining day fund (not counting 401k).

    My hardest issue is having a proper idea on how much revenue I could expect the first 6 months and 12 months.

  • http://consumerlawyer.mn/cgi-sys/suspendedpage.cgi Randall Ryder

    If you already have some clients, then I think you can anticipate having some revenue. But you will also need to start paying overhead, which will diminish and/or eliminate the ability to pay yourself.

    I can tell you, however, that my biggest expense is paying for health insurance for my family. If you can get that elsewhere, go for it.

  • http://constructionlawva.com Christopher G. Hill

    I agree on the health insurance. It is my single biggest firm expense (aside from “payroll”). I went solo 2 years ago with some clients and that helped. Best decision of my life, but I also know others who didn’t take to it as I have so it’s a big decision.

  • http://solopracticeuniversity.com Susan Cartier Liebel

    In relation to this article, clearly there is much to consider and one size does not fit all. The most important thing to consider is what are your goals…and what are your alternatives.

    If you know this is what you are going to do no matter what, there are low-to-no-cost resources to help AND one has to adjust lifestyle to keep costs down, not just in the practice, but in one’s life so that you can give yourself a chance to make it work financially. That’s the hardest part, tightening the belt all around if necessary.

    The other important strategy is realizing you don’t need to have everything (all the ‘trappings’ – see the word ‘trap’ in there) of a lawyer until you’re ready. We are an impatient society believing we have to have everything now or we can’t do it. Let go of this mindset and grow into your practice. You’ll make smarter choices, spend your lmited resources more wisely, and learn how to first survive, then live, then thrive as a solo practitioner.

    • http://consumerlawyer.mn/cgi-sys/suspendedpage.cgi Randall Ryder

      Just curious, when you say “you don’t need everything,” what are you referring to?

      In my experience, more attorneys going solo refuse to pay for things they need, rather than paying for things that are luxuries.

  • http://solopracticeuniversity.com Susan Cartier Liebel

    Randall, I’m not referencing anything you discussed. I was talking in generalities. However, when I talk with solos they have this idea they must have everything they perceive they need right away or they can’t start practicing as a solo. There is no sense they can grow into ‘more’, ‘bigger’, ‘better’ IF needed. There is no sense they can delay certain acquisitions, grow into a different office environment when the time is right, buy the next upgraded technology when they actually need it and can reasonably afford it. It’s an ‘all and immediately’ proposition or ‘nothing at all’ and this is an artificial hurdle. But it’s also endemic to our profession and to our culture as a whole in many ways.

    • http://consumerlawyer.mn/cgi-sys/suspendedpage.cgi Randall Ryder

      Gotcha. What kind of advice do you give to individuals in that situation?

  • Steve

    On finances and fear of making the leap, it is helpful to look at and completely appreciate the numbers. I find many interested in leaving the Biglaw rat race do not fully understand the financial boon small/solo practice can be.

    Working at a law firm, I was making effectively 1/3 of the total billed, or maybe a bit less. Now that I have my own practice, I cut my billing rate (all existing and potential clients love that). If I keep overhead low, I can have a very high realization rate – I’ve heard some as high as 85-90 per cent – i.e. taking home 85% of what you bill.

    So let’s say you were billing $450 an hour, taking home less than $150 an hour. You could cut your rate to $350 an hour, and possibly realize $300 per hour if you can keep overhead low. If you were billing 2000 hours per year, and can bill (and collect) 1000 hours per year, you can basically make the same amount with far fewer headaches. If you can leverage, i.e. take on an associate or have overflow sources, return can be even better.

    Your mileage may vary, (i.e. if you do a lot of contingency work, you have a different set of considerations) but if you have even one or two decent clients, you can do fine. Build up some reserve $$ if at all possible, but if you are thinking of making the leap – run the numbers and do it. You will not regret it.

    The most important thing, in retrospect, is that you transition from a lawyer to a business person who practices law. And your job, as a business person, is to keep the doors open for the first year.

  • Jim Ryan

    This was a very helpful article. I am also interested in starting my own practice but feel I could use some additional practical legal experience. The problem is the legal job market continues to be brutal here in the southwest. I’m willing to do whatever it takes to obtain some practical legal experience, although the options seem rather limited. I would certainly welcome any suggestions.

    • Jean

      Jim, I have also found this to be a challenge. As a recent law school grad, I have considered going solo in the field of estate planning. I don’t take the bar until February so I was hoping to find a firm that would bring me and, if nothing else, allow me to volunteer my time. I think that building that knowledge before you go in is smart, however, tough to do when you can’t find someone to help you out.

  • Ali H

    I was ruminating on starting my own practice but am swayed against after reading you gross $2000 per month if lucky?

    • Chris J

      No, he said there are months where he only grosses $1000-2000 and keeps overhead low, and if he’s lucky, is still in the black.

      A daunting prospect nevertheless – while I think I would enjoy the lifestyle of being my own boss, not having a regular paycheck is just too scary and the area I live in is already over-saturated with solos and small firms. I would venture that a significant number of them are not doing very well.

  • http://www.swagatusa.com DS

    I started my solo practice a year ago and would never go back. You don’t need all the clients right away. You market, and the marketing usually starts the momentum flowing and sooner than you know, clients come….because they need your services as much as you need them.

    A few tips for new solos:

    1) Form a business entity (not a sole proprietorship). This is something many attorneys will likely disagree with. I have found that the number one thing I want to reduce when I am solo is liability, and I simply underestimated how soon I would have to have employees or outside assistants, even temporary of-counsel lawyers, and the professional liability insurance would not cover anything other than professional malpractice claims.

    2) Be smart about choosing your insurance carrier for professional malpractice insurance. Make sure they cover bar complaints. Good insurance has a great way of giving you the added confidence you so often need when you are new.

    3) If you are in a field that involves frequent visits from clients, do not skimp on getting an office (shared office with receptionist is fine). It is invaluable and you lose more money from looking unprofessional by answering your own calls and meeting people in libraries than you do from the money you spend on these.

    4) Spend money on learning. One of the first things I did was I hired a coach to learn about the business of law. Yes, it was with money I did not have. No, I do not have a second income in the household. Yes, it was worth every penny.

    5) Collaborate, not compete. There is simply more to gain from collaboration than from competing with your colleagues. You may find that they will help you answer a tough legal issue you have never faced, or may cover for you in court at the last minute if you are not the hard-core competition types.

    6) Specialize. Focusing on a single area of law (or a couple of related areas) adds a lot in terms of credibility.

    I know many people will disagree with what I wrote. It is simply what worked for me, without any sugar-coating.

    • Joe Snyder

      DS, could you give information on “legal Coach” – I am interested! Thanks

  • http://taylorsbookpub.com/ Taylor Stonely

    I am a writer creating a series of novels based on a woman rural lawyer. I came across this website and found it to be a useful source of information in my research. I especially like the realistic outlook that is given, including the tasks that are required. It is not just about practicing law, but about marketing yourself and running a business with limited overhead. This article gave me some great ideas to incorporate into my books. Thank you!