Starting your own law firm is exhilarating and daunting. Choosing whether to go solo or join up with a partner is not the most exciting part of the process, but it is critical.
Depending on your personality, your business skills, and your legal skills, here are some ways to decide whether to take on a partner.
First Things First–Make Sure You Want to Run a Business
Whether you choose the solo or partnership route, you are still operating a business.
You will have overhead, you will need to find clients, you will worry about paying yourself, and you will be running an actual company on top of practicing law. If you are not prepared for all of those tasks, you should hit “back” on your browser.
Even if your plan is that one partner is the “business person,” the other partner will still need to have a good idea of how a business works. The biggest benefit of forming a partnership is sharing ideas and making critical decisions together. If one partner cannot meaningfully participate in business decisions, it just will not work.
And believe it or not, there will be lots of business decisions.
The Benefits of Going Solo
Be Your Own Boss
If you want carte blanche and detest the idea of answering to anyone else, going solo may be your best option. To be fair, as a lawyer you work for the court, and you are at the mercy of the court’s discretion, but you get the idea.
Most people dream of never having a boss. It can be the greatest thing ever. That said, when you don’t have an external boss, you have to be prepared to be your own boss.
You are responsible for motivating yourself to show up to work every day. You are responsible for ensuring you actually work every day, instead of just updating your Netflix queue. When things get busy, you had better make yourself show up early and stay late. When things slow down, you had better still come in and work on marketing. If you are used to doing your own thing and can also motivate yourself, you are prepared to be your own boss.
You Earn the Money and Then You Keep It
One of the most satisfying aspects of being a solo is that if you earn it, you keep it. You don’t share your fees with anyone. Sometimes I co-counsel on cases, but even in those situations, attorney fees are generally divided based on actual work done.
I never worked at a big firm, so I never had the experience of charging clients $350 an hour, and then taking home maybe 15–25% of that. To be fair, I understand why it works that way because it does cost money to get clients and keep the lights on.
In a partnership, however, you will likely be sharing at least some of the fees. That can be one of the reasons why it works: you can smooth out the income fluctuations by having two attorneys. But you may also be sharing a portion of fees with a partner that is not pulling their own weight. When that happens, partnerships tend to fail.
You Get All the Fame
When you do something good, you are not a nameless associate that works at Person, Person, and Dead Person. You are just you, attorney at Your Firm. It’s pretty cool to get all the fame for doing good work.
The flip side, of course, is that if you get the fame, you also get the blame. When the name of a law firm becomes toxic, the individual attorneys can usually still escape the notoriety. When your firm in your name that is only you implodes, your name and reputation may implode with it.
The Benefits of Forming a Partnership
You Are a Collaborator, Not a Lone Wolf
If you like to talk to another person before making a decision, forming a partnership is a good move for you. You can still bounce ideas off people as a solo attorney, but there is a big difference between bouncing an idea and both of you having skin in the game. Two attorneys that have a stake in the outcome can put their heads together and work through a problem. That combined brainpower can be incredibly powerful.
Ideally, your partner will be the type of person that is compatible with you, but not the exact same type of person as you. You each need to bring something different to the table for collaboration to be effective. For example, if you both really want to run a business, but have no experience doing so, that will be a poor combination.
Two Sources of Equity and Two Income Streams
Having two sources of initial equity can help make paying those early bills much easier. You can afford a bigger office with two attorneys–perhaps a space that allows you to rent an extra room to a solo attorney. You can probably spend more on advertising. You may even be able to afford to hire an assistant.
And two income streams, especially if they come from different areas of law, is fantastic. If one person does high risk/high reward contingency cases, and the other attorney handles more “cash-flow” cases like family law or estate planning, that can be a great financial combination. The general practitioner keeps the lights on, and the contingency lawyer lands the big whales a couple of times a year.
Sharing Risks Generally Helps Avoid Them
With two attorneys, there is an increased ability to catch problems. You may spot one issue, and your partner may spot another one. Even better, your partner may find something that you missed entirely.
When both of your livelihoods depend on each other, you will do a great job of watching each other’s backs. Sometimes, you may not do the best job of watching your own, but you have your partner for when you slip up.
Having a partner also helps in analyzing and justifying certain risks. You may freak out over a potential concern, but your combined brainpower allows you to form a practical and reasonable solution.
Figure out What Works Best for You
There is no overall best or correct answer to this issue. It depends on a variety of factors related to personalities, skills, and economics. However, if your main interest in forming a partnership is simply because you are too scared to run a solo practice, that is a recipe for disaster. Conversely, if your aversion to forming a partnership is the possibility of sharing fees or worrying about someone’s else’s work product, then perhaps you have not found the right partner.
One way to try and test the waters would be to co-counsel with your potential partner and see how it works. Working on one case is not the same as co-owning a business, but it will give you lots of insights into how that person practices law and how they handle the business side of things. Most importantly, it is much easier to simply back away after one case compared to dissolving a partnership.