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The Benefits Of Being A Consultant Self Employed Solicitor
An article from 2018 in the Law Gazette reported on research that showed the number of UK lawyers working on a self employed and remote basis through virtual ‘platform’ firms increased 29% to 1,035 in 2018, up from 803 in 2017. This is still a fraction of the total 140,000 or so solicitors currently practising in England and Wales, but there is nonetheless a growing technology enabled trend for lawyers to be more entrepreneurial and work for themselves as consultants of firms.
My view is that many more should be developing their law careers this way and escaping the stressful matrix of employeedom at many firms where lawyers are faced with impossible billable hours targets and an inflexible employer that makes it hard to maintain a relationship outside of work let alone balance work with family responsibilities. The exacting demands of law firms on their employed solicitors combined with the ever more limited career advancement options and the inability of remuneration to make up for the life scarifies required to keep your job means that an increasing number of practising lawyers are starting to consider the opportunity of self employment as a better way to develop their career.
Despite this there still seems to be some strange belief that being a consultant is something more suited to the old boy (or old girl) lawyer before they are put out to grass, when in reality this is something any young solicitor from around three years PQE should be seriously considering to ensure that that they develop a more enjoyable, rewarding and successful career.
Below I go into more depth and list some of the main reasons why many more lawyers should be looking to develop their careers as self-employed solicitors.
Flexibility
You can choose to work as little or as much as you like and the times during the day (or night) that you are at your desk, or working from your laptop – wherever your desk or laptop may be.
While you still have to keep your clients happy, importantly you will have more freedom to fit your work around other commitments, interests and responsibilities.
Clients
Although you might be a little less choosy at the start, ultimately you will be able to decide what clients you work for and also how you meet their requirements.
No longer will you be forced to take on difficult customers and have to struggle to meet unrealistic expectations and impossible deadlines. You can also build a much better relationship with your clients as you will be free from the pressures of high billing targets and will be able to decide yourself how best to handle their matters.
You will also own your own client base and be able to directly benefit as you grow this. As an employee you can’t legally own a client database and even if they follow you when you join another firm no doubt there will be onerous restrictive covenants to contend with.
Creativity
As an entrepreneur you can enjoy exploring and developing your creative side as you build your own brand and business. By way of example, it doesn’t really cost anything other than your own time to create an effective website that will become your own valuable asset as you learn to generate and convert more and more leads from the content you publish.
Everything you do will be about creating your own brand and you will be able to become a much more impactful and influential lawyer and person than if you remain hindered by a bureaucratic and controlling employer.
Tax
Being self-employed you can deduct certain costs when you’re calculating your tax liability. Not only will you no longer have the expense of commuting, but when you do have to travel for work (including overseas business development trips) your train, petrol and flight tickets can be put on the company card as business expenses.
If you’re working from a home office then you can also deduct a proportion of your rent (or mortgage payments) and utility bills as business expenses.
If you incorporate you will be able to pay yourself in dividends which attract a lower rate of tax than salary payments. You also won’t have PAYE deductions made in the form of higher rates of income tax, employer and employee national insurance contributions, while you might prefer not to have pension payments deducted and instead invest your own money more productively yourself.
More income
If you are an assistant solicitor dissatisfied with a low salary then it is not unrealistic that you will earn more in your first year of trading as a self-employed solicitor.
If you have the kind of clients that will follow you and continue to instruct you on large high end billing matters then it is likely that you will earn considerably more as a consultant solicitor given that you will forgo a salary in return for retaining 60 to 80% (depending on the virtual firm) of your paid invoices where the work you do relates to your own client you have introduced to the firm.
Despite not working for the initial two months of my first annual accounting period and then for the rest of the year spending a lot of time on marketing activities to generate more work, I ended up earning more in my first year of self-employment than in my last year as an employed solicitor – which admittedly was low for my PQE at the time as I had chosen to join a small firm I thought I could grow with as opposed to seeking a big salary and the pressures that go with that. This then increased by 60% in my second year of trading before I found that it increased a bit but then plateaued in my third and fourth years before I eventually took out an office space near me and started to employ people directly. Regardless, a couple of years after going self-employed I had moved out of London and was earning more than any law firm in Sussex (where I now live) could offer as a salary.
Bear in mind also that I started with no clients that followed me from any previous employer and I had to build my own work pipeline from startups and small businesses. From the start of the third year onwards I probably spent at least half of my time referring new work opportunities (including those matching my experience) to other solicitors as by then it became a regular experience to reach over capacity as a solo self-employed solicitor.
If you want to grow your businesses as a consultant of a virtual firm, given my experience I recommend you find and move into a small office as soon as possible which will then allow you to employ a paralegal. Before you do this I also recommend you start to work with a good virtual assistant and another self-employed lawyer who can provide some support on a white label basis. You can also hire a solicitor indirectly whereby they will need to be employed by the regulated virtual firm you contract through who you will in turn need to pay the solicitor’s salary to in advance each month.
Depending on how high your overheads are, by the time you consistently and comfortably generate a turnover above £10,000 a month in my opinion that’s when it will make more financial and practical sense for a self-employed solicitor to start their own firm authorised and regulated by the SRA.
No commuting
Whether working in the City or regionally, employees spend hours of lost time each week enduring an often unpleasant commute every day to get to work and then back home again.
By becoming self employed and working from a home office, or your own business premises a few minutes walk or drive away, you can instantly gain many more hours a week so that you can become a more productive solicitor able to bill more time, or chose to spend those gained hours doing other things outside of work.
Better equipment
I was always frustrated at the tools that were provided to me by my previous employers. Once at what was then one of the UK’s leading firms (now subsumed into a US giant) I had an exceptionally ancient and slow PC that pretty much prevented me from doing my job and it proved impossible to get a simple upgrade authorised. I remember it would take at least 20 minutes each morning just for the computer to load and become operational. Even when I offered to buy my own equipment I was refused permission to bring it to work. I eventually lost that job, one of the reasons given being ‘my’ slowness.
Being self-employed you will no longer have the problem of trying to do your job with substandard tech and equipment. Once liberated from employment it’s not hard or expensive to soon have a better set up and tools than even the biggest law firms.
Simple changes like having two monitors, a new and fast PC, engaging very useful but affordable outsourced IT support, using dictation software, a bigger desk and more comfortable chair all contribute to making you a much more effective and efficient, as well as happier, lawyer.
No politics or discrimination
A lot of law firms are very oppressive environments and can be rife with office politics which no matter how much you try to stay out of can make your life miserable.
For a multitude of different reasons your face may not fit and as a result you may be fed up of suffering subtle and sometimes more overt forms of prejudice. As a self employed solicitor you are free to focus your time on developing relationships with other solicitors and clients, no matter where they may be, who you feel are more attuned to your way of thinking and appreciate working with you.
No longer will your career be harmed by the arbitrary and possibly malevolent decisions of others not concerned with your best interests. I remember as a trainee being condemned to a graveyard third seat during my training contract, partly because graduate recruitment told me that as a good humoured person I would be able to get on better with a problematic fearsome partner who had a habit of causing arguments and falling out with people, instead of the more sensitive trainees in our intake who were more effective at lobbying HR and ensuring they got what they wanted. Later on at the end of 2008 when the firm I was with lost its main client at the time in the banking crash (an Icelandic bank that disappeared overnight) I was one of the associate solicitors picked to move on, partly because one partner always felt aggrieved that I had a somewhat tenuous and irrelevant connection to the senior partner and also because I would leave ‘early’ at around midnight rather than quite have the stamina or desire as some of the others to do regularly crazy hours.
More security
As an employee you are dependent on your employer. Through no fault of your own it is very likely that at least once in your career you will lose your job. Increasingly it is not uncommon for lawyers to have to find new employers several times in their working lifetime. This will often involve having to move to a completely new region or country, making it difficult to feel settled and secure.
As a self employed lawyer you will have the security of owning and building your own client client base and will never have to worry about having to move for work again.
No dress code
Whether you’ll be mostly working from home or somewhere in your nearest town or village, no longer will you have to wear a suit to work every day, or make any effort to look presentable (unless you happen to have a meeting one day).
Being self-employed I’ve always opted to save the time and bother of shaving and ironing a shirt every day. Instead I’ve found it more comfortable and productive to work in shorts and t-shirts most of the year.
Infinite holidays
Being self-employed means you can take as much time off as you like and you don’t need to worry about being restricted to the usual 20-25 paid holidays a year given by most employers. Obviously, being self-employed the more time you take off, the less you’ll earn. But if you value quality of life over your bank balance, self-employment is an attractive option.
I have to admit though that I’ve rarely taken more time off than 20/25 days a year since I’ve been self-employed. However, I feel this is more to do with the enjoyment, if not addiction, of building your own business, plus the compensation of being able to take a few hours off here and there during the working week so as to manage other commitments and interests. I did though once take five weeks off in a row to go travelling, as well as being absent for most of a two month period when my father was terminally ill, although it was a pain to lose clients over those periods and then to get business going again after I returned to work full time.
Better health
Being self-employed will mean on balance you have a less stressful existence, while you can also fit in more time to go to the gym or even hire a personal trainer and be at, or closer to, home so as to prepare more nutritious food instead of late night al desko pizzas in the office (well, that was my experience in the City).
Until you start employing people and having to share your office space again, as a self-employed solicitor you will be free from co-workers spreading their germs and no longer will you be faced with the constant struggle to give in to temptation by devouring all the cakes and other goodies that are brought in for people’s birthdays and other celebrations (again, that was my experience and others may be able to more easily resist this).
By being in control of how and when you work, how you do the work and who you work for, self employment consultant solicitors generally experience improved mental health and an uplifting sense of empowerment that has a positive knock on effect on your general health and well-being.
Being self-employed means you can also be geographically independent and escape the societal breakdown, gangs and stabbings, depressingly outrageous property prices and carcinogenic pollution that blackens your nostrils that all seem to manifest themselves in big cities.
Personal development
Working on a self employed basis and becoming an entrepreneur will greatly increase your skill set and self-confidence. No longer will you be someone who just follows internal orders at work each day, instead you will be responsible for making a wide range of decisions and as a result will feel more empowered and better able to take on all of life’s challenges.
Career progression
Climbing the greasy corporate career pole can be a drawn out and frustrating process. Increasingly it seems that the carrots are dangled ever further in front of employees. When someone is finally promoted to partnership after years of service, very often the new name badge doesn’t come with any real increase in influence, while in a worst case scenario you might find yourself having to put money into the firm while in return being responsible for a sinking ship.
As a freelancer, there is nobody to hold you back and from day one there is the opportunity to significantly grow your own business. Particularly once you start to hire people and then graduate to running your own regulated firm.
Less bureaucracy
The bigger the law firm the more obstacles there are that stand in your way of being able to do your job and serve clients.
As a self employed solicitor you can free yourself from overly complex and slow IT systems, unwieldy support departments and an unmanageable number of firm and department wide emails so that you can better focus on doing fee generating client work, and more meaningful marketing activities, so as to better grow your own practice and income.
Geographic independence
Yes, if you really wanted to you could catch up on emails and mark up a document while you sit by the beach, or even work over a coffee in a café. There’s also the option of hanging out and networking with other business owners (and potential clients and referrers) by having a co-working space membership. All you need is a computer, phone and internet connection and you can work pretty much anywhere. I even managed to generate about £5k in referral fees by sending work to other self-employed solicitors with an iPhone and Indian sim card while taking my turn to sit in the back of the auto-rickshaw that me and my then 18 year old nephew were driving from south to north India at the start of 2017.
Being employed invariably means that you will need to rent or buy a property in an urban area, or within easy commuting distance from one. Your choice of where you live is therefore restricted and likely to be expensive because you will be stuck competing with a lot of other employees in the same position. In London this could well mean living for years in rented accommodation without being able to afford to buy, even if you are on a market rate salary as a City solicitor. If you do have enough capital to put a deposit down this will often mean you can still only afford to buy an overpriced one bedroom flat in a not particularly pleasant area of London. Being able to live in a detached spacious house with a garden in a crime free civilised community becomes an impossible dream.
If you choose to grow your own brand and client base as a self employed solicitor you can pretty much be geographically independent from day one and therefore able to not only live in a much nicer environment, but to also much more easily rent or buy a sizeable home outside of the UK’s main population centres. I chose to base myself in Haywards Heath in Mid Sussex, partly because its easy to get up to London if needed, however there are probably less than a handful of occasions a year when there is a direct benefit or need for me to go there and most of our clients (even the ones I’ve worked with for several years now) we’ve never met in person. I even know someone who has a firm in ‘Chancery Lane’ but who mostly lives and works in Sri Lanka.
Being able to take advantage of such geographic independence will significantly increase the quality of your life as you escape the high living costs, property rents and prices, congestion, commuting hell, crime, unhealthy environment, pollution and general misery associated with having to work and live in a large city every day.
Any questions or points I might have missed? It would be great to hear from you in the comments section below.
Also, as a final note, we now run our own hybrid ‘bricks and mortar’ and virtual SRA regulated firm and are looking to increase the number of self-employed solicitors we contract with. If you are interested in working with us on this basis it would be great to hear from you, in the first instance by email to our wewillhelp@jonathanlea.net address.
Further reading:
Become A Self-Employed Solicitor
Consultant testimonial:
This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited 2023.