Find out whether you meet four important criteria for starting a solo practice.
Wanting to practice solo and being ready for it can be two very different things. There are some key indicators that it’s a good time to go it alone. Rock-solid confidence in your abilities, genuine passion for making it work, and a willingness to take on the risk are three prominent ones.
Measure yourself against the following four markers to determine whether or not it’s time to make the big move.
#1: You’re not afraid of harder work and more of it.
Answer to no one, make your own hours, take a vacation whenever you like – that’s one side of the solo practice time management argument. The other includes longer hours, more responsibility, and harder work than as a corporate law firm employee.
Solo practice means a lot of work. And you probably won’t earn as much, at least not at first, as you did as an employee. That is, unless you bring along a major client.
On the upside, all of that hard work eventually generates the promised independence that comes with self-employment. You’ll immediately gain freedom from law firm politics and job security.
#2: You can handle the startup business paperwork
Unless you’ve owned a business before, you might be surprised by the volume of startup paperwork involved with opening a solo practice. If you can trust yourself to research what’s required before you hang out a shingle, you’re on the right path.
There’s a lot going on behind the scenes of a successful practice besides handling a caseload. You’ll need a business plan and have to define your legal structure, organize your tax documents, and be prepared to file regular reports.
Set up an accounting system, open bank accounts, and secure the necessary types of professional insurance coverage. You’ll need to draft policies and procedures to comply with ethics rules on managing an attorney trust account. ICLE has a law practice startup kit that can help with details like these.
#3: You’re financially stable enough to weather the unknown.
You already know that your revenue stream may be erratic for a while. You may not know just how erratic it will be. Some lawyers go through a significant drop in income in the early phases of solo practice. Assess your finances to make sure you’re prepared for this change in income.
Sacrifices are par for the course. But, if you have responsibilities requiring a certain level of income, you’ll need adequate resources to cover those obligations for at least the first year.
Plan a reasonable budget for personal and professional expenses before you make the leap. Determine what your high-side expenses are projected to be, then aim to reserve that much in the bank plus a little more.
#4: You want the freedom to drive business your own way.
The security of being an employee has the clear drawback of being subject to someone else’s rules and business sense. As a solo you will gain the freedom and ability to experiment with how to drive business, using your own instincts and research.
An entrepreneur’s mindset and drive to find what works best are vital qualities for a successful solo lawyer. Good marketing chops don’t hurt, either. If you are determined to build your practice nothing should be able to hold you back.
The pioneering spirit is what drives many lawyers to hang out a shingle and go it alone. It’s the mundane realities of operating a solo practice that have surprised those pioneers who have gone before. Success requires good timing, an incredible amount of planning, nerves of steel, and a steadfast determination to make it work no matter what.