How to be independent
With reports of record numbers of solicitors taking the plunge as freelance consultants within a virtual firm, what motivates them? And how do they survive the first year without the safety net of a salary?
There is no doubt that being one’s own boss, choosing the legal work one really wants to do, and managing one’s own working hours all have their appeal. More time with the family and no drop in salary? What’s not to like?
Certainly these are top of the list of reasons why solicitors are increasingly leaving established positions within traditional firms and taking the plunge as freelance solicitors within virtual firms. Who could argue against keeping a much larger share of billable hours and saying farewell to office politics?
But one issue often stymies many solicitors’ ambitions before they even begin: money. Specifically, how will they survive the first year, even two, without the cushion of that big firm salary landing in the bank account each month? How have solicitors who have turned their backs on partnerships and monthly salaries survived through the initial start-up as a freelance?
The truth is that many independent solicitors have partners whose salaries can be relied on to get them both, and their families, over the initial hump. If the household income drops for a while it is forecast to rise again once earnings from the independent practice roll in. Other solicitors are taking a very creative approach to the issue. Some have a second or even third income stream, a ‘portfolio career’, if you will.
WIP turns to gold
Terence Channer is perhaps one of the boldest solicitors to go freelance: he sold his house to bridge the funding gap when he joined Scott-Moncrieff. ‘There is a premium on the freedom we have to manage our work and it’s hard to put a value on that,’ says Channer. ‘Yes, it can be scary, and yes, I did sell my house to fund my career, but I didn’t have a partner with an income to soften the blow and I knew I needed greater freedom, especially away from office politics.’
Channer, who specialises in actions against the police, was disenchanted with life as a partner in a traditional firm and he felt that Scott-Moncrieff’s way of working suited him. ‘I had savings, plus the proceeds of the house sale, so I knew I would be okay while waiting for fee payments to start coming in. But once they did start, it was well worth it,’ he says. ‘My first two years was purely WIP, but I was doing the work I loved, working the hours I wanted, and – importantly – keeping a full 70 per cent of my billed income from day one.’
As with many independent lawyers, Channer set his own minimum income level and built his hours around that. As he says: ‘You’ve got to have the courage of your convictions as, in my experience, WIP turns to gold.’
A second income helps
Michael Turner, an ex-Alexander Harris litigator, is now specialising in personal injury and clinical and professional negligence at Scott-Moncrieff. He limits his working hours as it suits his income needs, but always retains a number of income streams to fund his first year or so with the virtual firm.
‘I have two part-time judicial roles and I have maintained other consulting and training interests and that really helped soften the plunge into becoming a freelance,’ he says. ‘However, I also took out a small bank loan to fund my initial disbursements at Scott-Moncrieff as they figure pretty highly in my work. I am perhaps different to others who’ve gone independent as I don’t have all my eggs in one basket, but I would never discourage anyone from the freedom to build one’s own portfolio career. It really works for me.’
Turner conducts a mix of private client and no win, no fee work and says he does not need a huge back office, so his overheads are very low. On top of this, and just like Channer, from the moment he entered Scott-Moncrieff he earned a full 70 per cent of his billable fees, something that is still unusual among virtual firms.
‘Obviously, with any kind of litigation, there is the impetus to only back the winners, especially as one’s income relies directly on the victory,’ says Turner. ‘I also began by working on quick wins, going for low-hanging fruit that would pay a bit more quickly. However, that approach is the norm for the entire sector anyway, so I just work in the same way as others, but I get to keep 70 per cent of all I charge.
‘I do strongly advise people to look at going independent because, in my experience, the rewards far outweigh the concerns, but I would always remember that I am a business owner, not just a solicitor, and being a Scott-Moncrieff consultant is not a job. This means I rely on Scott-Moncrieff for the back-office services my previous firms have provided, including marketing. One has to approach this with a business owner’s sensibility.’
Mouldy partnership carrot
‘We have definitely noticed a rise in the numbers of lawyers looking to go freelance and this has accelerated recently, partly driven by mergers,’ says Rachel Brushfield, a talent liberator, career strategist, and coach at Energise, who helps lawyers re-evaluate their career for more fulfillment and flexibility.
‘Many lawyers in private practice work long hours and will never see even half of the fees they generate. This is being realised by solicitors earlier in their careers. For example, we recently worked with a highly educated, well-qualified 25-year-old fee earner who chose to take a step back from their steep career trajectory to evaluate their strategy. They’ve chosen to leave private practice and are considering going freelance and perhaps for a portfolio career.’
Brushfield says that many lawyers returning to the profession – ‘returners’ – are finding they cannot obtain the flexibility they require within their firm to balance their professional and family lives. This is driving the growth in the number of professional women choosing self-employment to control their career.
‘Career independence is appealing not just to returners and those looking to take their foot off the gas,’ she says. ‘Bright young members of “Generation Edge” are also looking at the mouldy carrot of partnership and realising it is simply not appealing and too far away in the future, if it ever happens at all.
‘What enables one person to feel financially secure when becoming freelance might not suit someone else. People have different financial security thresholds, so while two years’ worth of income as a cushion might be the lower limit for some, a two-week cushion might be all that others need to persuade them to take the leap into independent working.
‘We help lawyers match their ideal career scenario against what is practicable and what they really need and want. We also help them to market themselves confidently and competently and with good self-management.’
The key is planning
Chrissie Lightfoot, the non-practising lawyer turned CEO of EntrepreneurLawyer and Robot Lawyer LISA, advises solicitors on the commercial nuances of going solo. She, too, has seen an upturn in lawyers planning their own personal exit strategy from established firms. ‘While working around half their current hours and still earning more seems idyllic, there remains the issue of funding the launch of that solo career as a consultant,’ she says. ‘The key is planning. If being an independent consultant is really where your career lies, then take your time and plan it properly.
‘It’s not unheard of for solicitors to take up to two years to plan their exit. Many have loyal clients who will choose to follow them and, if they’re planning this carefully, some will have those clients on a retainer already as a strategic business adviser or non-executive, which dovetails with their lawyerly skills but will not be in conflict with their legal adviser covenant. Most set up a limited company and pay themselves a dividend.
‘Of course, the rise of the mega-merger means that some solicitors do not have the luxury of a one or two-year ramp up to their solo career. For many who don’t have a place in the post-merger firm there are often loyal clients they’ve served who can offer work. This offers the opportunity to capitalise on their contacts and put themselves forward as an adviser, building a portfolio career for variety of work and of income.‘Inevitably, this comes down to the strength of the relationship and the solicitor’s ability to market themselves, however subtly. While this new career does not happen overnight, a calm and steady period of planning can sow the seeds for a highly rewarding and better-balanced career with a variety of work and income.’
Andy Evans is a freelance writer