Private Law Practice (and What to Know About Starting Your Own)

When embarking on a legal career, one of your first decisions will likely be very consequential—whether or not to go into private practice. 

The work lives of attorneys at private law practices tend to differ greatly from those working in-house or in the public sector. 

The question is whether private practice will be the right fit for you. 

In this article, we explore what a private law practice is, as well as the nature of these firms. Then we review some tips for those looking to make the leap and start their own private practice.

The term “private practice” also marks a distinction from in-house counsel, who work for companies that are not primarily engaged in the practice of law. Any large corporation will have an in-house legal team, but many smaller companies also have in-house lawyers.

What does a private practice law firm look like? 

While the vast majority of lawyers work in private practice, the experience of a private practice attorney varies widely from firm to firm. There is no universal method of describing private practice firms, but we can see some tendencies based on different types of firms.

One highly significant factor is firm size. At the largest firms with multiple offices, commonly known as Big Law firms, intense work schedules and high billable hour quotas come along with high starting salaries and substantial prestige. 

Small and mid-sized firms may offer better work-life balances, along with the potential to match or exceed Big Law incomes in the long run. 

Another consideration is the opportunity for advancement within the firm. A firm’s partnership structure is a key element here. The traditional partnership structure elevates senior attorneys from within the firm to the level of partner, giving them ownership rights, shares of the firm’s profits, and the ability to participate in the firm’s decision-making.

There are other possible partnership structures in private practice. A two-tier partnership structure consists of equity and non-equity partners. 

While equity partners are akin to traditional partners, non-equity partners do not have any ownership interest but enjoy the greater prestige of the “partner” label and may have some decision-making input. 

Partners may also be designated as senior or managing partners, who may have additional management or strategic responsibilities within the firm.

Despite these generalizations, do not assume you will know what a firm is like based solely on its size or partnership structure. Any size firm can demand excessive hours and have a toxic work culture, while others could fit your personality and work style quite well.

For more information, learn what it’s really like to work at a law firm. 

How much do private practice lawyers make? 

Most lawyers work in private practice, and one of the primary reasons is easy to understand — private practice lawyers are generally more highly compensated than public sector attorneys. 

According to U.S. Bureau of Labor statistics, the national average wage for attorneys is over $163,000, but that average varies widely by industry. While those lawyers working in legal services average over $166,000, attorneys working for local, state, or federal government receive average wages ranging from $103,000 to $152,000. 

Wages will also vary widely depending on whether or not you are a partner at your firm, as well as the firm’s ownership structure.

Given the opportunity for higher compensation, many lawyers decide to strike out on their own in private practice. What do these entrepreneurial attorneys need to know?

4 tips for starting your own private law practice

Starting a private law practice can be extremely rewarding for many attorneys—on both monetary and emotional levels. However, it is best to remember that starting a firm is no walk in the park. Now you will not just be a lawyer, but also a business owner. To that end, it is important to ensure you have a solid game plan in place for your new practice.

Create a comprehensive business plan 

The first order of business is to have a plan—specifically, a comprehensive business plan for your private practice. This plan will include your long-term goals and strategy for business development. In addition, you will need a law firm budget that incorporates estimated expenses and projected revenue.

Your business development strategy should be about growing your firm and paving the way for long-term success. One aspect of this is building strong relationships with your existing clients, as they will likely be the source of continued business and referrals to other clients.

In addition, networking with other attorneys and potential clients can be an excellent source of revenue. Take steps to actively seek referrals and positive client reviews, as opposed to simply hoping these will come to you effortlessly.

Consider your budget

Although budgeting is essential for any small business, it is often overlooked at new law firms. Don’t be guilty of this offense—start with creating a budget for your new practice.

Project your expenses by including such essentials as office space (unless your office will be virtual), hardware, software, and malpractice coverage. Then project your revenue based on your billing rates, client base, and revenue streams.

Also commit to keeping track of your revenue and expenses, so that course corrections can be undertaken when needed. The unfortunate truth is that many attorneys do not follow this advice.

In Clio’s 2021 Legal Trends Report, it was found that 40% of lawyers are only somewhat confident of their revenue and expense figures, while 20% were slightly or not at all confident.

Clearly, budgeting awareness is a weak link for many legal practitioners.

Commit to regularly tracking your firm’s revenues and expenses from an early stage. Use any digital tools that will help in this regard, including solutions such as QuickBooks Online, so that your firm can remain financially healthy.

Market your services

Marketing is essential for any law firm, but especially so for new firms. The form of marketing will vary from firm to firm.

For example, will you be focused on retention of your existing clients, or will you cast a wider net to attract new clients? When seeking out new clients, first determine your target market—the types of clients you want to attract. Then select your marketing channels, such as digital marketing, sponsorships, or event attendance. 

Your digital marketing can also take the form of social media ads, marketing emails, or blog articles. Learn more via our digital marketing hub.

Your firm’s budget will also inform marketing considerations.

For example, are you allocating any projected expenses to marketing efforts, or will you be focusing on networking and word of mouth? This is one major reason to have your budget squared away first.

Provide exceptional service

It is one thing to get clients—it is quite another to keep those clients coming back. Not only that, your goal should be for existing clients to give you referrals at a relatively steady clip. This is why your firm must focus on providing exceptional legal services.

To create an exceptional client service, strive to become a client-centered law firm.

The client-centered practice places the impact on clients and their experience as the primary consideration in any major decision. This means making clients’ lives easier in as many ways as possible, in ways that make it easier for the firm to operate on the back end..

Clio can help your practice center its focus on positive client experiences. With Clio Payments, for instance, clients can easily pay their bills online while your firm streamlines its collection process.

Meanwhile, Clio for Clients is a legal client portal that allows clients to securely communicate with their attorneys and access case documents, while minimizing the back-and-forth communications required of you.

When searching for legal technology solutions, new firms should look into software options that cover a variety of needs and integrate well with other platforms.

According to solo attorney Brad Avakian, Clio has made all the difference:

I would have never been able to launch my own solo practice without Clio,” says Brad. “It has been the #1 thing that has made it possible for me to finally take the leap.

Final notes on private law practice

A legal career in a private law practice can be a rewarding one. Your personal experience will vary depending on the firm’s size, its partnership structure, and whether it is a cultural fit for you. If you decide to start your own private law practice, be sure to have your ducks in a row with regard to planning, budgeting, marketing, and providing excellent client services.

For an overview of considerations for starting your own practice, as well as relevant insights and advice, check out Clio’s Guide to Starting a Law Firm. 

 

We published this blog post in June 2023. Last updated: June 21, 2023.

Categorized in: Business