With few firms hiring, is small law the alternative?
Last month, The New York Times looked at the issue of law school debts and low hiring rates among Big Law firms. The fact that many students struggle financially after graduation wasn’t breaking news. But, the article did highlight the fact that many grads—particularly those from “lower-tier” schools—have decided to strike out on their own, rather than wait for Big Law jobs to materialize out of thin air.
Weathering the hiring squeeze
While law firm hiring rates appear to be in recovery since the recession, large firms still struggle as they chase shrinking profit margins. More and more they are turning to technology and process improvement rather than draw and train from new talent pools.
The lion’s share of legal work in the U.S. continues to be handled by solo and small firm practitioners. And, as more law school grads enter the job market—saddled with incredible debt and limited employment opportunities—striking out on their own is fast becoming a default option (assuming they want to put that prohibitively expensive law degree to use). The percentage of law graduates going into solo practice continues to increase year over year, with a full third of practicing lawyers in the U.S. identifying as a solo.
Law schools, to their credit, are now offering entrepreneurship classes and practical curricula to lure enrollees and prepare grads for the likelihood that they’ll be spreading their wings and flying on their own.
Smaller May Be Better, But Not Without Challenges
Working on your own or in a small firm has its benefits, and many say they actually prefer working independently to working for a large firm. Given the right circumstances, working on your own can mean taking on a greater diversity of tasks and the freedom to do things your way. And, when it goes well, you get to reap the rewards.
Don’t be quick to confuse rewarding with easy, however. There are many aspects that make running a small or independent firm challenging. Small and independent firm lawyers often say they struggle in areas of compliance, attracting new business, and staying up to date with changes to laws and standards.
Doing it completely on your own means shouldering all the burden. Depending on the type of firm you operate, office leases, administrative staff, bar fees — these can all add up, creating monthly overhead that can cost thousands of dollars (which can make it difficult to stay ahead on repaying loans). You can read every book on how to start your own firm, but it takes time to build up the type of experience that will earn consistent and ongoing success.
Tips for Going it Alone
Thinking of going it alone? Successful independent lawyers cite the use of technology, marketing, networking, and doing good work as the keys to longevity. Though, planning is one thing; execution is another matter entirely. Here are a few considerations to help you in planning your own practice.
- Spend as little as possible. When you’re first starting out, your earning potential might be lower than you hoped for. Keep things simple. Consider working from a home office, or sharing space with other professionals. Spend on only the essentials (e.g. a computer, smartphone, website, and data plan).
- Build your network. Many others have done what you’re setting out to do. Get to know some people in your field who are willing to lend their time and insight. Making connections with non-industry professionals may also lead to meeting potential clients down the road.
- Build your brand online. The world is becoming more digital every day, and more people than ever before are looking online to find professional services. Make it easy for them to find you by building an online profile. This could be through your own personal website, but it should also include profiles on social networking sites like LinkedIn and Twitter. These services are free, and they offer a means to expand your reach and network directly through online circles.
- Leverage technology. What many large firms miss out on is the freedom to work anywhere, on your own terms. A tablet or smartphone allows you to be in touch with others whenever necessary. And, with the right software, you can handle emails, share documents, and read testimony — all while tracking your billable time.
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Categorized in: Business
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