This has been a fascinating thread to read. I am even more impressed at the depth and variety of experience of the people that this forum attracts. Best wishes to all of you as you take your next steps in the working world.
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There is, as we say, a spectrum, I think you are right as to the type of firm @ximacloudx worked for and now how grueling they can be on this side of the pond and frankly how unfair on their employees who are caught very often in the ‘one day a partnership’ loop. A lot of women and others do a lot of ‘free’ work internally too: which is something that was not mentioned or maybe not even realized by the poster. Then they get the slap of ‘not enough billable’; this includes support work with clients and so on.
Academics, Medics and other professions have similar dynamics now though the outright “Law Factory” LLC status of some law firms has not yet been quite reached, well formally anyway?
I do a fair amount of executive coaching in my practice. Have you take any work-traits assessments to see if being an entrepreneur is a fit for how you like to work? I think a lot of people go that route not realizing just how much “running the business” is required of a solo practice. If you don’t enjoy that part at all (or find it stressful, etc.), you may just want to find a firm with more modern ideas and practices.
That’s my 2 cents. I doubt it’s worth that much. 
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She was in a firm with ‘modern ideas and practices’ as far as I can see 
only kiddin’
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This is an often used term, to explain a lot of things, but what risk do they really carry, after all?!
If the company runs down the river, they lose their job, and income.
But this is (at least) the same for everybody else in the company.
The real differences are, the partner earn a way higher income before, and could probably stay without a job for a longer time, they are likelier to get a new job, and they are the last to lose the job.
So, from my point of view, the “risk” is not a valid point in that comparison.
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We’ll agree to disagree. Owning a business is much harder than just working in a business. It’s not for everyone.
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I do estate planning, trusts, and estate administration. While most of the estate planning work is flat fee, I still need to put my time in for it, so there’s no benefit to my efficiency except having to ask for more and more cases from partners to meet my billing requirement. This is one area that I think being a solo would help - there’s an incentive to me getting work done more quickly, and I can charge prices that are more reasonable for the work product than the flat fee requested of my larger firm.
Estate administration has to be billable hours in my jurisdiction for fee approval, but even then it’s one of those areas where I want to feel good about what I bill. No one at my firm does it, but I’ve seen attorneys bill .2 at $300/hr for a document where all you do is fill in the decedent’s name. I don’t want to feel the need to quadruple-check filled in forms just to make sure I meet my billables for that day.
The other benefit of my practice is, for the most part, there’s no big sense of urgency - aside from someone bringing a breach of fiduciary claim against one of my executors, there are no surprises, normally no opposing counsel. Even if I have a client who desperately and immediately needs their estate plan done because they’re on their death bed, it’s only a few hours of drafting. The question will be getting the clients and sustaining the business.
in response to both David and @Stephen_C for support/holiday considerations. At least at my current job the culture isn’t big on three month sabbaticals - I have bosses who will email you at 1 a.m. from their vacation, and it was the same at my last job too. I’m just not sure the US firm culture is hip to the idea of reasonable workloads, and I don’t want to be the stereotypical job-hopping millennial trying to find it one
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To go beyond my pay grade here and suggest something to you I am seeing all the time now with professionals, especially in medicine. Do you think your ‘low’ billing was in turn caused by a kind of ‘moral fatigue’ as it is now called? That is the feeling that one is not allowed to do what one really should be professionally. I find again and again and it is becoming more recognized that this is now a cause of a great deal of ‘underperformance’ and behind a lot of ‘quits’. Though often folk dress it up in other ways. I certainly have done during my life and bumpy career.
You ask a broad question without I think a ‘techy’ or nerdy answer? 
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How well are you capitalized and are you going to be comfortable watching your savings drain away at $5k/month or more (it’s going to be more)? Are you the type of person that can ride out the ups and downs?
What is your plan to find and acquire clients? I’d expect thousands of dollars for SEO each month after the web site is up and running.
You migth reach out to some of your peers that have opened shop and take in their experiences. Who knows, you might even find a former lawyer in this forum that could help…
As the saying goes, it’s great to run your own business, but sometimes you work for an idiot
Best of luck to you!
Assuming your net income is $100,000 (billable minus business expenses), self employment taxes are $15,300 and federal income taxes are $14,800. That leaves you with $69,900 — not including state taxes and health insurance. I don’t know where you live nor how old you are, so I can’t estimate those.
But I do know that as a 52-year-old woman living in northern Illinois, I pay $8,526 per year for a “bronze” plan for me, which is the cheapest bracket with the highest deductible. Out of pocket limit is $7,000, deductible is $4,500 (or $15,000 for out-of-network providers). No dental, no eye coverage. You can look up the plans that are available to you; it’s dependent on your geographic location (not just state), your age, and a few health factors (like if you smoke).
Of course, all of that assumes that you will be able to get 600 billable hours per year. I wouldn’t expect that you’d be able to do that in the first year because you have no clients and because it takes a lot of time to set up a new business, especially if you’re a solo practitioner. How many months of living and business expenses do you have in liquid assets?
I would suggest hiring a financial planner to review your plans, make projections, and find all the things you haven’t considered. They can be amazingly helpful and mine gave me good peace of mind after I’d been working for myself for a few years. You may decide to go for it, or you may decide to hold off for a few years while you build up a nest egg that makes you more comfortable.
I’d also recommend that you talk to some lawyers who do similar work and are solo practitioners. They’re going to have some valuable information for you — especially local ones. Do you listen to the The Tech Savvy Lawyer? That might be a good resource.
Given the type of law you do, it seems like this is a good fit for a solo practitioner. There’s a lot of need for good estate planning, and while clients don’t need to have estate planning done yearly, they do need it regularly. And, people who have gone through the process (assuming it’s a positive experience) usually encourage their friends and family to do the same.
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You’re right, I only did the math for self employment tax and not federal taxes. That’s what I get for math-ing while on a morning walk.
I actually had ACA insurance at my job previous to this one - it was $210 a month with an $8k deductible. There theoretically would be no state taxes (I’m in Ohio which has a weird no-tax-on-first-$250k-of-business-income rule) but I would owe my city 2% in taxes also.
Between savings, after-tax investments I could easily liquidate and my severance I’ll have $24k. My mortgage is $1300 which is my only non-school debt, which is still paused for pandemic (theoretically, but even then it would be 10% of my income once it restarts). If I don’t change my lifestyle at all and have no business expenses, I have a little over six months in savings. If I cut back on all non-essential spending, I have about 10 months. The business expenses is a huge question mark because I don’t have a malpractice insurance quote yet.
I do have meetings scheduled next week with two solos that I know and one retiring attorney who does my same type of practice. I also have a friend who does the same thing who I’ve asked to do contract work for - she’s looking for an associate, but I don’t want to commit to anything. I’ve also applied for some part time remote document review jobs to at least give me some income while I figure things out.
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I agree with you. I deleted a full reply to Jezmund though as we are getting ‘political’ since the myth of the entrepreneur has a massive grip in this country and is, in my view, part of a partisan political agenda, it seems like common sense to many though.
As you say often owner take less risk than employees, they usually have a better financial cushion, often have other sources of income and revenue: often large assets from other places, employees not so much very often and it is ‘mom’s couch’ again for them.
In the days of debtors prisons the ‘risk’ argument might have had some meaning, today it has none. In fact the recent spate of bail outs to the ‘big boys’ is or should be a disgrace and amounts to welfare for the rich.
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I’m not sure what you think I’m affirming or believe, but it’s certainly not any sort of entrepreneurial myth. There’s no magic about owning and business and it doesn’t make anyone better or worse. I stand by my (somewhat informed and experienced) opinion that it’s not for everyone.
Some of the descriptions above of what it is to be a business owner are accurate of only the top 1/10th of 1% of businesses. 89% of businesses never have more than 20 employees in the entire life of the company. Most of us are putting ourselves at the back of the line, taking care of employees and vendors first, and trusting there will be enough left for us.
The world has and needs all kinds of people. Not everyone should be an entrepreneur or business owner. Some folks will do fine hanging up their own shingle. Others will be much happier in a firm. Neither is better or worse, but I simply don’t agree - across every industry I’ve ever worked with - that ownership is the obviously better choice for everyone.
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I absolutely concur. Moreover, there’s a time in life that is apposite for starting a business and a time when it’s not. Sometimes the risk is worth the reward, whether that’s monetary or simply the satisfaction of creating something or even of just doing the job you want to do; sometimes the downside is too great.
One thing I would say is that if you’re going to jump in the deep end, it’s far easier if you have someone to cover your back (sorry for the mixed metaphor). In my case it was my wife, who always had faith in me, even when it probably wasn’t justified.
The other things I’d add are never be afraid of asking for advice or help; most people I came across were flattered to be asked. Anyway what’s the worse that can happen, someone says no?
And think carefully before following the crowd. Just because “everyone’s doing it” – like trying to build a social media presence or having a swanky website – doesn’t mean it’s where your time is best invested. Try to put yourself in your potential client’s or employee’s or whatever’s shoes and ask if whatever trend you’re tempted to follow really benefits them.
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Lots of good advice in trend for OP. Won’t repeat what others are saying; only to add to consider your own situation as each of us are unique before making the decision. Was really painful and tough for me first few years but finally started to click together. Much happier now. Thank God for emotional support from family.
Consider fully and do a business plan, even if it’s short written plan. Writing down will further help you make decision one way or another. Wish you well.
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That type of work strikes me as the type of work where there can be a large potential for work as a solo or with a small firm.
I have the impression that, in the US, lots more work for smaller firms comes from referrals from other lawyers who don’t specialise in that area via things such as establishing a good reputation and networking in suburban and regional lawyer, estate agent and accountancy groups.
Since you are in this discussion board and a lawyer, you should also consider joining the Macs In Law Google listserv where there are many solo and small firm lawyers; many of them in the US.
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You can’t fail… you can only learn. “Failure” - or better trying - is the path to success.
Be your own boss! Never get sacked for not making “sales” targets as a professional anymore.
The most important lesson I learned running my own shop is to say NO. There is always more work, are always more clients, cases and … Choose wisely and say no to the rest.
The second most important lesson is to not be afraid to ask for help. People are glad to help when asked.
The third most important lesson: surround yourself with people that inspire you and vice versa. Inspiration is the best fuel for success.
Get to know your own pace, and preferences and manage your stress levels. Above all do what is fun, and gives you fulfilment and satisfaction. Leave the rest for others, there are enough lawyers around for that.
Who you should talk to? First of all yourself. Listen to that inner voice. Convince yourself you are up for it and are going to make it a success.
And … find yourself a mentor. Someone who’s been there and has done that… extends a helping hand and points in the right direction when needed.
Lastly, as soon as you can afford it, hire someone that helps free up your time to do more value-add work. Don’t get bogged down doing things that others can do better, faster and cheaper. On top of that work is more fun in a team.
Good luck! … and keep us posted
P.S. in case you need technical advise I think there is no better place than this forum
I would add, however, that having a Web presence, even if it’s just a business card site with your basic details and a contact form, is a good idea. I would further add that having some FAQs at least about the kinds of services you can offer, particularly those that people don’t realize that they might need, would be helpful. Yes, you’re giving away information for free, but it might cause someone to contact you for a fee.
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This may be particular to certain countries…
My brother is very talented in his field. When he struck out on his own, most of his clients followed him without any encouragement. But eventually, he got quite sick, not from working too hard, and had to take a lot of time off, during which he had no money coming in. That was a shock to the system.
He went back to working for someone else which meant he got sick pay and holiday pay (I did say this applies to certain countries). Less money coming in each week/month, but a lot more stable.
Now… he’s not happy working for someone else, either, but that’s just the nature of his industry lately, and working for himself would be better in some ways but not in others.
I am not going to get much deeper into what is actually a very political topic and I have edited out a longer reply and often the ‘good guys’ end up on the receiving end of my points, which I want to avoid here.
There is an entrepeneurial myth in America and indeed elsewhere now, I didn’t say you were directly or consciously propagating it, though it is hard to determine in any individual how much of it they swallow. Often these things are background assumptions and ‘common sense’.
As is the insane and taken-for-granted assumption here that health care can sensibly be tied to your work. Until you get Medicare that is which is quite good and without which the whole system would collapse overnight. Literally.
So health care is really only surviving because of Government anyway in reality. The cash benefits go to the increasingly hedge-funded and Cartelized private sector though. We, the people, pay twice in other words for what is often quite inadequate health plans in small businesses. The whole system is, literally, insane and is the main reason I find that people stay in certain jobs.
I will leave it there for now but I will add I think that even smaller businesses who really take ‘back of the line’ are few and far between, again in my quite broad experience. I don’t even mention the tax avoiders, under-the-counter and in other ways, and so on. Some industries are a lot worse than others too.
I refrain because for reasons I don’t quite understand, Apple folk, many of whom post and read here, are exceptions very often and I don’t want to grate on them with these points.
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