Self-employment is on the rise for the legal profession and the experiences many of us had during Covid has accelerated that trend.  Self-Employment offers flexibility just not possible in an employed role.   This allows many who would struggle to take a traditional full time role, the opportunity to earn just as much whilst fitting with their family, and other, commitments. 

  Typically an employed solicitor will need to produce annual client billing of 4 times their salary, either as a hard target or a soft performance related target.   Thus taking home roughly 25% of their actual client billing.

A self-employed solicitor will typically earn anywhere from 50% upwards of client billing - a significant difference.

So why don't more people make the move?

Primarily the fear of failure.  They see stats such as 1 in 5 new businesses and self-employed persons, fail in the first year of trading.  Uncertainty vs the certainty of a regular wage.

There are however some simple steps that can be taken to maximise the chance of success and minimise the risks of failure.

1. Decide what your ideal role looks like - sounds simple but do you want to work 9-5, or around school times, or ad hoc?  Are you happy to work evenings, weekends, holidays?
2. Do your homework - talk to people who have already made the leap, this will help to manage your expectations. Some people think that being self employed means working less hours, for many the opposite is often true but they do have the flexibility of when to work those hours.
3. Examine your existing contract for any restraint of trade clauses!
4. Do you want to be a sole practitioner/free lancer or a consultant? Do you understand the pros and cons of each?
5. Consider the area of law you want to practice in, what does the cash flow look like? Is it a large number of matters for small payments or a small number of matters for large payments? Are these cases typically paid for as you go along or at the end?
6. Look at you expenditure and draw up a spreadsheet - How much income do you need to pay your bills?  what can you realistically do without? Are those bills likely to increase? What extra expenditure will you have due to becoming self-employed?
7. Build up savings!  You might get lucky and have a stream of clients from day 1 but most self-employed people need up to 6 months to establish a regular income stream.  Having at least 3 months worth of bills saved will provide you with a buffer.
8. What is your network?  Do you have a number of existing loyal clients who will follow you?  Do you know other professionals who might introduce clients to you? Do you have a network of family and friends who could be potential clients or refer people to you? If you don't have a large network how will you obtain clients? What sort of timeframe will that take? How much will it cost?
9. Save for tax and, if registered, for VAT straight away. Nothing kills a business faster than a massive tax bill you can't pay.
10. Get a good accountant from day 1 - as well as helping with point 9, this will not only save you time but also potentially a lot of money!

All of these points should feed into a Business Plan.  This will take some time to draw up but will dramatically increase the chances of you succeeding.

The team at Wildcat Law have extensive experience in this area.  We are always happy to speak to lawyers, no strings attached, who are looking to make the move to become self-employed.