The natural assumption is that you enter the legal profession (once you can finally find your training contract that is), you work hard for a small or medium sized partnership and eventually you will become a partner. Is this the right thing to wish for?
You will usually only be offered a partnership these days if you are very useful to the firm, and useful in law firm terms generally means you are very good at billing. The assumption for you is that you will earn more as a partner than you can as a salaried fee earner or partner, but is that right if you are in a small to medium sized practice?
You see, whilst you might be generating fees of £200-500,000 per annum for your firm if you are a good fee earner, your salary is probably likely to be in the region of £35-60,000 (maybe pushing £80,000 if you are very lucky). Taking partnership should provide you with a major increase in your salary, or so you would hope. After all, the idea is that as a partner you can now take the cream off the top of the milk and enjoy the fees earned by all of the other fee earners, providing you with a much larger salary than you were able to generate on your own. However, that is where the problem lies. Generally in my experience of a small to medium sized partnership, there will be some very good fee earners, some mediocre fee earners, and some dreadful fee earners. If you have been in legal practice for any length of time, you will know the dreadful fee earners. They are the ones who have always got an excuse why they are only billing £70,000 per annum. More importantly, they will have a very convincing story why they will bill so much more next year and the year after. Let me share a secret with you; they never will!
The trouble for you is that if you take partnership, you suddenly have to carry these weaker fee earners, along with the mediocre ones. Smaller partnerships of three to eight partners generally can struggle to agree on decisions to remove poorer performers. Often the poor performer was one of the partner’s trainees and the partner is very loyal to them, which is nice, but not good business sense. What’s worse, it means that the partnership that you have courted so long is suddenly not so attractive. If you are lucky, you may earn slightly more than you were earning as a partner, but that is not guaranteed. So you wanted to become a partner in a law firm, and you got what you wanted. As they say, be careful what you wish for…
So do you have another option? Yes, of course, and thankfully now you have many more options available to you. You can take your hard earned fees somewhere else and keep most of the profits, by setting up your own law firm. This way, you can earn your £200-500,000 per annum and keep all of the profit once you have paid your expenses and costs. You should earn far more than you would as a partner in a small to medium sized practice and you can control your business. I see more and more people doing this, and the advantage now is that if the thought of the administration and accounting worries you, you can either outsource it to an organisation to do it all for you, or you can join a franchise that takes care of these parts for you. So you can carry on fee earning and keep the majority of your £200-500,000 per annum all for yourself. So do you still want to be a partner in a law firm?
If you would like some information of outsourced accounting facilities, or law firm franchises, simply sign up for my marketing guide below, and when you receive it, reply to the email and I will send you some very attractive offers to help get you started nice and quickly.
Have any questions about this or any other blogs? Please “Leave A Reply” in the box below and I will reply to you.