If you have decided that working for someone else is not for you and it is now time to go it alone, the pressing question you have now is no doubt “Should I set up my own law firm or become a consultant solicitor for someone else’s law firm?”
I have some points for you to consider.
I am Nick Jervis. Until 2003 I was a solicitor with a passion for marketing. Since 2003 I have been a full time marketing consultant with a passion for making my clients telephones’ ring more.
I have worked with dozens of start up law firms and also dozens of start up consultants, so I know both options incredibly well.
Ultimately, whether you decide to start your own law firm or to become a consultant solicitor, you will probably have two overriding objectives behind this decision:
- You want to set your daily agenda and work from wherever you choose to; and
- You would like to keep a larger share of the work that you bill.
Both of these objectives can be met whether you decide to start up your own law firm or become a consultant solicitor.
Isn’t Starting Your Own Law Firm Much Harder Than Becoming A Consultant Solicitor?
If you are starting your own law firm, you have all sorts of issues to consider which you do not have to worry about if you become a consultant solicitor, including:
- Compliance issues.
- Book keeping and billing.
Yes, at first, it seems that setting up your own law firm is a lot harder than becoming a consultant solicitor, but when you consider the next part, the only part that really matters, getting clients and making money, I do not see being a consultant solicitor as the easy option.
This is especially so as the parts mentioned above of compliance, book keeping, marketing and administration can ALL be outsourced with very little effort on your part, and the cost of outsourcing them is going to be far less than the amount you are going to have to give away to obtain these services from your Consultancy firm.
When you add to this the next part; how are you going to get clients, I believe the decision firmly starts to move towards the starting your own law firm one.
Getting Clients And Making Money As A Consultant Solicitor
Think about this for a moment.
If you start your own law firm, you keep 100% of the billing less your expenses. For a sole practitioner, these costs can be as low as 10% of your turnover if you outsource efficiently.
However, if you are a consultant solicitor, it is likely that you are giving away as much as 30% of your billing. Whilst this might seem like a great option because it takes away all of the pain of managing your own law firm, it hampers you when it comes to winning new clients.
I am regularly approached by consultant solicitors because they do not have any clients coming to them. Very few of the consultancy law firms provide leads to their consultants despite what the prospectus may say (I know this from a lot of experience).
Therefore, you have to undertake marketing to generate your own clients.
However, you will be competing in that marketing space with sole practitioners, and the battle is far from even, as you can see below.
Let’s say that each new client is worth £1,000 to keep the maths simple.
You undertake your marketing and the financials look like this:
- You spend £500 to land one client worth £1,000.
- You bill the £1,000 and pay £300 to your consultancy firm.
- You keep £200.
Now look at the maths for a sole practitioner:
- You spend £500 to land one client worth £1,000.
- You bill the £1,000 and pay £100 towards overheads.
- You keep £400.
In this example the sole practitioner makes double the profit that the consultant solicitor makes, but that is before you consider the next point.
How Consultants Can Attract Clients Compared To Start Up Law Firms
When you start up your law firm or consultancy practice, the first clients are always likely to come from your old contacts list.
What happens when you want to scale your business to the next level?
First, you need to consider the different types of marketing.
Attraction marketing – clients who are looking for your legal services start a search for you, find your website and give you a call (easy and cost effective marketing).
Interruption marketing – people who are doing something other than looking for legal service providers (eg browsing a newspaper, facebook or listening to the radio) hear or see your advertisement, but as they have no need for your services they do not get in touch.
Attraction marketing wins every time, but when it comes to the best form of attraction marketing, a legal website, often a consultant solicitor is simply not allowed to have one.
The sole practitioner wins again. He or she has a website which targets what they do and the geographic area they serve, and either with organic traffic or paid search, people find it who are looking for their services and immediately get in touch.
Should You Set Up Your Own Law Firm Or Become A Consultant Solicitor?
I spend my entire life promoting legal services and one of the best forms of marketing for solicitors is a website. Consultant solicitors are usually not allowed one.
When you add to this the fact that sole practitioners will keep more of their turnover than a consultant solicitor, you see that my belief is that you are better off starting your own law firm, particularly when you can outsource all of the parts of the job that a consultancy firm would take care of for you.
What do you think?
This is only my opinion and you have to make your own decision, so I have some resources available for you to help you to do this.
Starting A Law Firm Checklist
If you want to investigate starting a law firm further, click the button below to receive my starting a law firm checklist, and also to discover more about outsourced compliance and bookkeeping services, plus how to obtain the perfect website for your new firm.
The resources included could save you a considerable amount of time and money, yet the guide is completely free to download.
Starting A Consultancy Role
If you are considering becoming a consultancy solicitor, download my complete guide, including a range of current consultancy solicitor positions available, plus how to attract clients consistently to your consultancy business, by clicking the button below: