Consultant solicitors: the benefits
There often comes a time in the life of solicitors at senior associate or salaried partner level that they have to move on. The firm goes bust. The Politics. Personality issues. The promise of equity that fails to materialise…
Traditionally, many such solicitors return to the labour market. They look for the same thing somewhere else, and perhaps hope for better luck. They tout their client following to negotiate a higher salary.
Some solicitors harbour ambitions to float their own boat. They’d prefer more control over their day to day working lives. However, setting up as a sole practitioner is risky and expensive. Funding is tricky. Clients don’t want to rely on a one man band.
One increasingly common option is for solicitors to work via a self-employed consultancy basis. This is not as a locum, but solicitors provide their services to their clients through an established law firm. It is similar to a barrister working at chambers.
The law firm takes a percentage of sums billed and collected. In return the law firm provides
- PI cover;
- Premises/meeting rooms;
- Accounts support;
- Access to legal know how/precedents.
So far as the consultant is concerned, the firm should have sufficient resources, brand and market presence to provide comfort to the consultant’s client base. Thus the consultants clients remain loyal and recommend her to new clients.
The firm may refer clients to the consultant. These clients come with non-poaching undertakings. However, the consultant is not bound by restrictive covenants for clients she introduces to the business. This is different to where a solicitor joins as an employee.
Consultants aren’t employees, so they aren’t required to behave like employees. They manage their time, and can work at home. The promise of a “genuine work life balance” is a more credible than the balance offered to employed solicitors. For an employed solicitor a “work-life balance” usually means
- Part time work;
- A strict pro-rata reduction in income;
- Home working not trusted.
Consultant solicitor downsides
Compared to being employed, the consultant has no fixed salary.
Consultant solicitor upsides
If the consultant can “wash her face” from her client base, then her earnings will probably be greater than as an employee, given the law-firms percentage take.
However, consultants should note that reputable firms want assurance that the:
- Law firms costs in engaging the consultant are covered;
- Person is competent.
So consultants should prepare a basic business plan, and have references to hand. Consultants usually set up a personal service company, for their trading activities. It’s tax effective for the consultant and the law firm.
For commercially minded solicitors, the consultant route is attractive. Besides the percentage fee split, selecting the right firm requires careful consideration and a clear idea as to exactly what is on offer.