If you are reading this, you are most likely a lawyer or aspire to be one, so let’s start with a familiar concept: a disclaimer. Starting a sole practice is a daunting task. Before reading another sentence, let’s start with your why. Ok, now, if your why is to get rich, choose another goal and another article. If your why is freedom and autonomy over the direction of your practice, keep reading.
As you have probably heard, law students – and most of those in the legal profession for that matter – are risk-averse. The notion of giving up a steady, and potentially lucrative, paycheck can be a frightening prospect to say the least. This is probably the main reason that people preclude entrepreneurship from their life. A change of mindset is required to claim total responsibility for your work product and the advice you give to clients with minimal oversight. The buck stops with you.
As law students, we didn’t plan on building a law practice from scratch together. But, as time went on, the decision started to make a lot of sense. As we will explain, having another person with you on your debut into the professional world mitigates many of the concerns one would have when diverging from the traditional career path. Even if one has years of experience at a firm, starting a practice with another lawyer can definitely help ease the transition.
Many of the lawyers we have spoken to recommended at least 3-5 years of practice at a firm before even considering making the jump. However, others have showed us that it was possible earlier than that, and we took that challenge on. So, this is our story.
The Early Years: From 1Ls to New Minted Lawyers
We both started our legal studies at Osgoode Hall Law School and happened to be put into the same group section together.
Daniel had taken a different approach to law school than other students. Grades are a fundamental constant of law school. They dictate your chances of securing a high-paying job, and grades that are too low may jeopardise your ability to obtain any employment at all. Grades are a high stakes game as you are directly competing with your classmates to get the few available “As”. His approach was to prioritize deep learning of the law over maximizing his grades. This meant reading almost every case in class and critically engaging with the legal reasoning of the various honourable judges throughout the common law. While this put him at a competitive disadvantage, as he was not studying to maximize his exam performance, he was still able to achieve an “A” grade in some of his courses.
During law school, Antonio’s approach was to seek a golden mean: he would attempt to get good grades but knew that his network would be crucial, so he spent a lot of time developing it, while keeping sane with a good athletic routine. It didn’t always work, and he made some mistakes, but it generally served him well in hindsight. Antonio often discussed his interests in real estate law and real estate investing, where many others only had a vague idea of their career aspirations, being mostly ‘big law’ and ‘M&A’. He was also the President of the Legal Entrepreneurs Organization (LEO). LEO was the first organization of its kind in a Canadian law school. Its genesis came from a single, powerful aspiration: becoming a self-made entrepreneur in the practice of law and carving out your own destiny on your own terms. It would become a forum for entrepreneurial-minded law students to explore the path of sole-practice, the business of law, personal development, and legal innovation. For example, Antonio hosted a podcast mini-series, The Legal Entrepreneurs Podcast, where he interviewed entrepreneurial lawyers. LEO served to expand Antonio’s network to like-minded lawyers who exemplified the mindset of self-determination. LEO provided Antonio with a strong foundation for later acquiring good legal mentorship and becoming a rainmaker in our practice.
Daniel articled at Gowling WLG’s main office, working with both their business group and their intellectual property litigation group. He got to work with many large technology clients and contributed to very high stakes litigation. He had felt that his firm experience along with his breadth of business courses prepared him for private practice as a sole practitioner.
In contrast to Daniel’s experience, Antonio articled at a boutique solicitor firm, focusing on real estate, business law, and land development matters. Understanding that a boutique firm would likely provide him with greater client facing experience than the alternatives, he began gearing his articling search to smaller firms in 2L. While Daniel acquired extensive experience with things the large firms taught, like research on obscure legal topics, extensive due diligence and the use of legal technology, Antonio got to see transactions from cradle to grave.
Why did you two decide to go out on your own together?
One of the most compelling reasons was the potential for synergy. We both had experience in practice areas that partially overlapped, yet provided us with a different subset of lawyering skills. That meant that we could refer work to each other, but also collaborate on files. We could also share resources and the burden of expenses.
One of the most crucial benefits of starting a practice with another person is the financial aspect. There are a surprising amount of expenses that can be split among us. By engaging in shared marketing, for example, we directly benefit from each others’ efforts. Sharing a website splits the cost but also allows us to develop a knowledge resource collectively. In addition, having a team increases our credibility in the eyes of new clients who haven’t had a chance to work with us yet. It is far easier to justify hiring additional staff with two lawyers able to pay their salary and split their time.
We also shared some core values and life experiences, which is necessary for any business partnership to succeed. We both had walked away from our articling experiences with the same conclusion: namely, that the way traditional firms currently operate is broken. The lifestyles these firms provide didn’t work for us, and strangely enough we shared many of the same experiences articling, even though our firms significantly differed in size and practice areas.
We recognized early on that the traditional law firm model is based on treating lawyers as economic units to maximize profits. A lawyer must constantly be billing to both advance in their career and support a firm’s overhead. This results in junior lawyers being bogged down by ‘busy’ work and sacrificing their health and personal life all to earn a take-home pay that was dwarfed by the burden of long hours and six-figure law school debt.
We also came to the understanding of something we were long suspicious of: namely, the accepted formula for achieving wealth that we had been socially engineered to follow. The formula of our parents and the baby boomer generation was: go to school, get good grades, get a good job, save, save, save, and one day own your house free and clear. We concluded that this formula no longer worked, and definitely didn’t fit our life goals. Here’s why:
Twenty or thirty years ago, the first-year associate salary of $80,000- $100,000 at a large firm was extremely lucrative for someone in their mid-twenties. It would justify enduring a stressful 70-hour job, because there was a light at the end of the tunnel: a comfortable upper-class life, financial success, and the professional recognition. However, there have been certain unfortunate structural shifts in our society that have fundamentally altered this calculus. One of them is the stagnation of real wages. The other is the explosion of the cost of living. For example, back then, someone on a typical upper- middle class income could purchase a house in their early-twenties and have it paid off by their 30th birthday. As people of our generation know all too well, home ownership in the city is now well out of reach for most without external support. Real wages have not increased, but home prices have increased 5-10 times over.
Even assuming a $110,000 salary, after considering high Canadian taxes, student debt payments, and living expenses, saving money for a 20% down payment on a detached starter house in Toronto would take upwards of 10 years of grueling 70-hour work weeks, assuming one is extremely frugal in their living expenses and paying down debt without external financial help.
Law Firm “Mentorship & Professional Development”: Not All It’s Cracked Up To Be
In addition, we concluded that the first five to ten years of being a lawyer didn’t really give you the tools to be an entrepreneur. After ten years of grinding, one would still have to acquire a brand-new skill set to succeed as a legal entrepreneur. We knew that that choice would become harder and harder to make when we became older and had family obligations. The best time was now.
Seniority levels at firms dictate the type of work an associate does, and by extension the types of skills an associate develops. Usually, only partner level lawyers start to build a book of business. It didn’t make sense to us to defer crucial high-income skills for ten years. Why not start at partner level and develop all the skills to run a successful practice from day one?
Examining partnership at large Canadian law firms is another discussion altogether. Partnership tract has been expanded from 5 years to 7 years+, and many firms will require you to be a non-equity partner before becoming an equity partner for one to two years. A lawyer is looking at 10+ years of non-stop grinding in an environment where most associates exit by the third-year mark.
In a profession where knowing the law is so crucial, learning opportunities at a firm are either sparse, irrelevant, impractical, or just plain ineffective. Learning is heavily dependent on finding a mentor willing to reduce their billable contributions to help you understand the basics. From a litigation perspective, for instance, Daniel ran substantive motions in his first year of practice that many third-year associates at a firm may not have the chance to do. You simply learn what the firm needs you to so you can fulfil your seniority-based role. Firms should be preparing you to be a well-rounded lawyer with all the skills you need to succeed since day one. Most firms, and jobs for that matter, do not prepare you for entrepreneurship. This is the simple truth.
Don’t get us wrong. There are definitely lawyers out there who prize mentorship and have acted as excellent mentors for their employees. Substantive mentorship is extremely important, and we receive mentorship from other experienced lawyers all the time. To do otherwise at this stage would be irresponsible. However, traditional, holistic mentorship and support is tougher and tougher to come by in private practice, especially due to the growing technological, substantive, and business pressures on the legal industry.
Starting your own practice flips all of the above problems on their head. There are days which we dedicate solely to learning and expanding our skill-sets. We run a business; we do sales; we do marketing. We speak to clients all of the time. We decide what we bill and how much our time is worth. By keeping our overhead low, we do not have to be constantly overwhelmed with work to survive. By keeping our business lean, we have more free time, and we can better serve our clients. We don’t compete on price, we compete on value. We are healthier, have more mental energy, and do not have to rush through legal work or be doing it completely exhausted, like many of our colleagues. We always make time for a call with our clients and they appreciate this. One large client, for example, has told us that they have both external and in-house counsel, but require even further guidance because they either can’t get these lawyers on the phone, or there is a communication gap between them.
The development of legal technology has eliminated most of the road-blocks to starting a practice. One piece of software covers a majority of our practice management needs. Automation has removed many of the tasks that would have once been done by an administrative assistant. This leaves more time for us to develop our skills, serve our clients, and attend to all other components of our lives. If we have a legal issue we can’t solve, we reach out to more experienced lawyers in our network.
Collaboration and Camaraderie
Finally, there is an emotional and mental health aspect. Lawyers are constantly dealing with uncertainty, and they are often dealing with it alone. Sure, in an employee setting, you can mention your issues to co-workers, but they are usually swamped with their own tasks. The fear of uncertainty is magnified when first starting out as a lawyer because this is the first time you are doing this without supervision. Having another person there that you trust really helps with this. We can trust each other’s legal experience and education.
Many lawyers of late have also spoken on law being a lonely profession. Many lawyers are too busy to speak with you. Mentorship time is in high demand. Junior lawyers at firms can be physically and emotionally overwhelmed. Antonio and I are collaborating every day, making sure we have at least a little bit of social interaction every day.
Collaboration is a powerful tool. We can always bounce ideas off each other. We are constantly sharing our knowledge of the law and anything we learn. We can give each other honest criticism regarding client skills. We can review each other’s drafts. We share precedents freely. Our professional networks are both open to each other when required.
Conclusions & Next Steps
The legal profession is one of rules, yet entrepreneurship is about breaking them. So, being a legal entrepreneur is a truly challenging, at times seemingly contradictory, adventurous path. In truth, it’s not a realistic path for most people. Our arrangement works for us because we are entrepreneurial-minded and are able to tolerate uncertainty in our lives. There are, of course, downsides to starting a practice, but many of these are mitigated by having a trusted companion to share these trials and tribulations with.
Here are some of our ‘rules’ which have held us in good stead on our journey so far:
- You are in business for yourself, but not by yourself. Just because you work for yourself, doesn’t mean you are alone. In fact, as a sole practitioner, you are no longer solely dependant on the personalities of your firm for mentorship. The world becomes your law firm, and you can leverage and work with the people who suit your interests and core beliefs. Building a strong network of colleagues and mentors is essential.
- Givers get. Know that your success will be based on the value you create. Unlike a job, where your pay is capped, being an entrepreneur allows you to expand your ambitions and help others in your own way. The more people you help and problems you solve, the more successful you will be.
- Don’t ask: “What am I getting?” Ask: “What am I becoming?” We mentioned earlier that your why needs to be strong enough to get you through the tough times. Building a lucrative career on your terms doesn’t happen over night. Asking yourself “who do I want to be?” every now and then will help you work in alignment with your goals. Work to learn, not to earn, and the rest will take care of itself.
- Ignore the naysayers. These kinds of people will always exist. You are the sum of the 5 people you hang around most, so make sure that those people are positive, care about you, and are driven by excellence themselves.
- Don’t be afraid to fail. Being prudent is a virtue as a lawyer, but it can be overdone. Most of real success is achieved by taking educated risks. You can’t be paralyzed by fear of failure or you will never push yourself. Making mistakes from real life experience is one of the best ways of learning real skills. Learning is iterative, so keep an open mind, make mistakes, and learn from them. If you fail, try again.
- You can change what you are and who you are by changing what goes into your mind. Most of the difficulty of building a business is in the mindset shift. We’ve had great highs, and great lows, but it is your why that keeps you going. “People often say that motivation doesn't last. Well, neither does bathing – that's why we recommend it daily.” – Zig Ziglar.
- It’s work. We opined that the economic success formula of our parents and grandparents is problematic, but hard work still works. Entrepreneurship isn’t something you do 4 hours per week. It will consume more hours than your job at first. Anything worth having takes time and continuous effort. None of our tips will work, unless you do.
- Give something back. Wherever you are in life, make time to help others in your community and give something back. Pay it forward and see the wonders it does for your self esteem.
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