There often comes in 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 simply go back into the labour market, looking for the same thing somewhere else, hoping for better luck next time, touting around the client following they have and negotiating a salary upon this basis. Some harbour ambitions to float their own boat with more control over their day to day working lives but are put off by the expense and risk of setting up as a sole practitioner. Funding may not be easy to come by. Clients may want the comfort of knowing that they aren’t relying on a one man band.
One increasingly common option is for solicitors to work upon a self-employed consultancy basis, not as a locum, but providing their services to their clients through an established law firm such as Gannons or Cubism law which operate in this way, in a similar fashion to barristers working at chambers. The law firm takes a percentage of sums billed and collected in return for which PI cover, premises/meeting rooms, secretarial/admin/IT and accounts support and access to legal know how/precedents is provided. So far as the consultant is concerned, the firm will also need to have sufficient resources, brand and market presence to provide the comfort to the consultant’s client base needed to keep them loyal and to help her in marketing to new clients.
The firm may well have clients to refer to the consultant. Such access to clients will come with non-poaching undertakings. However, the consultant can expect not to be bound by restrictive covenants in respect of clients she introduces to the business, as she would be if she came on board as an employee.
In addition, because consultants aren’t employees, they aren’t required to behave as such. They can manage their time as they see fit and, in this age of remote access, can work at home. The promise of a “genuine work life balance” is a more genuine one that offered to employed solicitors where this usually means part time work with a strict pro rata reduction in income and home working being viewed with mistrust.
The main downside as compared to being employed is, of course, that the consultant has no fixed salary.
However, the percentages that firms offer for consultants in respect of work done for their own clients can mean that if the consultant was able to “wash her face” from her own client base then earnings will probably be greater than as an employee.
The consultant should bear in mind that any reputable firm that she wants to do business with will want some assurance that the costs that they will incur in engaging the consultant will be covered and that the person is competent. Accordingly a consultant would be well advised to prepare not only a CV but a basic business plan and have references to hand before approaching a firm to work with.
Those considering going down the consultant route should also consider setting up a personal service company to trade through. It’s tax effective for both consultants and the firms engaging them.
For the more business minded solicitors the consultant route is perhaps an attractive one, albeit that choosing the right firm to do business with needs careful consideration and a clear idea as to exactly what is on offer, outside of the bald percentage fee split.