This is the next post in my “starting a law firm during 2015” series. My last discussion provided a quick overview of topics I’ll be addressing over my next several articles. This discussion is going to dive into why you should be hanging out your own shingle during the next year. To put it simply, I think many lawyers aren’t going to be left with much of a frickin’ choice but to open their own firm in the coming years.
The legal profession is rapidly changing in ways that many lawyers currently don’t realize. Recent graduates, understandably, are upset over the lack of jobs. The big thing though is that many don’t realize that there are more whammies about to hit the legal field and these whammies are going to make the last few years look like a picnic. In other words, unfortunately, many are going to find themselves in the situation of this poor guy:
There is good news though. That good news is that this is a time of amazing opportunity for attorneys. Those who take the time to seize upon this opportunity will find themselves sailing off into the sunset with these fine folks:
Let’s take a look at why starting your own firm will help you be the latter and not the former.
The legal profession has lost jobs and will continue to do so
As I mentioned in my last article, the legal profession is continuing to shed jobs even as the national unemployment rate has dropped. The bigger issue, however, is that the rate of job losses is about to accelerate. Considering the following:
- In 2011 there was a marijuana related arrest in the United States every 42 seconds1. Marijuana is on a rapid path to legalization on a national level. This will reduce the need for prosecutors, public defenders, and private defense attorneys.
- Autonomous, self-driving technology, has arrived in vehicles. Google has been working on this technology for years as has Tesla and several other companies. The impact of this is huge.
- If just ten percent of the cars on the road were self-driving, it would eliminate 211,000 traffic accidents a year2. How this impacts personal injury firms, and insurance defense firms, is obvious.
- Driverless technology means a reduction, and eventual end of DUI and traffic related cases
- The Affordable Care Act has greatly reduced the extent to which families are under medical-related financial stress3. This should lead to a decline in medical related bankruptcies which, in turn, reduces the work for bankruptcy attorneys.
I’m not going to give more examples of upcoming law-related job pressures because, hopefully, you get the point. Attorneys displaced from criminal, personal injury, and bankruptcy practices will have to go somewhere. Some will leave the profession and some will go into new practice which, in turn, will make those areas overcrowded. While law school enrollment has dropped in recent years, the fact remains that our country was churning out new law grads like no tomorrow right up until 20134. It’s also unlikely that the drop in law school enrollment can offset the mass reduction in legal sector jobs that is coming over the next ten years. In other words, times are going to get tough for lawyers. This will leave many attorneys looking like this kid:
Now that we’ve talked about the coming doom and gloom let’s look for the silver lining. Wait……….we found it:
This silver lining is the fact starting your own firm, if you do it correctly, represents a bigger opportunity today then attorneys have had in the last five hundred years.
Attorneys who start their own law firm have amazing opportunity
The first benefit of starting your own firm is that it puts you in control of your situation. When you consider the situation discussed above then it becomes easy to realize that you have a big problem if you’ve banked your future on working for someone – if your employer doesn’t adapt and keep up with the times then you may very well find yourself out of a job. The thing is that your employer likely won’t adapt because, and here’s a newsflash, attorneys aren’t good at adapting to change. As I discussed in my 30 days to a better law firm series, the attorney business model has barely changed since we were citizens of England. In other words, the profession is following a business plan that was developed by this guy:
The business model that guy developed is inefficient, leads to a poor return on investment, and is simply not sustainable going forward. This means that most of the lawyers who chose to be employees are likely to go down with the ship. This can mean losing a job or having to work for extremely low wages. Don’t rest your future on the hope that your boss will change with the times. Enjoy the first benefit of starting a firm – which is that it gives you control of your situation.
The second benefit of starting your own firm flows from the first. There are going to be a few attorneys who “do it right” and clean up. These lawyers will achieve a disproportionately high share of law firm profits. Many people will continue to do it wrong and will struggle without understanding the real reason why they’re having such a hard time. The chance to be in a small group of people, who will hoard such a high percentage of the success, is something that has never been presented to lawyers. Many of your competitors simply won’t change. If you choose to do it right, which is what I’ll be discussing over my next several articles, then you can be part of a select few.
In my next post we’ll get to the meat of how to be successful in a new firm. We’ll start by looking at how you can leverage your most valuable asset – that asset is YOU! This is something most attorneys fail to do and it is the most important step in making your new practice a success.
1One Marijuana Arrest Occurs Every 42 Seconds In U.S.: FBI Report – Huffington Post, October 29th, 2012. Accessed at: http://www.huffingtonpost.com/2012/10/29/one-marijuana-arrest-occu_n_2041236.html
2Self-driving cars could save more than 21,700 lives, $450B a year – Computerworld, October 24th, 2013. Accessed at: http://www.computerworld.com/article/2486635/emerging-technology/self-driving-cars-could-save-more-than-21-700-lives-450b-a-year.html
3‘Obamacare’ reduces medical financial stress for U.S. families – MSNBC, January 15th, 2015. Accessed at: http://www.msnbc.com/rachel-maddow-show/obamacare-reduces-medical-financial-stress-us-families
4Law School Applications Continue to Slide – http://www.washingtonpost.com/business/capitalbusiness/law-school-applications-continue-to-slide/2013/06/02/db4929b0-c93f-11e2-9245-773c0123c027_story.html