Many people start their own law firms because they want to enjoy the freedom and flexibility afforded by self-employment. Indeed, self-employment can be extremely rewarding and can permit lawyers to practice law the way they want to without the hassle of having a law firm boss. Although attorneys may not think about long-term career consequences associated with opening a practice, starting a firm can have negative career consequences that lawyers should consider.
Difficulty Leaving
It is difficult to close a law practice and accept other career opportunities once a lawyer opens up a law firm. If a lawyer handles litigation matters, they cannot be discharged from those matters without court approval. This can be time-intensive, and some courts take every excuse they can to keep lawyers assigned to cases. Even if a lawyer handles non-litigation matters, it might be difficult for the lawyer to withdraw from a representation in the middle of a deal and find substitute counsel. Of course, many lawyers can bring their clients to other law firms that employ them, but some career opportunities, like government jobs, require lawyers to be free from client responsibilities associated with their own law practice.
I personally know several lawyers who have struggled to find new work since they had difficulty leaving the responsibilities of their law practice behind. In several instances, lawyers tried self-employment for a few years and then realized that they could not make a living running a law practice. These lawyers attempted to join other law firms, but some of the lawyers had contingency-fee cases and other matters that were not desirable to the new law firm. In several instances, I have been approached about taking lousy cases from such lawyers so that they could pass these matters onto other lawyers and have an easier time leaving for a new law firm. This phenomenon is especially bad for solo practitioners and small firm lawyers who cannot easily pass work to someone else at their firm. I think court rules should be changed to make it easier for such attorneys to withdraw as counsel to take career opportunities, but that should be the subject of a whole new article. In any case, lawyers should be aware that work they perform for their own practice can impede them as they move through their careers.
Prestige
As I have discussed in prior articles, the legal profession is addicted to prestige. Where you go to law school, and how prestigious that institution is perceived to be, can have longstanding consequences on a lawyer’s career. In addition, the prestige of working at a fancy law firm or government position can help propel lawyers to new heights in their careers. Some lawyers have told me that they are fearful of getting off a kind of prestige escalator in their careers, and take positions that are less regarded since they may have difficulty getting back on this escalator and have difficulty snagging prestigious positions later in their careers.
Starting a law firm is not considered prestigious to many lawyers. Indeed, there is oftentimes a stigma around people who start law firms, and some might erroneously believe that individuals who start law firms had no other options, and this is why these attorneys took the plunge to launch their own practices. As a result, running a practice might significantly impact a lawyer’s resume and make it difficult for self-employed attorneys to pursue other opportunities later in their careers.
All told, there are many reasons why people choose to start their own law firms, but lawyers need to carefully consider this option. Starting a law firm can have short-term financial and vocational consequences and can also impact attorneys for years as they move throughout their careers.
Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothman.law.
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