Alternatives to the late-career wind-down for sole practitioners
Is this your situation? You’ve had a successful career. You’ve achieved your success on your own as a sole practitioner without being part of a larger firm.
You still enjoy practice but you don’t enjoy competing with the cut price operators. Your loyal clients will hire you without hesitation but you are not attracting many new clients. In recent years your revenue has been declining, sometimes more rapidly than you want.
When a large matter presents itself, you have to knock it back because you don’t have the resources to handle it. Being on your own means you can’t leverage junior staff at lower rates.
Because you don’t really need the work, your pricing structure has become out of sync with the market. It is almost as if you are putting a barrier between yourself and new matters. That is less of an issue from a financial point of view than it is a waste of the experience and skills that you have acquired over many years.
The path described above is the path to the end of your career. The alternatives below are designed to extend your career.
One alternative path is to sell your practice and convert your position from principal to consultant. There are many in this position who retain a title of partner, which is still valid as a non-equity partner.
However, if your fees have declined beyond a certain point then there may not be enough revenue for the new principal and yourself, even if you are on a part time basis. There also has to be enough revenue to pay for overheads.
You may think that a younger lawyer could quickly rejuvenate the practice and double and triple the revenue. That may be the case but a young solicitor will have to take a chance. When they see the declining fees, they will have less encouragement to take the risk.
If you don’t have the level of revenue to be able to attract a practice buyer, then another alternative is to merge your practice with a larger firm.
If your fee revenue has declined too much you might not be able to justify your own permanent desk. However you will have access to a professional environment to meet clients. The firm should be able to provide remote transcription if you are used to dictating correspondence.
As part of a larger firm you will be able to take on the larger matters that you have been rejecting. For small matters, you can do the part of the work that utilises your knowledge and experience. This is usually the part that adds the most value in a matter. The remainder of the work can be delegated within the firm.
Because you are able to do only part of the work on a matter and delegate the rest, you will be able to take on new matters and charge clients competitively. This will encourage further referrals. You now have a path to rebuild your revenue while still only doing the work that you want to do.
Merging with a larger firm that is set up for this type of arrangement is an ideal way to extend your career. Because it can be too much of a leap of faith jumping into a new firm after such a long time as a sole practitioner, we have devised a transitional arrangement where you retain your independence for as long as you need.
Please contact us if you would like advice and assistance for transitioning into such an arrangement or if you are a firm that would welcome experienced practitioners on this basis.