🤿 Sunday Deep Dive: Three Reasons Why Solo Lawyers are Stealing Business from Big Firms
Solo lawyers are disrupting the legal services industry. The ‘lawyer-on-demand’ sector currently represents roughly 1% of the industry but it’s growing fast. That figure is forecast to rise to 10% by 2025. Alternative legal services, such as freelancing platforms, are now used by close to 80% of law firms and 70% of corporate law departments. It’s part of a broader trend towards freelancing. One survey found that 10 million Americans (20% of all employees) are considering doing freelance work.
Here are 3 reasons why everybody's going solo.
Value for money
Probably the most obvious benefit of hiring a solo lawyer is the cost saving. The average hourly billable rate for lawyers is around $300. Of course, fees vary depending on the area of law and the seniority of the lawyer (partners at top firms can charge well over $1000/hour) but solo lawyers tend to charge less than firms. Lawtrades average hourly rate, for example, is only $150-200.
Law firms charge you way more per hour than what they pay their lawyers. So where does the rest of your money go? At least some of it pays for shiny offices and big profits. When you hire a solo lawyer, you only pay for what matters: the lawyer’s time - and maybe a recruiter or freelance platform fee.
Plus, you’ll only pay a freelancer for as long as you need them whereas hiring a new full time lawyer is a commitment to ongoing overheads like salary, insurance and office space.
In most US jurisdictions, law firms are allowed to charge clients the market value for legal services, even if they outsource the work to a solo lawyer who charges below market value. That means outsourcing can bring in a profit.
It may take time and resources to get freelancers up to speed with your team and what you’re working on, but, even with that cost built in, freelancers are likely to save you money. And who wouldn’t want that?
Qualified and experienced candidates
Part of the appeal of traditional law firms is that they only hire candidates with top marks from top tier universities. Besides the fact that these firms are missing out on all the benefits of building a diverse workforce, companies are starting to realize that there are other ways to gain access to quality talent.
Freelancing platforms are one of them. The benefits of the freelance lifestyle are attracting experienced legal professionals to opt out of the traditional work model. Platforms make freelancing even more appealing by offering lawyers the perks and securities of a traditional workplace, like malpractice insurance, 401k, and even gym memberships or co-working spaces. They also make it easy for companies to connect with talent.
Platforms have access to a large and diverse pool of pre-vetted lawyers which means they can match clients with the right person for a specific job. This is especially important for work that requires specialist knowledge. The nature of freelancing means that clients are not restricted by geography, even if the ideal candidate lives in Timbuktu.
Law firms may offer employees (and clients) prestige and bragging rights but by 2025, 75% of the workforce will be millennials. Research tells us that 95% of millennials rank work-life balance as a top priority when job hunting. And according to a survey, 78% of lawyers working for firms in the US would choose flexible working over a 10% raise. It seems likely that more and more lawyers will be taking the solo route. And it only makes sense that the best and brightest talent will be among them.
Flexibility and efficiency
Solo lawyers can step in to complete short-term, high-volume projects that would otherwise eat into the time of in-house staff. This is far more efficient than hiring a permanent employee or disrupting the day to day work of a staff member. Low value or routine tasks (like large document reviews, compliance and contract life cycle management) and even more complex tasks (like drafting and legal research) needn’t always be performed by highly experienced staffers. Solo lawyers who specialize in routine tasks can often complete them more quickly.
Hiring solo lawyers allows companies to be adaptive to changes in workload and to mix and match specialist knowledge at their disposal. Since the start of the pandemic there has been a surge in mergers and acquisitions and capital markets activity. Companies could adapt to this change in the demand by temporarily expanding teams that deal with those kinds of matters. They can also take on niche projects they wouldn’t otherwise have the capital to complete. This is especially useful for small law firms which have a limited offering but want to offer existing clients the full package.
What’s more? Freelancers can be integrated into an in-house team which means companies can retain ownership of a project in a way that isn’t possible when outsourcing a project to a law firm.
Using freelancers to maximize efficiency and adaptability has been de rigueur in other professions for decades but the legal industry has been slow off the mark. Critics warn that the industry must abandon old-fashioned work structures before it gets left behind.
If you want top legal talent that works around your changing needs at a good price- then it’s time to go solo. A platform like Lawtrades is the best place to start.
Illustration by Alex William