Practice Management

I am coming to the conclusion that most self-employed lawyers should do so, especially those in collaborative relationships with other attorneys.

I know. I know. Salaries and overhead are what I do not like about traditional law practices. But, what happens too often with us self-employed types is that we cover what we have to and then live off the rest.  

That, in and of itself, is a nice concept. However, what I have discovered about myself over the years is that I am good, even if it is a little frustrating, in meeting my monthly, weekly, yearly, or whatever time frame earning goals -- but not much else.

So, what I think I might try is instead of figuring out what it takes to make ends meet and then living off of whatever is left, I will calculate in a salary or sorts that I also need to meet. I make more, well then I get a bonus.

If you had an employee, you would strive like mad to meet that requirement, would you not? Not having employees is liberating to say the least. It is what I live for. But, now I am thinking I need to strive like mad for me.

Lawyers just have to know their income cycle, payables and receivables, and know what it takes to make ends meet. I know this is somewhat subjective, but if I pay myself those understandings are better clarified.

And, the key is not really to increase my lifestyle overhead. That is dangerous and that is what not drawing a salary helps control. It keeps lawyers realistic and humble. That is actually a good thing.

When you try to determine, however, how profitable is the law practice, what are the cash flow needs of the practice, and emergency funding issues, that is really hard to gage if you do not include a salary.

It might help, as well, to look into a PEO to segregate out the income, taxes, health benefits and the like from your other office overhead.

Just a thought.