Thursday, July 11, 2013

Going it alone

It has been just over a year since I decide to leave the relative security of full time employment and strike out on my own. Being my own boss has so far been an easy transition. Aside from the occasional panic attacks that there is something I should be doing that I haven't done (typical lawyer stress in every field), that I'm doing something wrong (another typical lawyer stress), or that no one else will ever want to pay for my services (again experienced by most lawyers, but most acutely by the self-employed), it's been a pretty stress-free ride. It has changed how I think about "work" and made it more difficult to talk with other people about work related things because my experiences are just no longer the same. So this post is my attempt to explain why I chose to start working for myself and what I have learned from doing it.

When I decided to go to law school, I really never intended to have my own practice. I held basically the same assumptions as all my friends and family around me--that I would give the best years of my life to some employer hopefully in exchange for enough compensation to provide a comfortable living and a reserve for retirement. When I finally got my first "real" job out of college, I was a bit disillusioned. I struggled financially and constantly feared that I would lose my job. I had a second part time job for over a year just so that I would have some cushion if something happened. Nothing felt permanent, even though that's what my parents and their friends told me you were supposed to get from a full-time job--permanency, a path for advancement, and ultimately lifetime employment. I couldn't see any of that in my position. I started a retirement account and didn't know what I was doing, so I saw my account value increase exponentially and then dwindle to almost nothing with the stock market. There was no upward mobility to speak of at this company, so over the three years I spent at my first real job, I created my own path for advancement by teaching myself new skills. But where to go from there? I started interviewing for other jobs and although I had some decent offers, the positions seemed expendable. I needed real skills, and I wanted to do something with purpose, so I decided to go to law school. I originally wanted to be a public defender, actually. I believe that PD work is some of the most important work done by attorneys in our country. Ideally, the effort of public defense attorneys help keep the system honest and protect those in our society who have the least--supporting true American values in my opinion. Well, nothing inspired by idealism ends as expected, and my story is no different.

I knew two lawyers when I applied to law school. They both worked for big firms, had a ton of money, and never talked about their work. I knew so little about the legal field that I couldn't possibly have even known what questions I could have asked them that would have given me the information I needed to decide if law school was even right for me. Was law school a good choice? Ultimately it didn't matter because of the events that unfolded. Also, once you become a lawyer, there is truly no going back; you're stuck. But I had this idea in the back of my head that I could always go back to my prior career if things didn't work out. My backup plan went to shit one month after I started law school when my former boss moved his company to Sacramento. One month later the dot-com crash happened and he started laying everybody off. People with my pre-law school skills were mostly unemployed and a dime a dozen. There was no back-up career for me and definitely no job to go back to.

With no back-up plan, I took out loan after loan to keep going. I thought maybe I should focus on trying to just get a job--any job--that would pay better than a public servant starting salary. As I went through school I developed a better understanding of the history of the practice of law and how this whole idea of the big firm is a fairly modern concept. A license to practice law is a license to do your thing without having to work for someone else. Ostensibly a lawyer should never be unemployed because a lawyer doesn't need anyone but a client to work for. But I had never considered not working for someone else before, and I was clearly going to leave law school flat broke (ahem, make that in six-figures worth of debt) and without any business skills, so I focused on finding a job.

To put it mildly and simply, the job search sucked. My self esteem plummeted. Fast forward through a bunch of crappy temporary gigs, part-time jobs, a crazy solo, a nice solo that I disappointed because I didn't know how to be an associate and he didn't know how to train me, and I landed at the only opportunity I could find at the time--a job 40 miles from where I lived for less pay than I had made at the job I quit to attend law school.  I did make attempts at following my dream (?!) of being a PD, but it turned out that there were few openings and those who found the time to do volunteer work were the natural choices to fill any paid positions. Besides, I had become disillusioned with indigent defense work during my time at the Criminal Clinic, but that's another story.  Mostly I  felt like I couldn't work for free when I had $100k in student loan debt sitting and accruing interest.  So my career path was determined by me having taken any and every paid position I possibly could.

I found myself about 7 or 8 years after graduating from law school driving for 2.5 hours every day to get to a job that wasn't so bad, but also wasn't leading to anything better, and I just felt ridiculous. On days when I didn't have a court appearance or something to get me out of the office, I would sit at my desk for my 8 - 9 hours and sometimes I wouldn't even see anyone else but the secretary. Why was I wasting so much of my life and money in and on my car?  I would sit on the freeway and look at all the other people around me and wonder how many of them actually needed to be at their desk to do their job.  It just seemed so stupid.  I didn't even get that elusive benefit of face-time most days. When I asked to work remotely, things just never seemed to be set up so I could get anything done, or it would be during a slow period and I wouldn't have much to do, so my boss naturally assumed I was just slacking off. I started to get pissed at this point--why did I need to drive 80 miles to sit in my office and twiddle my thumbs? Particularly when hardly anyone else was ever there? It was like he just wanted to make sure he was controlling my life. It was stupid and the countdown started to the time when I wouldn't possibly be able to put up with it any longer. But what was I to do? I couldn't imagine myself being an associate for some other crazy attorney again, and the potential partners I knew had already gone off and done their own thing. Anyway, I didn't have the capital to set up a full-blown firm. I knew the only real option was to work for myself.

Without realizing it, I had already started developing some skills helpful to going it alone. You see, I had never made all that much money, and it occurred to me about 4 years ago that unless I got some cushion in my budget, I was never going to have any options. So I learned to budget, learned to limit my expenses, and started paying off bills like crazy. I learned from the ERE people, though I didn't take things to that extreme. I also started stashing money into savings. It took a couple years, but I finally whittled my debts down to just student loans. When I got to this point, I did the math and figured that if I put all available resources towards my loans, it would take at least 3 more years of suffering to pay them off. This was no good. Surely I would end up getting fired or killing someone if I had to last another 3 years. So I decided I could live with the student loans for a while (mine have fixed interest rates and really aren't so bad compared to what most recent grads are saddled with). Instead, I increased my savings rate and set a goal. My intention was to quit and work for myself when I got there. I reached that goal around Christmas of 2011, but I was still too nervous to make a move. I recalculated my goal to set myself up with enough cash so I would be OK even if I had NO income for 6 months (or longer), and a couple thousand dollars to put towards my start up costs. I neared my goal in the next couple months, and decided that I would be gone by mid-summer.

When I put in my notice in June of 2012, I invested about $1000 into software, online services, a virtual office plan, office supplies, and a fax/scanner/printer. I passed up the high end items like new computers and the priciest legal software. I found alternatives that were cheaper and decided to make good use of the law library that's less than a mile from my house. I knew it was going to be a while before I even thought about a brick and mortar office or employees, and I wasn't sure I was even interested in that. I didn't immediately buy malpractice insurance, but I did shortly after and this was the most expensive single item for me (over $2k).

At this point I had clients encouraging me to separate and go out on my own and potential clients who were being referred directly to me by friends and other attorneys, so I knew I would have some income. It was also easy to work out a decent arrangement with my former boss over the clients I was in the midst of representing. I didn't want to create an all-out war by taking them and running, and he had an incentive to be fair with me in the fee division as he knew some of the clients would inevitably come with me if he tried to cut off our relationship entirely.

I left at the end of June and had 10 or so clients to finish up with my former boss and three of my own new clients. I started working and I have never looked back. I have found the "business" side of things not so difficult as I was used to keeping good track of my money already and it was easy to transfer my budgeting skill to bookkeeping for my business.

So when do I "work"? When I have things I need to do! It can be frustrating how long it can take to get business-related stuff done. I have to do my own office supply shopping now. If my printer stops working or my network goes down, there is no one to call but myself. It has taken me at times a full day to get a stupid envelope printed. It takes me at least one full day every month to send out bills and do my trust and operating account reconciliation. When I'm not busy, I think about all the marketing I should be doing for myself, think about how I never know if I will have any money coming in 2 or 3 months from now, and sometimes I spend time on that but sometimes I go to the pool. I move seamlessly in and out of work related items as needed but I do have some boundaries. I don't do anything work related on Sunday, I stop working when my husband comes home from work (if I haven't stopped already), and I try not to schedule things on Fridays unless I need to because that is my husband's day off.  But when someone asks what hours I work, I usually pause and stutter and say something like "whenever!"

How do people take me seriously without a dedicated office space? I struggle with this one. Like the other assumptions I had about work, I grew up with the assumption that a professional has a dedicated office outside his/her home.  But I don't need one right now and the expense is huge.  It would also turn me into something of a self-employed commuter.  True I could control the commute, but that contradicts some of what I gained from quitting my job to begin with.  Maybe someday, but not yet.  True, there are some things that would be easier with an office, and some people who just won't take me seriously without one, but there are even more potential clients who don't care and even see a potential financial benefit to them by my reduction of overhead.  I find that the generations following mine are even more disillusioned with this traditional concept of work than my generation has become and they don't see a need for any of the traditional trappings of work as long as you can do what you're paid to do.  Also, an office can be a disadvantage.  When I worked for other attorneys, no one ever just walked in the front door without making an appointment who did anything other than waste my time.  A serious client will vet you and make an appointment first.  Someone who walks in the front door is trouble (even with existing clients).

What about retirement benefits? Well, I did lose my employer's matching contributions, but I still only had an IRA.  If you are lucky enough to have one of the very rare jobs that still offers a pension, hold onto it.  Save money in other ways, too, because those pensions are no longer guaranteed.  But as someone who spends a lot of time dividing up retirement benefits I can attest that most 401ks and IRAs aren't worth jack compared to even a modest lifetime pension. I've never been blessed with such retirement benefits, so if I have a good year I can put far more money into my retirement account than I ever managed to before even without the matching funds. But my change in work style has changed my attitude about retirement. I don't want to wait until I'm 65 to enjoy life, and that is one of the reasons why I struck out on my own. I am trying to balance my current enjoyment and lifestyle with the knowledge that one day I won't be able to work at all and arrange my life thus. I'm not quite there yet, but then again I've only been working on this for about a year.

But I'm a lawyer, so surely I have a big house and a Lexus, right? Hardly. The only way I was able to achieve this comfortable of a work/life balance was to manage my expectations and lifestyle. Of course I have materialistic tendencies like most Americans. Mine are focused on travel, food, and wine. Sometimes I think that people must look at my Honda Civic and assume I couldn't possibly be a very good lawyer or I'd have more money. That is the type of judgmental materialistic thinking I'm trying to eradicate in myself, though, so I realize that I need to not worry about what other people think. I have mostly lost the drive to compete with material possessions that is so glamorized in our culture, and I kind of feel sorry for the people who are wrapped up in that. I live comfortably and I have more than most people in this world for sure. I was lucky enough to be born into this country in a middle-class family, so I am somewhat trapped like everyone else with bills (and don't forget those student loans I haven't paid off yet). But I usually live within my means and I prioritize. I would rather take my budget trip to Africa than buy a new car. The amount of money I spent on that trip to Africa wouldn't even have paid for a Kia anyway. And there's nothing like a trip to the third world to slap you in the face and tell you to stop feeling sorry for yourself for not having as many nice things as your neighbors.

Would I encourage other people to try working for themselves? Yes and no. Having a profession made it logical and relatively easy for me to transition. I sense that as a society we are moving more towards a model of workers as independent contractors rather than employees in general. Many workers have had and will have no choice in this transition. It couldn't hurt for anyone to work on developing business skills, learning how to price yourself and the work you do, talking about money upfront, and budgeting. These skills can help you even if you work for the same employer for the rest of your life. I have known so many people in the last few years who have been unceremoniously dumped by their employers or worked nearly to death until they waved a white fag in defeat and quit. Companies are adding and dumping departments quicker than ever or merging with other companies and getting rid of divisions. New industries seem to be created and die out faster than ever before. So having something going on on the side is never a bad idea; it's almost imperative.

At this point I sometimes enjoy the management of my business more than the actual legal work. I worked in databases in my previous career and I just know that I could design an awesome database that would fit all my business accounting needs, but it would take me a month to do that and produce no income, so the legal work is more important for now.  But I'm constantly looking for a way to develop my business to bring in a stream of income that isn't dependent on my ongoing labor. So if you've got a good idea and think we could work together on something--e-mail me! Money is not my priority but like everyone else I'm always interested to maximize income with minimal effort.

I still do value PDs, by the way. Everyone should watch Gideon's Army and have a little respect for the only people whose increasingly difficult job is to try and protect the few remaining rights we have as Americans. I'm glad I didn't go into it for myself because I feel like if I entered this field I wouldn't be able to live with myself if I made any mistakes whatsoever. I have a hard time living with mistakes generally, but when the consequences are merely financial and not someone's freedom, it's a lot easier to get over it.


  1. Great entry but you do have one fancy thing. Your pure breed dog he is so fancy with his lady feet. Also your husband does have fancy tastes as well.

  2. Yes, he is fancy. Of course I have a fancy dog because of my fancy-ass husband :)