How To Become a Consultant Lawyer – An Essential Guide
What it is, why it might (and might not) suit you and how to go about making the change
The consultancy model for lawyers is one that has been growing rapidly over the past decade.
Fundamentally, it means acting as a self-employed lawyer either as an individual or via a wholly-owned service company.
You might also hear the role being described as a “freelance lawyer” or a “contract lawyer”.
Here I explain what this alternative career path is and how to become a consultant lawyer.
Challenging traditional law
What started as a way for highly specialised and in-demand lawyers to offer their skills and experience more widely has developed into a complex model for how some large firms are operating.
While there are still plenty of specialists who operate as one-person consultancy businesses being engaged by traditional firms as required, there are now entire “new law” firms who have set up their practice using consultant lawyers and a centralised back-office.
They take a percentage of fees earned by the lawyers to operate the support services given to their lawyers.
Many of these newer firms have grown significantly over recent years, with some funded by private equity or public listings.
For example, “challenger law firms” Keystone and gunnercooke are already hitting the top 100 firms list based on turnover.
The benefit to firms operating in this way is that they can service their clients’ needs based on each specific issue or project, pulling in the appropriate expertise each time, and increasing client satisfaction and therefore billings.
It also allows them to benefit from the cost savings of centralised administration, remote working and using the latest technology.
From a lawyer’s point of view, the income per £1,000 of client billings is often significantly higher than what would be earned in traditional firms.
There can also be enhanced rewards for winning new business – for example, one firm lets its lawyers keep 70% of their billing income if they brought the client onboard and 55% if the firm found the business.
There’s also a more entrepreneurial and business-minded approach to these firms that many lawyers can take advantage of to enhance their earnings further.
For example, one firm offers a referral fee of 15% to any consultant lawyer who refers work to another consultant lawyer associated with that firm.
Many lawyers rave about the flexibility of working wherever suits them and the client best.
At the central office, from home, from the client’s offices, or anywhere you have access to the internet and a phone signal.
What’s behind the increase in consultant lawyers?
One key driver for the increased popularity of operating as a consultant lawyer has been the inflexibility of the traditional law firm models.
Law firms have struggled to change decades of working practices in the face of an increasingly fast-paced and fluid business environment.
Many of their senior lawyers became disenchanted with the inability of their firms to become more agile and offer a better service to clients.
Another key push is that the world of work isn’t the same as it was even 20 years ago, and a sensible work-life balance is something more and more professionals are refusing to compromise on.
Many lawyers, particularly women, find themselves having to make a difficult choice between career progression and family life at some stage in their lives.
This was borne out by research commissioned in 2020 by the Financial Times that found that there are now more women than men practising law in the UK, yet under half of associates, and less than 20% of senior lawyers, are female.
A consulting lawyer role also provides a great opportunity for experienced lawyers to make life changes that they would otherwise be unable to do following the traditional career model.
Some fund their real passions by flexibly working as a consultant lawyer for most of the year and spending their earnings doing what they really love during the rest.
For example, one lawyer works for eight months on legal projects and fixed-term contracts and spends the remaining four months teaching people to ski in the Alps!
There’s also a good business reason why consultant lawyers are wanted by in-house legal departments.
It’s often cheaper to bring in a consultant lawyer to cover long-term leave, such as maternity or sickness, or for their specialist knowledge on a case-by-case basis than engaging a law firm to provide those resources.
Consultant solicitor or freelance solicitor?
The terms are often used interchangeably, but there are actually a few key differences between the two and how they operate.
Consultant solicitors usually work under the auspices of an ‘umbrella’ firm.
That business is SRA regulated, holds professional indemnity cover, and is responsible for compliance, holding client money, and billing and collecting fees.
Clients are allocated the lawyers with the best skills to suit the particular case or project.
You bill the umbrella firm for your “cut” of the fees you earn.
A freelance solicitor operates differently in that they contract directly with their clients.
They are also SRA registered, but they aren’t permitted to hold client money or contract through a corporate legal entity, and they are responsible for their own indemnity insurance.
You negotiate directly with your clients on your hourly or fixed-cost rates and bill them for the full amount.
While you can operate in either way as a private individual, most freelance and consulting lawyers operate through personal service limited companies.
However, a recent cat among the pigeons has been the changes to the IR35 rules around “off-payroll” working.
This has been tightened to remove the tax advantages of personal service companies being used to disguise what is effectively employment rather than true contracting work.
The impact of these changes remains to be seen.
I’ve had consultant lawyer clients who have said that their law firm clients do not want to take on the risk of falling foul of the new regulations and so they are no longer using consultants in the ways that they were before.
There’s no doubt that it’s now a rather more complex area than before, and you won’t need me to remind you to take good professional advice about your own situation if this is something you intend to pursue!
There are other ways of working in the law that offer some of the flexibility of a consulting lawyer but without many of the legal, business and tax headaches.
Working as a locum solicitor or taking on fixed-term employment contracts to cover specific situations are popular choices.
As are seeking out part-time opportunities, particularly in the SME and not-for-profit sectors where your expertise may only be needed a few days a week.
Is this the future of law?
As the “gig economy” increases in size, and more and more professionals begin to work as freelancers, the demand for flexibility and control over our working lives is only going to grow across the professions.
Because of this, the consultancy model is likely to continue its rise as a popular option for lawyers.
Indeed, a report in early 2021 by Arden Partners forecasts that up to a third of qualified lawyers could be working as consultants by 2026.
However, cutting yourself free from the traditional and secure “salary plus benefits” culture is always going to scare as many as it attracts, so I can’t see it completely challenging the way lawyers work any time soon.
Nevertheless, it’s definitely going to grow, and as more lawyers take the plunge and report on their increased happiness, greater flexibility, and even enhanced income, the attraction can only increase.
Is it right for you?
As with any profession or career, there are those for whom the stability, certainty and comfort of employment suit their personality best.
You need to be brutally honest with yourself about how well you will cope with the realities of being your own boss and moving away from a traditional “competitive salary plus benefits” culture.
This is where engaging a career coach can be very useful.
By getting to know you as a person as well as using tools like personality questionnaires and psychometric profiles, an experienced coach will be able to help you understand your likelihood of being able to thrive as a consultant lawyer.
An objective professional will also help to give you the confidence to “go for it” if you fit the bill but are unsure about when to make the move.
So, who would benefit most from moving away from an employed role as a lawyer?
Firstly, and perhaps most obviously, any lawyer with an entrepreneurial bent is only going to satisfy that side of their character by becoming their own boss.
But it’s also a very attractive option for lawyers who are dissatisfied by the lack of control and autonomy they have over their work as an employee or who are looking for more flexibility and freedom.
After all, consulting lawyers get to choose which clients they will work with and when.
This flexibility can be particularly attractive to lawyers wishing to return to practice after a career break or whose circumstances at home have changed and they would like to fit work around their personal life, rather than the other way round.
Work/life balance is becoming more and more important to many of us and is a big driver for many consultant lawyers.
Consulting (or other flexible working options as above) can also be the ideal choice for lawyers who are looking to get away from the traditional working practises of law firms and legal departments.
For many, it’s time to ditch the long hours, long commutes, billing targets, time recording, client (and manager) demands, office politics, competition for promotions, lack of control in your own workflow, and more.
Benefits of being a consulting lawyer
While there are potentially many benefits to practising as a freelance lawyer, it’s important to remember that one person’s benefit is another’s worst nightmare!
That’s why it’s so important to explore this well before you make a fundamental change to your career.
But assuming this option is right for you, there could be many upsides.
Ultimately you can determine when and where you work.
You’re no longer tied to an office if you don’t wish to be – a modern smartphone, laptop computer and digital workflow solutions mean that your “office” can effectively be anywhere in the world.
You can work as many hours as you wish, and put those hours in at any time of the day or night to suit your circumstances.
There will be much less of your working day taken up with management (either up or down) and administration.
You can be far more agile in your working practices because you get to dictate what those practices are.
This means you can also be more responsive to the needs of your clients.
You can work alone, or you can build a team around you as your practice develops and as your needs change.
There is a complete lack of hierarchy in your work life.
This can often be the first step in building a portfolio career.
Your work as a consulting lawyer will bring in an income that allows you to set up a side business.
Disadvantages of being a consulting lawyer
As always, the benefits of this career transition seem very attractive.
However, it’s vitally important that you’re also fully aware of the potential downsides of consulting and freelancing before you take the leap.
That’s not to say that any of these are “deal breakers”, but by being forewarned you can build strategies into your career plan to address them.
The end of financial certainty
For most people, this is THE big one.
Saying goodbye to the financial metronome that is the regular, reliable monthly paycheque is often the last thing that keeps people employed in a role they dislike.
You may find that your annual income stays the same, but that now it comes in “lumps” through the year, necessitating a change in personal or family spending habits.
You will lose access to financial benefits associated with employment like sick pay, holiday pay, maternity and paternity benefits, and subsidised professional memberships or CPD.
You may well need to spend a lot of time and energy in building a personal brand before you can either attract your own clients or be taken on by a consulting firm.
Your current employment contract may include restrictive covenants on approaching existing clients or using contacts you made in that employment so you may need to devote a lot of time and travel expenses to networking.
If you’re going alone you will need to research and invest in tools (physical and digital) to manage your clients and workflow and learn how to use them.
You may need to set up a home office if you don’t have one already (although Covid-19 means most have), as well as ensure suitable broadband and mobile connections.
You may well be responsible for your own professional indemnity insurance.
You will have to set up a bookkeeping or accounting system, start tracking expenses and receipts, engage an accountant, and register as self-employed with HMRC.
You will need to manage your own CPD and professional memberships.
The next steps?
According to legal consulting service AG Integrate, the “ideal” consulting lawyer has emotional intelligence, flexibility, independence, an entrepreneurial spirit, resilience, discipline, and the ability to quickly build relationships.
I think that’s a very good starting point for the skills you need to make a success of leaving employment in the law and setting up on your own, whether that’s flying solo or as part of an umbrella consulting firm.
So, if that sounds like you, how do you become a consultant lawyer in the UK?
While all the legal consultancy firms, including the “new law” challengers and the add-on consultancies to traditional firms, can be approached directly and may be happy to have a conversation about your potential to join, I much prefer to conduct more self-directed research before approaching those who hold the opportunities.
I always advise and help my clients to find ways to set up conversations with a range of consultant lawyers who work in different ways and for different firms.
You need to ask your own questions so that you get the information you need to address your own individual concerns or goals.
This will be invaluable in not only helping you to decide if this move is right for you but also in finding the right firm to join, identifying the right business model/contracting basis for you or in deciding that you have what it takes to set up on your own.