In the United States, sole practitioners earn an average of $68,000. In Australia, salaries are likely similar.

Lower earnings and NewLaw developments are making solo practices less attractive, says Rolf Howard, Managing Partner of Owen Hodge Lawyers. In this article, he outlines the difficulties they face and provides advice for the future.

Challenges faced by sole practitioners

Solo firms are facing unique challenges due to changes in legal culture, technology and the economy.

Competition with online services

NewLaw has made it possible for service models, which didn’t exist a decade ago, to flourish. Legal advice can be delivered through online platforms at a lower cost than sole practitioners, making it difficult for them to compete.

Talent migration

The current job market has meant lawyers are looking for firms with long-term employment prospects. Bigger firms and NewLaw services have more flexibility and opportunity, while solo firms are often not as attractive to new graduates.

Lack of cross-generational experience

Bigger firms have the significant advantage of employing people from different generations. A modern firm may have a broad range of experience – from tech-savvy lawyers in their 20s to experienced partners in their 60s. Solo firms simply can’t compete with this broad range of experience.

Failure to innovate

Unlike many other professions, small firms have been less adept at responding to shifts in the legal landscape, particularly regarding new technology and online legal services. Big firms have more money to invest in innovation, while small firms tend to be slower to evolve.

The future for sole practitioners

So what does the future hold? Paradoxically, some of these challenges may provide opportunities to sole practitioners. While online service models and technological changes can produce difficulties, they also make it possible for lawyers to deliver their services in more efficient, innovative ways.

Sole practitioners may begin to offer their services through independently-owned online platforms. They would manage lead generation, sales process and administration, while lawyers can work remotely, with low overhead costs.

These online firms offer a modern alternative to traditional firms, focusing on high quality service with low costs.

While this may seem attractive, many lawyers won’t be interested in working as an independent contractor with few or no benefits. Managing inconsistent workflows and comparative isolation may also be a deterrent to people considering the ‘solo online’ option.

Many lawyers who don’t like working remotely will simply transition to traditional firms. Their structure provides stability, opportunity and direct contact with clients and co-workers.

Ultimately, sole practitioners need to consider their personality, career ambitions and desired work environment when deciding how best to evolve as their model becomes less profitable.

Those who are great team players will be more likely to switch to traditional firms, while others who prefer more independence will probably embrace online models. Either way, the legal landscape is changing and we have to change with it.

About Rolf Howard

Rolf is Managing Partner of Owen Hodge Lawyers. He has been in the legal practice since 1986 and a partner of Owen Hodge Lawyers since 1992. Rolf focuses on assisting clients to proactively manage legal responsibilities and opportunities to achieve competitive advantage. Rolf concentrates on business planning and formation, directors’ duties, corporate governance, fund raising and business succession. His major interest is to assist business owners and their financial advisers plan and implement strategies to build and exit from successful businesses.