Author Topic: I'm a biz owner (law firm)- but maybe I no longer want to be? Advice requested!  (Read 956 times)

CNM

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I am a business owner (small law firm).  Sometimes I love my work, sometimes I don't.  I am 41 years old and I have 2 elementary aged kids.

I am at the point where I have sufficient savings to take an extended sabbatical. 

I could do so, but that would mean unwinding and closing my firm.  I am sure my small number of employees could easily find other work but the problem is that re-establishing my business should I regret my decision would be difficult-- I have great staff, a great location, plenty of good clients, all of the offices are set up with furniture and tech, etc.  It would be very difficult if not impossible to replicate the good thing I have going here.  I say "good" but it is still work, after all. :) I do not think I could take an extended leave (like a few years) without closing, as I am the senior partner here and bring in the work that keeps us going. Also, I am at the point in my career where I am starting to become preeminent in my field.  If I put the breaks on it now, I might not be able to get that back.

I could probably get a job as an employee or associate elsewhere if I needed to at some point (although punching a time clock/being responsible for billable hour quotas seems like a G D nightmare).  I could also leave law altogether and help out my spouse at his business (not law), which would increase the family income.

Is this the sunk cost fallacy going on here? OMY? Internalized capitalism? How do I decide what to do? Any advice appreciated.
« Last Edit: June 18, 2021, 09:19:12 AM by CNM »

SeattleCPA

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The last years you work make the biggest difference to your net worth: https://evergreensmallbusiness.com/the-big-benefits-of-entrepreneurial-longevity/   so that's one thing to consider.

Another thing to consider is whether you're indirectly allowing today's rich valuations to scramble your planning: https://evergreensmallbusiness.com/financial-game-plans-for-low-interest-rates/

Then again (look at my age)... maybe I'm just rationalizing? :-)

CNM

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The last years you work make the biggest difference to your net worth: https://evergreensmallbusiness.com/the-big-benefits-of-entrepreneurial-longevity/   so that's one thing to consider.

Another thing to consider is whether you're indirectly allowing today's rich valuations to scramble your planning: https://evergreensmallbusiness.com/financial-game-plans-for-low-interest-rates/

Then again (look at my age)... maybe I'm just rationalizing? :-)

Thanks, Seattle CPA.  I think that I'm at that stage in my life where I'm really strapped for time.  My spouse and I both work full time and we have two small kids, and aging parents, and this and that. So it feels like we are constantly running from one thing to another.  It really makes me think whether the grass might be greener if only one of us had FT employment.

Then again, we are managing fine and we both are happy enough with our jobs/businesses, so continuing on might be the way to go?  I am looking for some perspective on how to even start making a rational decision about this.  There's no hard deadline or timeline either, which is making me default to simply keeping on keeping on.

Paul der Krake

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Assuming the law firm is a well oiled machine, why not downsize hourly commitment to it?

Delegate everything you don't want to do, by hiring another manager if necessary. You'll earn less, but as is often the case with profitable white collar professions, that can still be quite a bit of money for a lot less of your time. And you still have a foot in the door.

Leseratte2021

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Maybe it is possible to even hire another part time lawyer? Maybe give another lawyer mom or dad the opportunity to work flexible and enjoy their family, too?
A friend of mine worked as a part time pediatrician just to cover for vacations / days off of the main doctor..it worked fine, since she had kids herself...

CNM

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Thank you for your suggestions, Paul der Krake and Leseratte2021. 

I will probably need to either hire a new person or look into a merger with another firm to assist in the workload.  A new attorney hire is a big process and I have found it difficult to find good candidates-- my practice area is somewhat niche so I'd need to do a lot of oversight and training, which is time consuming and non-money generating, which is why I'm thinking about merging with another small firm who already practices in my area.

As for adjusting hours, yes, that is something I need to be more committed to. I find it hard, sometimes, to take time off when available time allows.  This is partially due to the odious billable hour model - more hours at work = more income.  And with employees, there is a lot of overhead. Still, this is something I should consider more and actually DO.

Kashmani

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I was in a very similar situation to you in my late 30s. In my case, I was partner in a regional firm with a one-percenter income but crazy hours and a life-shortening level of stress. I was also looking for a way out.

In my case, I made the switch to government four years ago and have never looked back. My income got cut in half, but I am no longer dealing with billable hours and business pressures, and the work is frankly more interesting and more useful for society. Several people who saw me one year in independently commented how much happier I looked. It's not exactly a 9-5 gig, but the work-life balance is much better.

In your early 40s, becoming an associate somewhere is likely unrealistic (everyone wants people with 3-5 years of experience, and closing your shop is likely a one-way street. It took me a decade to build some semblance of a sustainable practice in the first place, and there is no way that in my 40s I would have the energy to start from scratch.

Consider looking into government or agency work. But accept that closing the practice in your 40s is a one-way street.

CNM

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I was in a very similar situation to you in my late 30s. In my case, I was partner in a regional firm with a one-percenter income but crazy hours and a life-shortening level of stress. I was also looking for a way out.

In my case, I made the switch to government four years ago and have never looked back. My income got cut in half, but I am no longer dealing with billable hours and business pressures, and the work is frankly more interesting and more useful for society. Several people who saw me one year in independently commented how much happier I looked. It's not exactly a 9-5 gig, but the work-life balance is much better.

In your early 40s, becoming an associate somewhere is likely unrealistic (everyone wants people with 3-5 years of experience, and closing your shop is likely a one-way street. It took me a decade to build some semblance of a sustainable practice in the first place, and there is no way that in my 40s I would have the energy to start from scratch.

Consider looking into government or agency work. But accept that closing the practice in your 40s is a one-way street.

Thank you for this perspective.  I agree that once I close, I won't reopen... or at least in the same way.  I really do have a good thing going- I am not accountable to anyone other than myself (and our accountant!) for a specific number of billable hours and outside of trial, I do largely have a 9-5 schedule. 

The other partner here, I suppose he is really the "senior partner" as it started as his firm and he's been in practice for 30+ years, has really cut back on his hours and I expect him to quit entirely soon.  I'm going to double down on my networking to either poach a largely trained associate or do a merger, like I mentioned. I already have another small firm in mind to target for this merger idea, so I have to start working the angles and make it happen! :)

trollwithamustache

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Can you bring in a partner? A Sr. person will help unload you.  Probably needs to be some revenue split agreement were they can work like a dog and get paid more.  Later if you want to crank back up you can.

valaraukar

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I'm a 49yo lawyer who has been in BigLaw, had my own small firm, been a solo. 

Here are my thoughts:

1.  A medium/big law firm might take you on as a part-time lateral bringing a book of business, but is not likely to hire you as even a part-time associate, due to your age and years of experience.  In the past 20 years, medium and big law firms have turned their Hiring Committees to junior associates who don't know what they are looking for in a candidate, and those junior associates tend to think anyone 5 years older them them is EWWW, TOO OLD! I personally experienced that recently, and I've heard the same from peers. 

2.  Can you move away from billable-hour work in to flat-fee work? I did that for everything I could when I left BigLaw in the late 2000s.  It opened the door to becoming much more efficient, and billing the same more with much less time expended.

3.  Could you hire a part-time associate attorney who is in the same boat as you?  Someone who is experienced but doesn't want a full-time job, and thus who could take tasks off you? 

 I too am working on a phased withdrawal from the practice of law, into leadership and executive coaching.  I hope you're able to work something out!