Back In The Race: Small Law Bonuses And New Year Planning

Since solo and small law practices have unique business models, bonus structures and year-end plans can be quite different from the typical Biglaw routine.

Today is Christmas Eve. Most solos and small law attorneys work only a half-day. The work load tends to be light — tying up loose ends, organizing files, arguing with the accountant, chatting with clients or colleagues, or just generally loafing around in the office. We try to leave in the early afternoon before traffic gets busy. We hope to spend the next 36 hours in peace with no calls or emails from clients, bosses, or opposing counsel. If we’re lucky, it will stay that way until the new year.

I want to talk about two year-end issues that solo practices and small firms deal with. The first is one of ATL’s favorite topics. The other is year-end business planning. I’m sure there are many other year-end issues that should be covered, but I don’t want to leave you with TL;DR rambling on Christmas Eve.

Small Law Bonuses. The ATL staff have covered the Biglaw bonus beat quite thoroughly. But not many people know about SmallLaw bonuses. Since solo and small law practices have unique business models, it is different for everyone. But I’ll try to cover some generalities that I have noticed.

Since solos and smaller firms rely more on the flat fee model and less on hourly billing, bonuses are given at key points in the year, rather than at year’s end. It is not unusual to see firms giving bonuses to associates and staff after winning a major case and collecting the fee.

Now I’m sure that many reputable boutique firms pay Biglaw-level bonuses to their associates. But it’s safe to say that most solos and small firms pay whatever bonus they feel like or whatever they can afford. They are not worried about Keeping up with the Cravathians. Or with each other. Also, because of a lack of reliable public information, small firm associates cannot tell whether they are being shortchanged compared to their peers. And even if they are, they will have to take it because their exit options are more limited.

I have heard that another problem with bonuses in small-law general practice is that it has to be the right amount. If it is too low, you will get a disgruntled employee and his productivity and morale will suffer. But if it is too high, you may be providing seed money for him to quit and do something else. Or worse, start a competing practice. I think the latter line of thinking is suspect because most new attorneys do not want to start their own practice unless they absolutely have to or they are 100% certain that they will make serious money immediately.

Based on personal experience, I think most small firms pay their associates and staff at least a modest bonus to show their appreciation. For my part, I gave my part-time office assistant a sizable bonus for her help this year, particularly when I was working the temp job. If you get no bonus at all under suspicious circumstances, that should tell you all you need to know about how valuable you are to the firm.

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Business Planning. I still have a solo practice. Like most small businesses, solos and small law firms use some of the December down time to contemplate future business plans.

Some of the time is spent trying to predict the next hot legal practice areas. Is a recession coming soon? If so, it may be a good idea to start learning about bankruptcy law and tactics on debt settlement. Or will large business continue its acquisitions of smaller competitors? Then small business M&A law would be the way to go. Will 2015 be the year for comprehensive immigration reform? You get the idea.

The next step would be to get in touch with key people to collaborate with. Meet with other attorneys at holiday parties to catch up, exchange ideas, and discuss the possibility of working together on future projects or even start a partnership. Then meet with mentors or a consultant to determine the risks and potential pitfalls and find ways to avoid or minimize them.

Of course, it will take some time before a firm can decide whether to continue its current course of action or do something different. But the legal profession is currently in a chaotic state — almost to the point of dysfunction — so it would be prudent to be ready for the future.

The Job Search. I’ll conclude with my current situation. For people like myself who have a solo practice but are also looking for a job, we go through the usual routine: search the career websites and check to see if anything new has come up. It is best to apply for any open positions as soon as possible, although you probably won’t get a response until the new year. Career services and some recruiters will have the holidays off, so you won’t be hearing from them.

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So what am I to do in the meantime? Probably not much other than updating my résumé, learning more about the areas of law I are interested in, and contacting everyone I know for job leads. And try to pick up a few clients as well. But at least I can spend more time with family and friends.

I want to wish all of the readers (even the monsters below) a happy and safe holiday season. It’s been a crazy year, but also a lot of fun. I would again like to hear from former solo practitioners or small law partners who have decided to leave their practices for better or for worse. But this time, I am particularly interested in hearing from people of color and how their minority status affected their practice. If you have a story to share, please email me.


Shannon Achimalbe was a former solo practitioner for five years before deciding to sell out and get back on the corporate ladder. Shannon can be reached at sachimalbe@excite.com.


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