In 2019, small firm lawyers have incredible amounts of opportunity. Technology has leveled the playing field, making it easier than ever for small firm lawyers to compete with large firms in ways never before possible. By streamlining their law firm’s processes and increasing efficiencies using affordable legal software, small firm lawyers are able to take on an increasingly broad array of practice areas, allowing them to find success on their own terms.
Of course, the path to success for small firm lawyers is varied and no lawyer’s is exactly the same. In fact, according to the results of a recent study, small firm lawyers’ career paths and opportunities run the gamut, and vary greatly depending on geographical region, practice areas, earnings and more.
Variations in compensation
Good news! Small law firm earnings have increased overall in the past year. The survey results indicate that the mean earnings for the lawyers surveyed increased from $194,000 in 2017 to $198,000 in 2018. Similarly, the median earnings likewise increased from $135,000 in 2017 to $140,000 in 2018. Also notable is that 19% of attorneys reported that over the past year, their earnings derived from legal services increased by 10%. Another 30% reported that their earning from legal services increased by up to 10%, and 31% reported that they remained the same.
The top 5 most profitable practice areas in 2018 were:
- Medical malpractice ($267,000 on average)
- Personal injury ($254,000)
- Worker’s compensation ($226,000)
- Intellectual property ($224,000)
- Business ($218,000)
Finally, a full 67% of lawyers surveyed reported that they felt fairly compensated for their work
How does your compensation compare? Are your practice areas proving to be profitable? Do you feel that you’re being fairly compensated?
The survey results showed a clear geographical disparity in regard to compensation. Lawyers in the Western region (CA, HI, AK) lead the way and earned the most. The Mid-Atlantic region was next followed by the Southeast, and then the Northeast.
Here are the earnings from the past year derived from billing legal services by region:
- West ($222,000)
- South Central ($203,000)
- Mid-Atlantic ($194,000)
- Southeast ($194,000)
- Northwest ($189,000)
- Great Lakes ($186,000)
- North Central ($184,000)
- Southwest ($178,000)
- Northwest ($170,000)
How do the earnings of lawyers from your firm compare? Are they greater or less than those of lawyers in your geographic region?
Day-to-day law practice activities
According to the report, the majority of lawyers continue to rely on hourly billing for their cases, with 75% reporting that they bill by the hour. Next up was flat fee billing at 44%, followed by contingency billing at 33%.
The majority of lawyers (75%) reported that less than 20 hours per week was spent meeting with or appearing in court with their clients. Criminal defense lawyers spent the most time each week meeting with clients (on average 20+ hours), and intellectual property lawyers spend the least (on average less than 10 hours).
Billable work that did not include client interaction constituted more than 20 hours of a typical lawyer’s work week, at 75%. Next up was 18% of lawyers who spent 10-19 hours on that type of work, with only 6% reporting that they spent less than 10 hours on billable work of that nature.
Finally, when it came to non-billable work, a whopping 70% of lawyers reported that they spent less than 10 hours of their work week on that type of work. Next up was 22% of lawyers who spent 10-19 hours, followed by 5% who spent 20 or more hours, and then 3% who reported that their entire working day was billable.
The top challenges faced by the lawyers surveyed ran the gamut, with 23% of lawyers reporting that difficult clients topped the list. Next up was business development/generating new clients (17%), long hours worked (17%), administrative tasks (12%), collecting money owed (10%), going to trial (6%), and marketing (6%).
And last but not least, many lawyers find that their client relationships are what motivate them the most. 33% reported that the most rewarding aspect of their work was gratitude/relationships with their clients. Also important for 12% of respondents was knowing that they helped to make the world a better place.
How do you spend each working day? Are you wasting time on non-billable work? Are there ways that you can utilize legal software and/or delegate tasks so that you can devote your energies towards billable tasks?
Lawyers aren’t all work and no play. In fact, the survey results showed that leisure time is important to them. Top priorities outside of work included family time, travel, and exercise. Here are the top 10 leisure pastimes for the lawyers surveyed:
- Spending time with family (75%)
- Travel (41%)
- Exercise/physical activity (36%)
- Reading (27%)
- Food and wine (26%)
- Cultural events (18%)
- Golf (11%)
- Hunting or fishing (8%)
- Musical activities (7%)
- Social media (6%)
Any you’d add to the list? Are there any that surprise you?
And last but not least, the lawyers surveyed were asked whether, if given a choice, they’d choose law as a career again. The vast majority said they would (71%). 74% reported that they’d choose the same practice area(s), and 57% said they’d choose that same work setting.
What about you? Would you do it all again? What would you change?