by Gina Sestak
In the mid-1980s, I hung up a shingle and entered into what is called a "solo practice" of law. Like many people who had never been in business, I had unrealistic expectations about being self-employed.
Self-Employment Myth No. One: Your time is your own. Not true - you work 24/7, and your time is structured by your clients' needs. You can't take the day off when there's a hearing scheduled, or close the office early when you're working to meet a deadline. I should mention that most legal work has very strict deadlines. If a brief isn't filed on time, you lose the case. If a case isn't filed on time, you waive your rights. Legal deadlines are not like when Mommy and Daddy say, "Be in by midnight," and you know that everything will be okay if you show up at 12:01. Legal deadlines are like when the terrorists call and say, "The building will blow up at 2:00." If you lollygag around until 2:01, you won't survive.
Self-Employment Myth No. Two: You get to keep whatever money you make. This one goes hand-in-hand with, "You can charge a lot of money." People who have only been employees often don't understand the difference between an hourly wage and hourly charges. An hourly wage is yours to keep, after your employer has graciously deducted all applicable taxes. An hourly charge makes up the total income of a business. Office rent, equipment, supplies, business taxes, etc., etc., come off the top before even a penny gets to you. Then you have to take a substantial portion of the paltry sum that's left to pay your own taxes, including much higher social security tax because you're paying both the employer's and employee's share. And it's impossible to budget when you never know from month to month how much money will come in. My net monthly income ranged from $242 to $2500.
Office rent is a big expense. Early on, I shared space with a group of other lawyers who had rented one floor in a building. The rent was relatively cheap. You get what you pay for. At one point, I was in a square office that had previously had a secretarial station carved out of one corner. The station walls had been removed but, since the light switch had been on one of the now-missing walls, the light switch hung from the ceiling on a cable and would swing distractingly. Later, I entered into a time-for-space arrangement with a friend from law school whose solo practice was better established. I got the use of an office and access to computer equipment in return for working on her cases a set number of hours per week.
While in private practice, I handled a wide variety of cases, everything from child support to felonies. It's very scary being responsible for such important things in peoples lives, and knowing that any mistake you make can result in them losing income or assets, losing contact with their children, or losing their freedom.
I left private practice at the end of 1985 and went into another business, but that's a story for another blog.