Wednesday, June 06, 2007


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.


Anonymous said...

In private practice in counseling, the nice thing is you can choose who you take and don't take as clients. Also, if you're private pay (not taking health insurance payments) you have a WHOLE LOT less paperwork to do.

The biggest problem with private practice counseling, for me, is that it's lonely. It's amazing how much effortless socializing goes on at work, even for the hardest workers. For me, that's the biggest factor in why my practice hasn't grown to full-time: I don't want it to!

Annette said...

I think I've found the best of both worlds with my yoga instruction. I'm a sub-contractor, which means I'm basically self employed, but I have a steady gig at a local yoga center where the owner takes care of all the student registrations and just gives me a check every two weeks.

But years ago I operated a struggling photography business out of our home. Clients called at all hours and since they knew I worked from home, I would take their calls. This was before answering machines became a big deal. There were no regular business hours. If a client needed to do a portrait shoot in the evening, I did it. All weekends were taken up with weddings. After five years, I'd had enough and sold all my equipment. It was a long time before I even touched a camera again.

Yep, going it alone definitely ain't all it's cracked up to be.

Anonymous said...

Amen, Gina!

When I went solo, I learned that self-employment is hard. Really hard. Time is money. If I don't work, I don't get paid.

Also, when you do your own taxes and actually see how much you have to pay to the government when you're self-employed, it can be very disheartening.

But there are also a lot of perks, like being able to work in your PJs and not having to deal with office politics. I always try to think of the positive.

Anonymous said...

Ah, the joys of owning one's own business. I remember it well - well, but not fondly.

Several years ago, my wife and I opened a gym where I also taught Aikido, trained executive bodyguards, and presented self-defense classes for women. We employed three aerobics instructors as well as a few clerks. It was a very nice place.

Well, as if that wasn't enough punishment for me (I was still working full-time as a police detective) I started a small remodeling business, then a music store and a computer store - all at the same time. I suppose I was planning for when the time came to leave police work.

Business was so good with the construction company that I expanded. I hired more people and bought more tools and equipment. Then I needed more vehicles and a building to store materials and tools. The projects just kept getting bigger and bigger, AND BIGGER!

My poor wife was handling the books for me. I say poor wife because she was in graduate school at the time. She was also ready to kill me so I hired an accountant to do the books and an attorney to keep it all straight and orderly, and I invested in a huge bottle of Pepto Bismol.

It wasn't too long before I was just plain exhausted so I turned over the construction company to my brother and sold the other businesses. It was a relief to rely on something that was a lot less stressful, police work. At least getting shot at, stabbed, cut, and spit on was something I enjoyed.

Anonymous said...

Lee: Who would think that police work would be less stressful than owning businesses. LOL!

Your poor wife! My husband is an accountant, so he handles all my finances and books. I suspect at times he wishes I hired someone else to do it. (grin)

Anonymous said...

I liked being self-employed as a freelance writer when my kids were little. (Lucky me, I had a gainfully employed spouse with a nice, regular salary and benefits, and we didn't *need* my income to pay the bills, so if I made $30K one year and only $3K another year, it was no big deal.) I used to fantasize about how nice it would be when the day came that I didn't have to worry about the demon spawn screaming and beating the crap out of each other while I was on the phone with a client. But in reality, once the kids were in school and I was alone in the very quiet house all day, forget it. I couldn't take the isolation and had to go find a real job in an office with other human beings to preserve what the kids left me of my sanity.

Anonymous said...

Police work is also less stressful than raising children, air travel, shopping, shuttling a car load of screaming kids to ball practice, and driving in Seattle. I'd rather take a bullet any day.

Anonymous said...

Lee, honey, the bullet talk is just plain scary.

I've been my own boss for a lot of years. I can snack or nap or work or not work when I feel like it. (Of course, it doesn't take long to figure out that if you don't work, you don't get paid.) Unfortunately, those work habits have made me totally unfit for the real world. If I had to get a real job now, I think I'd have to be a greeter at Wal-Mart. And I'd probably be the world's worst greeter.

Anonymous said...

It's just an expression. If it'll make you feel better I'll switch to...let's see... How about this. I'd rather chew broken glass and listen to Barry Manilow sing than to deal with some of the hassles of owning a business.