Consultancy and the Reality of Self-Employment

Choosing to be a consultant rather than a salaried member of staff is an increasingly popular way of working for solicitors in the 10 year PQE + range. We get quite a bit of interest in roles when they come through to us from firms offering consultancy work, which usually has the advantage of flexible & remote working, good hourly rates, no internal pressure to perform, no office politics, freedom to set your own working conditions, and complete control over matters from start to finish.

This all sounds great, but we often get asked questions by would-be consultants about annual leave, working conditions, tax status, guaranteed hours and time off. How do the two fit together?

If you are contemplating becoming a consultant, you need to be aware that usually you leave the secure environment of being of an employee and join the ranks of the self-employed. Self-employed people enjoy flexibility, freedom to be their own boss, setting rates and much more besides. But there is a rather large trade-off. You are not only the boss, you are also the worker!

Annual Leave? Non-Existent

Annual leave becomes a thing of the past. Instead, if you want to take time off, you either have to take the work with you, find a locum to cover it for you, speak to the consultancy firm about ensuring workload is minimal during this time, or attempt a week or two of firefighting and keeping clients happy without doing very much.

You are responsible for managing your work. Most consultancy firms will expect you to generate your own matters and this means you have to become a business development manager as well as a solicitor. Whilst the consultancy firm may well handle all the billing, it is also highly possible you will need to do your own bookkeeping including invoicing. At the end of each tax year you will need to complete accounts; if you are working via a limited company there will usually be two lots to do.

No Guarantees of Work

Work is never guaranteed for consultants, so if you are expecting a regular income from doing consultancy, think again. Unless you have a large bank of clients to tap into to generate the work, it is highly unlikely you can sit in your office all day and work will just drop into your lap. Business development is a time consuming task with limited obvious gains in the short term, but essential for a lot of self-employed professionals.

If you decide to get locum cover in order to take annual leave, be prepared to spend significant sums of money. We regularly take calls from consultants working at the larger consultancy law firms, looking for locum cover whilst they are take leave. They rarely go ahead with it as I think the cost is somewhat prohibitive. In these cases I believe the consultants have taken the work with them instead.

We asked one of our regular consultants for their thoughts on annual leave and they replied as follows:

“There is generally no cover – all firms I’ve worked with expect you to deal with it. I normally work quite a bit before and let clients know well in advance (and work quite a lot after to catch up). Having someone to use to cover is something I would love to have! When my daughter was born I was only able to take 1 day off.”

Summary

In summary – consultancy is clearly here to stay – consultancy firms are growing rapidly, retiring solicitors see joining one as a great way of continuing to work without the hassle & overheads (see other articles on the thorny issue of succession & run off cover!) and younger solicitors view it as a way of getting more freedom with their work. However you have to bear in mind that being employed does have its advantages in terms of job security, regular salary payments and annual leave. All of which are not available in the same way to the self-employed.