How to become a self-employed lawyer

Becoming self-employed gives you freedom about when and how you work, as well as who you work for. Self-employment is an exciting opportunity, but how do you get started?

We’ll look at how to become a self-employed lawyer by looking at the following areas:

• Become a qualified accountant 
• Set up your business
• Notify HMRC of your tax status
• Get insured and licenced
• Find some clients

It takes years of study to become a fully qualified lawyer or solicitor. Typically, you’ll finish a Solicitors Regulation Authority (SRA) approved undergraduate degree that is recognised by the legal industry.

After you gain the degree, you’ll need to complete the Legal Practice Course (LPC) or the Diploma in Professional Legal Practice (DPLP) if you plan to practise in Scotland. This postgraduate course allows you to build on the theoretical knowledge you’ve gained in your degree to understand real-world scenarios and legal experiences.

The final stage in the qualification process to become a solicitor is to undertake a “training contract” where you will work as a trainee at a legal firm (or any other authorised organisation), usually for two years, to gain practical work experience. Once you have completed these three stages, you’ll be classed as a qualified lawyer.

It’s a good idea to register with the Law Society when you plan to start your business. There are separate societies for England and Wales and Scotland. Having their accreditation can lend an element of trust and authority to your services if you are setting out on your own.

Always keep abreast of changes in industry standards and professional regulations too. This includes data protection legislation (as you’ll be keeping information about your clients) and anti-money laundering laws so you can remain compliant with any transactions you handle for clientele.

To take the first step to set up the business, you need to choose your structure. Will you be a sole trader, a limited company?

For legal services, a limited company may give off a more professional image and give you limited liability for any debt associated with running the business. But being a sole trader is a simple structure to manage, with fewer financial reporting obligations.

If you choose to be a sole trader, you’ll need to register as self-employed with HMRC as you’ll be managing your own taxes. 

If you have chosen to trade as a limited company, you’ll need to take the following steps:

• Incorporate your business with Companies House. This registration online will cost you £12. Always check that your business name is available, or you could face legal issues.
• Contact HMRC to inform them of the change to your company structure and register as an employer.
• Set up your salary payments through PAYE as you’ll be paying yourself as an employee. 
• You’ll also need to register for Corporation Tax and VAT if your business is likely to turn over more than £85,000.
• Set up a business account if you haven’t already got one. Limited companies legally must have a separate current account.

Nowadays, it’s simple to work remotely without having to meet clients face to face, so you could operate from home without an office, with little equipment. Consider if you’ll need to purchase the following items as part of your start-up costs:

• A computer or laptop
• Back-up hard drives
• Accounting software or legal programs to support paperwork
• A printer and paper
• Postage costs
• Storage cabinets
• An additional telephone line

You can learn more about how to plan for managing start-up costs in this guide.

You may find it challenging to find work without professional indemnity insurance as a self-employed lawyer. Professional indemnity protects you against claims made by dissatisfied clients if you are accused of professional negligence. The insurance would cover compensation for clients, as well as legal fees if you were sued for any mistakes. 

You likely won’t be able to work freelance for another firm without having this protection in place. 

We’d recommend you also look at:

• Public liability insurance – protects you if a member of the public claims they were injured in dealing with your business, at your place of work, or your work caused property damage.
• Business interruption insurance – provides financial assistance for lost revenue if you can’t work in your office because of fire, flooding, or other eventualities. You’ll need separate cover if you are unable to work due to illness or injury.

Superscript offers excellent business insurance cover for affordable prices.

After taking these steps, you’ll be ready to start trading — so you need to find clients. An excellent place to start is to reach out to your existing network of friends, family and acquaintances. These people might need your services themselves or know someone who does, and research finds that 92% of customers trust a referral from someone they know.

You might choose to offer general legal services or have a speciality. Selecting a niche could be valuable as you can attract specific clients by mentioning your chosen area in your marketing materials. For example, you might specialise in family law or property. Or you could choose an industry to work with, such as offering legal services to retail or FMCG businesses specifically. 

You’ll also want to create a professional website that potential clients can visit to learn more about your services. Websites builders like WordPress or Wix have free templates you can use to create a simple website.

Here are some marketing methods you can use to spread the word about your services:

• Offer vouchers for a free half-hour of your time for referrals or new clients.
• Use digital marketing techniques such as local SEO for finding clientele in your area and content marketing to show your expertise.
• Use social media, especially LinkedIn, to build credibility with other businesses, potential clients, and other lawyers.
• Attend events in your chosen specialist industry.
• Use offline marketing such as flyers, business cards or newspaper ads.