This article uncovers why so many attorneys fail as entrepreneurs and business owners and how to assess your chances of becoming a successful entrepreneur to help you decide whether to make the career change.
The Dream of a Law Firm Attorney
Even when successful, many attorneys are unhappy and fed up with the constant race for billing a ton of hours and working 24/7 for their clients. The people in the business world for which they work long hours make them believe that if they owned their own company, they would be much happier. Now, I do not mean opening their law firm. That is a great business idea for many lawyers and can be a successful career step within the legal industry. Many attorneys want to leave the legal profession and open their business in a completely unrelated field.
In one of the first law firms I have worked in, an attorney seemed unhappy practicing law. He was always without energy, complaining about anything and everything around, and just looked like he was not enjoying many things in his professional and personal life. There was just one thing that made him happy - collecting and reselling pinball machines. He dreamed all day about having his small business selling these machines and spent a significant amount of time finding the machines and offering them on eBay. He even stored them in his office.
Even though he was only happy when he was doing things around his small re-selling business, he was well aware that he had a family and a mortgage he needed to take care of. And he knew that it would be very difficult, if not impossible, to do that only with his side business. He continued to practice law and even became a partner in a major law firm and left his pinball machine passion just as a side gig that brought him happiness. He knew that he would probably not succeed as an entrepreneur.
Unfortunately, not all lawyers are as self-aware as this one and jump to the decision to quit practicing law and go into business without enough thought. While there were many cases when this was a good career step and attorneys became successful entrepreneurs, there are even more instances when becoming an entrepreneur ended up catastrophically for lawyers. Law schools and the legal world are not ideal for teaching entrepreneurial spirit. I would even say that the legal practice often goes directly against what successful entrepreneurship looks like. Here is why.
Reasons Why Lawyers Tend To Be Bad Entrepreneurs
Lawyers Focus on What Could Go Wrong, And In Business, You Need To Be Optimistic
Practicing law and running a business are very different in one key thing - they both require a completely different outlook on life and work.Attorneys are taught right from law school how to look for mistakes and weaknesses. They have to be able to spot everything that can go wrong with a decision and have to warn their clients about it. Lawyers think about why something will NOT work. That is the exact opposite of how entrepreneurs have to believe.
Entrepreneurs and business people have to believe that something WILL work. They have to be completely sold on their idea to be able to sell them to other people. They have to be ecstatic about their business and believe it will not fail. They cannot focus on the negatives because it will bring them down.
Entrepreneurs have to be prepared for constant change and uncertainty and have the ability to shake off if they fail and start again. Those are things attorneys avoid at all costs. When attorneys fail, they often start pointing fingers at everyone around them, get into despair, and then give up. They also want to be prepared for everything and have multiple plans to avoid risk in any situation. Entrepreneurs know that failing is just a part of building a business, and they invite uncertainty into their lives.
Attorneys who establish their own business or move to an existing business often do not stay there long-term because the constantly changing environment full of risk and uncertainty is just too different from their experience in law firms. True entrepreneurs keep going even after dozens of failed businesses with the hope that one of their business ideas will succeed. Attorneys often give up because the environment is just not for them and their skillset.
Business People Have To Be Prepared To Be Uncertain
Lawyers are taught from the moment they enter law school that they have to be perfectly prepared for anything. They figure out how to deal with a client's issue but also prepare for anything else that might happen with a plan B, C, and sometimes even plan Z. They cannot underestimate the preparation phase and have to be always ready for the unexpected.
Successful entrepreneurs, on the other hand, accept uncertainty and thrive in it. Uncertainty and ambiguity are with them right from the start because when you are starting a business, you can never know how successful it will be. They see an opportunity in a market without knowing how it will turn out and they go for it. Attorneys take steps to prevent anything uncertain from happening.
Attorneys Believe That They Should Be Successful Because of Their Background/Intelligence, Business People Know Success Is Not About Credentials
Attorneys in the law industry place a lot of importance on their intelligence and the background credentials they have achieved. They believe that because they went to a prestigious law school and did well there, they deserve to be successful not only in the legal profession but also in the business world. However, this knowledge and the skills that lawyers use while practicing law are not what bring success in business.
Entrepreneurs have to have a constant stream of new ideas, they have to be able to adapt and change to different situations. They are great at promoting and selling their products and ideas and also know how to find and manage people who can help them achieve their business goals. These skills are not something you can learn in school and they are very different from the skills needed to succeed in most law firms. There are a lot of successful entrepreneurs who have never gone to college or even finished their high school education. Lawyers often do not see this stark difference and many are not able to develop the business skills needed for success even after years.
Law Firm Attorneys Do Not Know the Struggle for Money That Often Fuels Entrepreneurs
Attorneys in law firms have a paycheck they receive every month in return for the work they do every day. They sit behind their desks or meet with clients and they use their brains to provide the best legal services for their clients. Their law firm provides them with nice offices, support staff, benefits, and bonuses that give them quite comfortable work life. They can be sure that as long as they are working hard for the firm and the law firm is doing well, they have a secure legal career and enough money for themselves and their families.
On the other hand, entrepreneurs have to often really struggle for money. They have to think about paying their employees, investing in marketing, and product development, and have to also think of what will happen if one of their business ideas they invested a lot of effort and money in fails. They have to think really hard about where to spend their money and make many difficult decisions. They often go long periods of time without paying themselves and put all of the money they make back into the business.
They have to be prepared to come up with new ideas all the time because they never know what will happen and can very easily go bankrupt. And once such failure happens to them (and it always will), their hunger to succeed grows and fuels them for their new business ventures. Most lawyers do not have these same experiences, so they do not have the same fire and hunger that motivates them to do more. They do not have the experiences that could teach them where to invest and where to save or what is the most important thing to focus on to develop a successful business.
Marketing Is Not the Strong Suit of Most Attorneys
Marketing is not only something lawyers are not taught in law school or in the actual practice of law but many of them even consider it as something negative. The good name and reputation of a law firm should be enough to attract clients, right?
This is a mindset people in the business just cannot have. Businesses, especially new ones, need to market themselves to get their name out there. Marketing is, in fact, one of the most important aspects of running a business. Business people have to always think of ways how to attract customers. They have to constantly post ads, think of social media marketing campaigns, meet with potential customers in person, and attend conferences and fairs to meet people and gain new customers. This is something that never ends for businesses because they need to be attracting new customers all the time. With a good marketing campaign, a business can keep selling even average products or services.
Attorneys tend to struggle with marketing because they are afraid of looking bad or stupid inf front of others. They do not want to stand in front of a crowd of people and sell them their products, they are used to gaining clients through referrals. However, to be a successful business person, you have to be great at marketing.
Most Attorneys Are Not Great in Customer Care
The law and the legal industry are generally very clear and set. Lawyers are here to know the law, understand legal issues, and give legal advice to their clients based on the facts they find. Although they have to be able to talk to people and get on with them to keep clients, they do not really have to have a lot of customer service skills.
Good entrepreneurs need to be great at customer service. They need to understand their clients' perspectives and want to deal with and solve any issues their clients have. Lawyers can care more about the law than their clients; however, for entrepreneurs, their customers have to be the most important thing.
Managing Others Is Not the Strong Suit of Many Lawyers
Managing people is not a huge focus in law schools or law firms. Attorneys are compensated based on how many hours they bill and their ability to manage others is not incorporated into their compensation plan even though senior associates and partners often have to manage a lot of people under them.
This form of non-existent or bad management sometimes results in attorneys not being satisfied with the conditions they have at work and even leaving the law firm to go somewhere else. Many of these senior attorneys consider associates under them to be worker bees that should put their heads down and continue working because this is how their superiors approached them before they advanced.
If attorneys take this approach to management in their new business, it is a recipe for disaster. Successful business owners know that they have to build relationships and create a positive environment for their employees if they want their business to run smoothly.
Law Firms Are Generally Not a Place Where Attorneys Can Learn How Businesses Are Run
In law firms, only the top partners are usually included in any business decisions or even exposed to the business side of the law firm. Most attorneys have no idea how their firm hires and fires attorneys, where they spend most of their money, how high the firm's revenue is, where the firm struggles the most, or what are the plans for the next year.
With zero business experience, it is very difficult for attorneys to find jobs in big and successful businesses or start on their own. This inexperience is something that can really hurt a business and even though many of these attorneys go into business school to gain some knowledge, the most important things can only be learned through real-world business practice.
Attorneys Tend To Have a Follower Mindset Which Is Not Useful in Business
The legal industry is generally a safe work environment without a lot of unexpecting things happening. Of course, there are fluctuations in how active practice areas are and law firms go bankrupt and new ones are created daily. However, apart from that, lawyers know exactly what they are getting themselves into once they get their law degree. Law firms do not really encourage people with innovative ideas and do not want to change their established ways of doing things.
Businesses are about doing things differently. Successful businesses are almost always built by people who have found a way how to do things better or how to start doing something that has been not done before. That cannot be done by someone who is simply following instructions and set ways.
Are You Fit for Starting a Business as a Lawyer?
While, as you saw, there are many reasons why lawyers are not in the best position for becoming entrepreneurs, there are many attorneys who can do so successfully.
In fact, there are many attorneys in the legal world that are already doing things like business people:
Senior Attorneys and Partners With Their Own Business
As attorneys get more senior and become partners, they become responsible for bringing in their own business. They get the majority of the revenue they created in return for the firm's offices, support staff, etc. If they are not okay with the conditions they have, they can either negotiate an arrangement that fits them more or can switch firms to find a place with better conditions.
Having so much control over work often results in these attorneys being much more excited about their work and their work commitment grows as well.
Starting a Law Firm Is Running a Business As Well
Attorneys who like practicing law but also want to run a business can do so when they start their own law firms or solo law practice. Many attorneys become very successful by opening their own firms and can earn millions every year doing so.
It is a great business model for attorneys who enjoy practicing law. They already have the product - their own mind and legal skills. Most of the attorneys already have a contact list and sometimes even clients who are willing to go with them. If attorneys want to get into business, this is often the best way for them to do so.
Starting a Business Not Related to the Practice of Law
However, there are also many attorneys who really do not enjoy their job and hate practicing law. If this is your case, and you really want to quit practicing and go into business not related to law practice at all, the first thing you should do is think. Leaving the practice of law, especially if you are going into business, means leaving it for good. It is very difficult to get back, so you have to be absolutely sure being a lawyer is not for you and you never want to get back to it before you leave.
Once you have determined that practicing law is not for you and becoming an in-house counsel or changing your practice area or law firm would not help, you can start thinking about going into business. There are so many business ventures you can go in that almost everyone will find something they can succeed in. Some former attorneys open restaurants, others have businesses washing windows, or selling imported toys. The possibilities are endless and you can become successful in any of them. For instance, before I went to law school, I had my own asphalt contracting business and was earning very nice money very early on in my life.
Thanks to my legal recruiting work with BCG Attorney Search, I come into contact with attorneys from all around the country. Among them are also attorneys who went on to start their own businesses. Those who became successful have a few things in common. Even when they were practicing law, they were constantly coming up with new business ideas. They had a constant stream of thoughts they wanted to turn into businesses and excitedly talked about them with everyone who was willing to listen every day. They always seemed more interested in these ideas than in their work in the law firm. When their risk-averse colleagues pointed out why something would not work, they thought of ways how to deal with these obstacles. They saw opportunities behind every corner and they were very optimistic about all of them. They were also almost always those who wanted to be the ones doing things, not the ones providing legal services to those who do things.
If these characteristics perfectly fit you, you might be the perfect candidate to become a successful entrepreneur or small business owner. You should never stay in a job that makes you unhappy, so if practicing law is really not your jam and you found yourself in the description of successful business people, you might start thinking about which business idea to try out first.
Conclusions
The law industry is not the best place to gain business-related skills. In fact, many of the ways so enshrined in the practice of law go completely against the business mindset. However, that does not mean that lawyers cannot become successful business people. Many attorneys turned entrepreneurs become very successful and earn a lot of money after they leave the practice of law. But not every lawyer is fit to do so. And because it is so difficult to return to the legal industry after leaving, every attorney considering this career change should think twice about whether it is the right step for them.
