How Much Do Solos REALLY Earn?
As much as they want to. That is the reality of solo life.
There was a recently published chart on solo practitioner earnings which I had seen when it was first published but chose not to post it for my readers because I would have had to spend too much time challenging its validity.
You can see it at MyShingle under "What Solos Earn" along with Carolyn Elefant's observations of those salaries. The sampling is only 244 nationwide. (More than 51% of all private practitioners in this country are solos and there are over 750,000 private practitioners from over 1.1 million lawyers!) So, this chart is not only not even close to being a representative sampling, it is very irresponsible because solos and those thinking of soloing can be misled. (Let me clarify. The chart is irresponsible, not MyShingle. Carolyn Elefant notes the unscientific nature of the chart and makes some good generalized comments along with the posting.)
There is no description of how these solo practitioners were found or screened, what they were asked, or what variables were taken into consideration. It also discusses "median" salary, not average. Median means if there are five solos reporting (and some of these numbers are based on just that, five solos), it could go something like this....Solo #1 $25,000, Solo # 2 $40,000, Solo #3 $46,000 Solo #4 $225,000, Solo #5 $300,000. The median would be $46,000 and that is what is reported. The average, however, would be $127,200. Then, again, we don't know if Solo #1 and Solo #2 are doing it part-time, or in fact spent half their year unexpectedly disabled.
My favorite chart shows the median income of (5) solo attorneys working in firms of 100-499 lawyers earning a median income of $200,000.
(Go back to the chart, scroll to the bottom and look under "Median Salary By Lawyers in Firm."). (17) reported as solo practitioners working in firms of 17-49 and (134) working in firms of 1-9 Lawyers. Do these statisticians know the definition of "solo practitioner?"
The reality is this: unlike associates who earn what their employers pay them, those salaries publicized and reported and easily quantifiable, a solo's income is dependent upon numerous variables and both professional and personal choices in the solo's life. The metric remains the same, however. Solos sell their time. There is only so much time they can sell. They can choose to sell all of it or part of it. When they reach their individual maximum they can choose to bring on another and sell that person's time and take a percentage. Or they can increase their profits by increasing their rate and/or reducing their overhead. Or they can do all three.
My experience and those I've consulted generally follow a similar pattern. Starting fresh, right out of the chute with no hip-pocket business, their second year income doubles their first (all things being equal year-to-year). Then it increases by half, yet again. By year three most I know are outpacing associates in all Big Law firms within their practice area and geographic area providing they are at it full time. Then there is a leveling off as the solo starts to reassess in which direction they are going to head with their business as well as their life.
Not all solos choose to make millions or build empires but simply want to sustain themselves in the lifestyle with which they are happiest. Not all solos choose to sell all their available time. Some solos choose to sell some time, donate the rest of their time. Some solos choose to sell some of their time and spend the rest of their time on non-legal or non-work related matters.
So, repeat after me..."A solo earns as much as they want or need." It is up to them.