Before I went to law school, it was my dream that one day I'd have my own firm. I imagined a big window office in downtown L.A., with fancy furniture and beautiful artwork to fill the white spaces between the bookcases that lined the walls. I thought that maybe I'd have at least two associate attorneys, a secretary, a bookkeeper, and several law clerks that worked at various periods during the year. It was a realistic dream, I thought, since there were a lot of large law firms, some with over one hundred employees, and all I wanted was at most five. I can handle a firm with five employees. All I needed to do was be someone else's associate for ten years, earn enough money to pay off at least half of my debt, and of course, learn the skills needed to be my own boss.
Life did not turn out as I planned. When I graduated, jobs were scarce in the specific area of law that I wanted to practice. Fortunately, I knew enough attorneys who were willing to give me assignments to work on, appearances to make, and even got me appointed to assist on some serious (meaning death-penalty serious) cases. So, I was busy, working 60-to-80-hour weeks. And before I knew it, one year, then, two, three, four years had passed, and I was a self-employed attorney. I have been for over ten years.
But, I didn't intend to be self-employed so early on in my career. There were student loans to be paid, not to mention, rent, food, insurance, and on occasion, I like to travel. And because I didn't really "plan" on being self-employed, I wasn't prepared for all the not-so-pleasant mechanics it entailed.
(1) Taxes, taxes, and some more taxes. Just to let you know upfront, I'm not by any means a tax protester. I do not mind paying taxes. I actually believe it's a necessary part of our government, our society. But, aside from filing my yearly tax return, taxes was not something I thought about very much. Not until the April after my first full year of being self-employed. That was when I realized that the numbers that appeared on my vendors' checks didn't all belong to me. About 40% belonged to Uncle Sam because when you're self-employed, which means no one takes money of your paychecks, you also have to pay what is called self-employment tax. So, basically, you'll owe a lot more in taxes, and I wasn't prepared for that. It has been a very painful lesson.
(2) You'll no longer be just you, but several different versions of you. Remember my dream of having two associates, a secretary and a bookkeeper? Well, unless you had also prepared yourself financially to employ those people, unlike myself, you'll end up doing all the work that was meant for them. So, in my case, on top of being a lawyer, I have to be a secretary, receptionist, bookkeeper, filer, messenger, and all the other important roles that make an office function. This leads to the next item.
(3) Unpaid overtime is something you need to get used to. When I tell people I'm self-employed, the first thing they usually say is how lucky I am to never have to clock in. I can work anytime I feel like it. And it's true. The flexibility with being self-employed is great. I'm not going to deny that. But, if you want to be able to pay your rent or mortgage every month, you do need to put in the hours, and the hours are long. Because like I said, you're usually working several jobs in running your office or business, and usually, only one (or two) of those jobs really pay. As a lawyer, I only get paid for the hours I'm actually working on a case. The two or three hours a day I spend managing my business, i.e. organizing files, bookkeeping, along with the hours I spend staying updated on the law (studying), all those I do for no compensation. Thus, the hours can be very long.
(4) "Sick" and "vacation" will be lost from your vocabulary. When you're self-employed, you start thinking that you must always be open for business because otherwise, you won't get paid, or worst, not have a business to return to. So, even if you're sick, you show up. Since the idea of taking two weeks off is terrifying, you don't do it. But, this is where I tell you that you must. Take at least a one-week vacation once a year. Two weeks is even better. It took me many years, but I finally learned the art of vacationing while being self-employed. But that will have to be another post.
(5) There will be slump time. In the beginning of my self-employment, I was so busy that I didn't think of applying for jobs or seeking out more work. I was fortunate that assignments and cases were just handed to me from my small network of attorneys that I was working almost the equivalent of two full-time jobs. So, I wasn't prepared when the slump happened. But, they do happen to most businesses and industries. Times and circumstances change, and just like there are highs, there will be lows, and you need to be prepared for those lows. When it happened to me, I was terrified because I couldn't afford not getting a certain amount of money every month. I needed money in the pipeline. And it was during those desperate times that I realized the importance of marketing, networking, and having several sources of income. Yes, they added to my list of job titles and positions, but they were necessary if I wanted to stay self-employed and survive through another slump.
(6) No one will take you seriously until you take yourself seriously. Being self-employed requires a certain mindset, i.e. discipline, especially when your office is at your home. Something about working from home makes others think you're not really working. Suddenly you become the person friends or family call during their breaks or midday drive from a doctor's appointment. You become the first person they think about when they need a ride to the airport in the middle of the day, or need to pick something up from the store, or need someone to review their resume right before they send it off. And you start feeling that you can do all those things because there's no one telling you not to. In fact, you had just put in two loads of laundry into the washer before logging on to your computer. But, you can't do those things, at least not all the time, because you need to work and you need to pay your bills. So, what I found useful in making others take me seriously even though I'm working in my PJs (they don't have to know that) is actually starting my work day at the same time the majority of people I know start their work day. Yes, I can sleep in until 10:00 a.m. and start work at 12:00 p.m., but I don't. I get up early as if I need to be in the office by 8:00 a.m., and I try to start working no later than 9:00 a.m. Once I implemented this, and my friends and family saw that I was serious, they took me seriously, too. But, that first year was tough.
(7) Which is why you need to be your toughest and most demanding boss. Because being self-employed means your business rises and falls with you. There will be days you don't want to show up, and since no one is there to check up and reprimand you for being late or absent, it's easy not to. It's one of the best parts of being self-employed - having control of your time, the flexibility. But, a good boss is a tough boss who looks out for the well-being of not only the company but also its employees. To ensure that the employees continue to be compensated the company must continue to make money. When you're self-employed, the boss, company, and employee is you. So, you need to be tough. You need to show up and do the best work you can. And you'll never be unemployed. (You may experience a slump from time to time, but never unemployed. Unless, of course, you fire yourself.)
And I'll end on this note, being self-employed is hard work, but it has been worth it. If you didn't get this from my post, I love what I do, despite not having the fancy furniture and expensive artwork and a staff. It takes a lot of discipline, not only in working to make money but in spending money, because there will be weeks and months that you may not get an income or make any profit, but it's doable. You just also have to know that it may take a few years until you actually feel like you've made it, but it's possible.
Disclaimer: These lessons come from my personal experiences as a self-employed attorney in a one-income household. So, your experiences may be different depending on what industry or life circumstances you're in. Whatever the case, I hope it has given you insight or at the very least, some things to ponder on, if you're thinking of branching out on your own.
