BusinessWeek published an article on the "homepreneur" and the economic statistics it provides in the article are amazing. Specifically, did you know that we that work from home and collaborate with others account now for more than half of all business in the United States and employ more people than venture-backed companies.
So, the question really is, why are you as an attorney or legal staff still pursuing work in a dying, industrial-style system? We as Americans, like it or not, are going freelance. We are, love it or hate it, becoming carpet commuters.
This, to me, is one of the reasons I just hate this insurance debate going on presently. All you hear about is the concept of people being allowed to stick with your own company, or forcing coverage through large scale employers, when much of this matrix either does not exist any longer, or it will not in the not too distant future. Most big firm and big company employees do not have a health care problem because the employer has been eating the ever increasing losses. The problem is that this benefit is increasingly not true for most of us, and in reality that type of insurance no longer exists, even if you want to buy it, for us spare room tycoons.
It is also the reason that I hate the law school tuition bubble. It is based upon recruiting and training lawyers to get jobs -- but not teach them how to practice law -- with larger law firms, in-house, and government agencies. Law schools ignore the likely outcome of most of their graduates -- solo practice -- small firms -- collaborative practices.
Of course, when BusinessWeek talks in terms of the "homeprenueur", it is referring to us Third Wave attorneys.
As indicated in the article, the time is coming when we home-based attorneys and business people can no longer be viewed as eccentric or dismissed as quaint hobbyist.
An estimated 6.6 million home-based enterprises provide at least half of their owners' household income. Together Third Wavers employ one in 10 private-sector workers.
I am not even sure this figure is correct. I think the figure of those that make their living at home is even greater. Just in my neighborhood alone, there are a good many people that work from home, and I do not mean Mary Kay people. I know many lawyers that work from home most of the time.
The Internet, broadband in the home, cloud computing, online collaboration, and smartphones have accelerated the trend.
Just listen to some of these statistics. The 43% of home-based businesses that provide at least half of the owners' household income are, on the whole, smaller than non-home-based companies. Only about 35% have revenue above $125,000, compared to 75% for non-home based businesses. But they measure up to other small companies on key aspects of doing business, including access to capital, benefits to workers, marketing, and innovation. On average they have two employees, including the owners, and together they employ more than 13 million people—more than venture-backed companies, which employ 12.1 million people in 2008. In some of these companies, the operations are concentrated in the owner's home. Others use their residence as a headquarters but do most of their work at clients' homes or offices. The variety of home-based businesses cuts across industries, but the top sectors are business and professional services, construction, retail, and personal services (such as law).
As a result of this trend, there has been a change of consciousness in the business world to recognize home-based enterprises as legitimate.
Well, the most obvious financial benefit for home-based entrepreneurs is lower operating costs. A 2006 SBA study compared tax returns of sole proprietors who deducted home-office expenses with those who deducted commercial rent. That analysis found that home businesses, on average, had lower sales and net profits than companies in commercial spaces. But profitable home-based ventures retained a greater share of their total receipts as net income: 36%, vs. 21% for non-home-based businesses.
As we have been saying, I think what you see here is an trend that will continue to grow, and grow, and grow.