Hiring your first employee as a self-employed lawyer: costs, paperwork and when it pays off

There comes a point in the life of almost every solo practice when the question stops being whether there is work and becomes who does it. Hiring the first employee is the leap from craft to business: it changes the cost structure, the legal obligations and, above all, the way the owner works. It should be done with numbers, not with exhaustion.

When it pays off: tiredness is not the signal

The temptation is to hire when you can no longer cope. The right criterion is colder: it pays off when there is enough delegable, recurring work to keep the new hire busy on a sustained basis, and when the owner's freed-up time can go to higher-value work (business development, complex matters, management). A practical rule of thumb: if you bill steadily above what you can deliver and you are turning down work or degrading deadlines, the cost of not hiring already exceeds the cost of hiring. If the overload is temporary, collaborating with another firm or outsourcing is better than locking in a structural cost.

The real cost: more than the salary

The first mistake is budgeting the gross salary and forgetting the rest. In Spain, an employee's total employer cost typically runs 25% to 30% above the gross annual salary because of employer Social Security contributions (common contingencies, unemployment, vocational training, FOGASA and occupational contingencies). On top of that come onboarding costs (equipment, desk, legal software licences, space), initial training time and, with a junior, supervision, which during the first months is a net investment by the owner.

As a planning reference: a junior on a 22,000-euro gross salary costs the firm around 28,000-29,000 euros, plus equipment. Break-even arrives when that person can take on work that, done by the owner, would otherwise go unbilled or be billed worse.

The paperwork, in order

Before day one: registering the practice as an employer with Social Security (if you do not already have one as a self-employed person with employees), an additional contribution account if applicable, a written employment contract and its communication, registering the worker with Social Security before the start date, and recording the hire with the public employment service where applicable. With the Tax Agency, the practice becomes a withholding agent: filing form 036 with the withholding and payment-on-account obligations (forms 111 and 190), on top of the self-employed person's own obligations.

If you are hiring a lawyer for the practice, it is worth reviewing the special employment relationship of law firm lawyers, which regulates this hiring with particular features and allows specific covenants that differ from the ordinary regime.

Obligations born with the first employee

The practice takes on new duties from day one: risk assessment and occupational risk prevention, working-time records, formal payslips, document custody and, as headcount grows, protocols that the rules require above certain workforce sizes. Most can be outsourced to a labour adviser, but ultimate responsibility rests with the employer.

The invisible change: from doing to leading

The hardest part is not administrative. The first employee forces the owner to document what they used to do from memory, to review someone else's work without redoing it, and to accept that the way they delegate determines whether the hire multiplies capacity or merely adds to it. Those unwilling to make that change usually end up paying a salary to keep doing the same work with less sleep.

On the solo practice ecosystem, see our guides on professional liability insurance for lawyers, sick leave for the self-employed lawyer and the 90-day business development plan.