The 12 Most Lucrative Practice Areas for Small Law Firms
The legal industry and delivery of legal services is shifting, including the income potential for attorneys. According to industry data, the most profitable practice area for lawyers in 2020 is medical malpractice with a median annual salary of $165,266.
To get a full understanding of what areas of law are the most lucrative, we analyzed leading salary and industry reports and have compiled a list of the leading practice areas in terms of compensation. Here are some key takeaways from our findings:
Key Takeaways
- Using industry data and salary reports, we compiled an income summary report for the top 12 practice areas.
- Salaries and compensation can vary, dependent upon a range of factors.
- Still, women come up short and are earning 35% less than their male counterparts.
- As a result of COVID-19, the legal industry and client demands are shifting. We can pinpoint 6 specialties that are in high demand and could be very lucrative in the future.
It is important to keep in mind that the amount that lawyers make can vary greatly and are dependent upon more than just a practice area. Firm size, geography, industry trends, and the attorney’s skills and experience all play an important role in determining how well they get paid. Therefore, these average calculations should be used as a guide and take into account the other factors listed above.
Which Practice Areas are Most Profitable for Solo Lawyers and Small Firms?
According to our average calculations from Martindale-Avvo, Law Crossing, and Salary.com reporting, these are the highest-earning practice areas for 2020:
- Medical Malpractice (average of $165,266)
- Intellectual Property (average of $160,145)
- Real Estate (average of $152,658)
- Personal Injury (average of $151,862)
- Business & Corporate (average of $143,236)
- Workers Compensation (average of $134,894)
- Employment & Labor (average of $133,964)
- Criminal Defense (average of $125,462)
- Estate Planning (average of $120,309)
- Family Law (average of $115,000)
- Immigration (average of $109,746)
- Bankruptcy (average of $93,910)
| Martindale-Avvo | Law Crossing | Salary.com | Industry Average | |
| Medical Malpractice | $267,000 | $117,709 | $111,091 | $165,266 |
| Intellectual Property | $224,000 | $114,470 | $141,966 | $160,145 |
| Real Estate | $191,000 | $114,612 | $152,362 | $152,658 |
| Personal Injury | $254,000 | $118,021 | $83,567 | $151,862 |
| Business & Corporate | $218,000 | $96,407 | $115,303 | $143,236 |
| Workers Compensation | $226,000 | $118,146 | $60,538 | $134,894 |
| Employment & Labor | $197,000 | $114,496 | $90,397 | $133,964 |
| Criminal Defense | $171,000 | $114,529 | $90,859 | $125,462 |
| Estate Planning | $174,000 | $117,813 | $69,114 | $120,309 |
| Family Law | $142,000 | $117,900 | $85,101 | $115,000 |
| Immigration | $134,000 | $114,456 | $80,784 | $109,746 |
| Bankruptcy | $140,000 | $75,498 | $66,232 | $93,910 |
With the exception of bankruptcy, all practice areas average well into the 6-figure dollar bracket. And from the lowest (bankruptcy law) to the highest (medical malpractice) there is a difference of 55%.
What Do You Need to Become a Profitable Lawyer? Some Factors that Affect the Potential Income Levels of Attorneys.
- Geographical location – Lawyers who live and practice in larger metropolitan cities such as New York, Chicago, and Los Angeles will earn more than those in smaller cities.
- Private vs. Public sector – As a general rule, lawyers working in private practice earn more.
- Experience and skills – Attorneys with greater years of experience, additional degrees and certifications, awards and accolades, and notable case wins will bring in a higher salary.
- Educational background – Those lawyers that attended prestigious universities may enter the workforce with a higher starting salary and remain ahead of the pack for years to come.
Other factors can still affect a lawyer’s earning capacity, such as their health, gender, and age. For example, in Martindale-Avvo’s 2020 Compensation Report, female attorneys reported receiving 35% less income than their male counterparts, with an average salary of $141,000 as compared to the male salary average of $217,000.
What Practice Areas are In-Demand? Where is the Industry Headed?
- Bankruptcy – As our economy shifts and the dust settles after the pandemic, the financial markets remain on a wobble. Companies and consumers that have taken a direct hit to their sector are looking to the legal industry for guidance on how to protect their financial and business assets.
- Healthcare – The coronavirus pandemic and its uncertainties, coupled with rapid growth in the healthcare field, has increased the demand for legal services for hospitals, drug manufacturers, insurance companies, and medical providers.
- Labor & Employment – Businesses and employees are facing increasing challenges as they navigate their complex relationships, particularly with a shifting job market. The frictional environment is seeing an increase in claims and lawsuits filed by the unemployed. Growing issues are related to workplace health, safety and privacy, employee discrimination, and wrongful terminations.
- Litigation – The number of lawsuits filed in state and federal courts is rising across the U.S. and, as a result, there is a growing demand for attorneys in the areas of complex civil litigation, commercial litigation, as well as class action and personal injury lawsuits.
- Privacy, Data Security & Information Technology – According to a recent research report by MarketsandMarkets, experts predict that the cybersecurity and I.T. market will grow to over $240 billion by 2023. The uptick in data security and breaches, as well as recent trends with blockchain and bitcoin adoption, have shifted how companies approach their data security. The legal services industry will need to meet these growing demands and, for those with experience in this field, they can expect a lucrative and successful career.
Power Up Your Firm’s Marketing Strategy to Drive Revenue and Grow Profits
When charting your path forward, it is important to take into account your professional experience and your firm’s specific practice areas. Each practice area requires a unique marketing and business development strategy in order to attract and retain your most profitable clients, operate efficiently, and grow your profits.
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