How is a court reporting firm structured? How does one work?
According to Herbert Hallas' new book, Guardians of the Record, court reporting has been around as a profession in the United States since at least 1860, when lawmakers gave New York City courts the permission to hire stenographers to speed up courtroom proceedings and improve the accuracy of court records.
Even after all that time, no specific structure can be pointed to today as the "best" for delivering court reporting services. Different clients require different models. Firm owners and individual court reporters must adapt. There is no one perfect model to be used by court reporting firms.
Just like law firms, there are several different ways in which the entities that provide court reporting services can be structured. Without getting into legal or tax details, let's look at a few options.
THE ROGUE REPORTER
The most simple way for a court reporting "firm" to be structured is for a single court reporter to offer his/her services to clients as an individual contractor. A reporter like this can provide their services directly to clients or through a larger regional or national firm.
In this case, the individual reporter would be paid directly from many different clients as a contractor and would receive many 1099-MISC forms at the end of each tax year.
This can offer a lot of flexibility for the individual reporter, as they are not tied to any specific client or firm; however, there are some downsides to this approach.
For example, work may come in spurts (sometimes too fast, sometimes too slow), because this kind of freelance reporter isn't attached to a larger marketing entity that is receiving a consistent flow of business.
In addition, while the freelancer will have his/her own personal brand, they will not be attached to the branding of a larger organization and the benefits that may accrue from that.
Finally, this arrangement doesn't provide any traditional corporate benefits for the individual. No healthcare, no pension (does anyone get one these days?), no 401(k), no company car, etc. Not necessarily a problem, but it depends on each individual situation.
All that being said, the Rogue Reporter model is a perfect solution for many reporters. It offers flexibility, variety, and an interesting way to make a great living. Reporters that follow this model were already in the "gig economy" before it became cool!
BAND OF BROTHERS (OR SISTERS)
No, not the HBO miniseries . . .
Another way to structure a court reporting firm is to band together several reporters. This might be the most common structure in the US today.
The ownership structure can vary. This could be a collection of freelance reporters that all still work as contractors, but work together for marketing, production, billing, etc.
Or it could be a sole proprietor that is the firm owner who has developed a firm's branding and back office, as well as working relationships with a collection of individual reporters who are paid as contractors.
Another option could be a partnership where several reporters and/or non-reporting owners share the ownership and management of the firm.
Regardless of the ownership structure, in this type of arrangement, a firm can start to see the benefits of size via streamlined marketing, scheduling, and production.
THE CORPORATE BORG
As the size of the firm increases, resistance is futile. Just kidding......
I don't really believe that a larger court reporting firm is evil like the Borg in Star Trek.
In theory, the ownership structure of a large firm can be varied just like any company -- public, private, corporation, partnership, etc. No matter what the structure, there are many benefits in terms of scale and scope.
A larger firm will start to see more elements that are similar to corporations in other industries -- more meetings, more committees, more vice-presidents.....
On a serious note, the firm will likely become more efficient and effective. They can potentially offer lower prices, cover a broader geographical area, and have streamlined back-office functions.
On the other hand, a larger firm might struggle to keep personalized relationships with clients or ensure consistent branding and customer service level.
In terms of reporters, a larger firm might decide to hire employees as direct employees. Instead of working as 1099 contractors, these reporters would work as "traditional" employees in terms of salary, benefits, etc. Of course, this is appealing to some reporters, but not others.
As this point, Harpeth Court Reporters lies somewhere between the first two examples mentioned above. We remain relatively small, but we have more work than 1 or 2 "Rogue Reporters" can handle. We serve mostly the Nashville metro area, but we have established a network with court reporting firms across the US that share our values.
Speaking of our firm values, our highest priority is to delight our customers and treat our reporters better than any other firm. People matter most to us. Our clients and reporters deserve the utmost respect.
If you are a client looking for a court reporter or a freelance reporter looking for a firm, please feel free to contact us to learn more about we can help you succeed.