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How to Overcome the Top Financial Challenges Attorneys Face

Financial Planning Retirement Planning Attorney Specific

There are few professions that demand as much advanced education and on-the-job proficiency as that of the attorney. However, many attorneys remain at a disadvantage when managing their hard-won wealth. Neither their college education nor their life’s calling provide the time and tools it takes to tackle yet another talent – i.e., managing their family’s financial well-being.

Attorneys in Chicago and beyond face unique challenges that can mar their complete investment picture.

  • A late start. The average attorney finishes law school at age 27, and it can take several years for a law school graduate to make partner at a firm.(1)
  • Massive student loan debt. Law school isn’t cheap; law school graduates leave school with an average of $140,616 of student loan debt.(2)
  • Increased professional liability risks. With the number of large legal malpractice claims increasing year after year, many attorneys worry about malpractice lawsuits. (3)
  • Higher burnout. Long days, long hours, and high levels of stress, lead to higher, early-career burnout for attorneys, compared to other professionals. (4)

Our goal is to help readers understand and avoid the top five financial challenges attorneys face as an inherent part of their profession. We will address these Challenges one at a time over several posts. These include:

Challenge 1: Time is NOT on an attorney's side

Challenge 2: Attorneys enjoy an (over)abundance of opportunities

Challenge 3: Not every risk is worth avoiding

Challenge 4: It's hard to get off the treadmill and live a little

Challenge 5: Retirement happens...but how?

Attorneys are busy and work many hours

Challenge 1: Time is NOT on an attorney's side

Attorneys are incredibly busy, with every ticking moment accounted for. Eighty-hour work weeks billed in six-minute increments are the norm. Any leftover hours are best spent enjoying family and personal interests, leaving little time or desire to fuss over the household finances.

In other words, it’s not that attorneys don’t have the intellect to develop an investment plan, allocate their assets and oversee the progress toward their financial goals. They’ve just got higher demands on the hours in their day.

An attorney’s inconsistent income stream is equally demanding. Varying caseloads, year-end bonuses, and other volatile income events within and across the years make it difficult to manage the invariant need for smoothly operating cash flow, tax and retirement planning in their personal lives.

A lumpy income is dangerous

Squeezed between a tight time table and an unpredictable income stream, many attorneys thus lose their grip on the proverbial financial ball. For example, they may fail to take full advantage of their company retirement plan, make best use of disability insurance coverage, or optimize their investment portfolio toward funding their long-term goals.

The Game Plan

Attorneys spend many hard years nurturing their careers, and understandably want to enjoy the fruits of their success. However, those same professional demands make it hard to stay on top of their personal financial interests. A financial professional who is familiar with an attorney’s distinct challenges can serve as the all-important missing link between earning stellar income and making best use of it over time.

GET THE FULL REPORT ON ATTORNEY CHALLENGES

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  1. http://www.acelsat.com/how-old-is-too-old-for-law-school
  2. http://abovethelaw.com/2015/08/how-are-lawyers-managing-their-law-school-debt-most-will-never-be-able-to-pay-it -off/
  3. http://www.insurancejournal.com/news/national/2013/06/27/296979.htm
  4. http://www.abajournal.com/magazine/article/how_lawyers_can_avoid_burnout_and_debilitating_anxiety