Do I have special concerns as a lawyer that other professionals don’t have at this time?
For the first time in living memory, many law firms have laid off lawyers, and deferred hiring of new associates and summer associates. Whole law firms have gone out of business. In the past, it was rare for a lawyer to lose his job, so lawyers never had to do much financial planning in this regard. This means that you should think about balancing Career Risk with your Financial Risk. In periods of high career risk, think about reducing your financial/investment risk.
What can I do in today’s environment?
If you are an established lawyer (associate or partner) you might consider hiring a coach to help you increase your productivity and increase your business. Even Tiger Woods has a coach! Financially, you should max out your contributions to your firm’s 401k and profit sharing plans. Then you should be investigating setting up your own non-qualified retirement plans outside of your firm’s retirement plans. Likewise, you should be studying your firm benefits, and supplementing them wherever necessary with portable plans that can follow you wherever you go. Finally, save more and spend less.
Why the emphasis on firm benefits?
When the practice of law was very profitable, firms provided generous group benefits for their employees and lawyers. But now that most law firms are stressed financially, they have to cut back on expenses. Often this means that firm benefit plans will be reduced or eliminated. Do not assume that because your firm’s benefits are generous today,they will remain generous in the future. Take the time to understand your benefits and think about supplementing them where necessary.
I have prepared two PDF presentations just for Partners and Associates.
Click her to download “A Survival Guide for for Law Firm Associates”
