Financial Literacy for Legal Professionals
Legal Professionals are both highly trained and highly compensated, a combination which presents the group with particular barriers to building wealth:
Barriers Legal Professionals Face
- The time constraints on legal professionals leads to a lack of time which in turn leads to hastily made financial decisions.
- Spending time building the “lifestyle” of a lawyer and thus hold off investing.
- Spending more than we earn.
- Not diversifying investments and instead focusing on a few “glamorous” items.
- Not trusting professionals in financial matters to take care of our money and not asking for help with financial issues.
How to start overcoming the barriers and building financial wealth.
Organizing your financial life can save time and reduce frustration - which can lead to better financial decisions.
Organize your finances into an efficient filing system
- Financial planning information
- Net Worth Statements
- Monthly budget records
- Personal Data
- Non-Qualified investments
- Qualified investments
- Pensions and Social Security
- Insurance Policies
- Employee Benefits
- Bank Accounts
- Credit Cards
- Legal Documents and Licenses
- Income Tax Records
- Law Firm Agreements
- Tax and Professional Associations Fees
- Court Service (messengers)
- Communications Equipment
- Office Equipment/Supplies
- Library/Research Fees
- Filing Fees
- Loan Payments
Determine your levels of building your financial health:
- Protection Foundation Level
- Cash Generation Level
- Growth Accumulation Level
- Aggressive Growth Speculation Level
- National average: $54.65 per hour or $113,660.
- New Mexico average: $87,110
Most workers earn between $51,288 and $106,862.
- New Mexico Annual
- New Mexico Annual
Job Growth in New Mexico - 2006 to 2016
In 2006 about 2,864 people worked in this occupation in New Mexico. The Department of Workforce Solution estimates that by 2016 this number will increase by about 12.2 percent and an estimated 3,214 people will be employed in this occupation. Compared to other occupations, employment growth in this occupation is growing more slowly than the average. Job opportunities are good or favorable, as there should be about 89 openings each year for workers in this occupation.
The Six Planning Steps
- Prepare and agree to the plan. In a law firm, it is important that all of the key players agree on the direction of the firm. If the partners are not clear about the overall goals as well as specific objectives and strategies, then the planning process is bound to be sabotaged and of little use. Partners need to "buy in" to a plan. Solos are not immune from this requirement either. They must get a spouse or "significant other" to accept the general direction of the firm. That is why the first element of any plan is to agree to make and abide by the plan.
- You need to gather a certain amount of historical information so that you can analyze it and start thinking about realistic modifications for the future. You will be primarily interested in marketing and financial data in the form of documents, statistics, reports, survey results, and, when there is nothing else, your best guesses. All this data will give you a snapshot of your or your firm's marketing and economic health in the present.
- Identify goals. If you do not decide what type of practice you want, you will wind up with one reflecting whatever walks in the door. Serendipity or whim may make you successful, but it is doubtful. You need to decide what you want to be and what you want to do, both professionally and personally.
- Create the marketing plan. Since your practice is dependent on clients, then getting them and keeping them is critical to your success. A marketing plan helps you to see who these elusive people are and how to attract them to your door.
- Create the financial plan. The financial plan is the culmination of all of your earlier information gathering, thinking, and planning. The financial plan is the statement, in financial or monetary terms (the language of business), of your dreams and goals.
- Evaluate and revise the plan. Good planning is not static; it is meant to be a guide against which you can judge actions or outcomes. If you begin to notice that a certain aspect of a plan is not working or needs some adjustment, change it. The beauty of a flexible plan is that it can be revised to better reflect the reality of your specific situation and to help you get to your desired outcome. Planning is an ongoing process.