In the US, on average, attorneys work 49.6 hours per week. But it is not uncommon for a lawyer to work anywhere between 60 and 80 hours a week, which is double that of the average working hours of the US (34.4 hours per week).
Lawyers often work extra hours delivering legal solutions based on a comprehensive analysis of each client's individual needs. They dedicate themselves to giving comprehensive, committed, and objective assistance to their clients. Although this is crucial, it restricts the amount of time they can devote to achieving the same in your financial life.
The majority of attorneys have neither the time, nor the financial knowledge necessary to make key decisions that can impact their long-term financial stability. This created demand for financial advisors focused on attorneys’ financial needs. This demand was answered by experts that offer financial planning tailored for lawyers.
If you are an attorney needing a financial advisor to assist you with your financial needs, this article might be a good start. You will learn how a financial planner can help lawyers and how to choose the right financial advisors. In addition, this article offers a list of the best financial advisors for lawyers in .
What Is a Financial Advisor?
Financial advisors assist you with your overall financial planning. This includes, but is not limited to, the creation of strategies for reducing financial risk and building wealth long term. They can give you a game plan that sets you on the path to achieve your financial goals. Financial advisors can come in many names, such as wealth managers, investment managers, financial coaches, and so on.
How Can a Financial Advisor Help a Lawyer?
There are many reasons why so many financial planners focus on providing their services to lawyers. Professionals that work in law tend to have similar financial struggles and goals, as well as the potential of having a fat bank. Of course, there are exceptions and more individual needs, but that is exactly why the tailored service of a financial advisor might be perfect.
From dealing with law school debt to making the right investments that will guarantee a good retirement, financial advisors can do a lot for attorneys. It is a profession with high income, but complex responsibilities. Thus, if you are an attorney in , these are the main ways a financial advisor can help you:
Many lawyers begin their careers with a significant amount of student loan debt. Often, attorneys start their professions with $130,000 or more in combined undergraduate and law school student debts. When other commitments are included, like mortgage payments, attorneys may face ten or more years of monthly payments of thousands of dollars. And, unless they land a job in a private firm, it can become challenging to make the ends meet.
A cash flow analysis performed by a financial planner can assist attorneys in forecasting how to best allocate their income. The financial expert can help you decide how much of your earnings will go to expenses, debt payments, and long-term savings. For example, a planner may advise prioritizing debt payments by accelerating payments on loans with higher interest rates.
Analyzing and Choosing Insurance
Many Lawyers work in high-risk specialty areas, which can expose them to lawsuits. That is why attorneys frequently get malpractice insurance to shield themselves from client claims. The cost of these protections, also called premiums, might range from $300 to $10,000 each year.
The rates of this type of coverage vary widely depending on insurance providers and location. This makes it difficult for lawyers to assess their alternatives on their own. In this situation, a fiduciary financial planner could assist attorneys in evaluating their malpractice coverage needs without conflicting motivations (fiduciary financial advisors cannot be paid for recommending a certain insurance company).
Attorneys can also use financial advisors to assess their present life insurance plans. The financial planner can then propose alternative insurance choices that can provide greater security for their families at a lesser cost.
Attorneys frequently find themselves in higher tax brackets whenever their prime earning years are approaching. They may also obtain company stock or stock options if they work for a company. Alternatively, if they become partners, they can earn partnership shares, which gives them a stake in the firm. All that can make taxes not only high but also complicated. That’s where a financial advisor can help.
A financial planner can assist in uncovering methods to minimize the attorney's taxable income by maximizing yearly contributions to 401(k) plans and IRAs. They can also research further tax-deduction options. On top of all that, when it comes time to sell these shares (company or firm) that an attorney might own, a financial advisor can be crucial. The right professional in collaboration with the attorney's CPA can develop a strategy for doing so in a tax-efficient manner.
Protecting Personal Assets
In the event of a multi-million-dollar lawsuit against a lawyer, malpractice insurance alone may not be sufficient. Attorney's savings or investment assets could potentially be targeted. A financial planner can suggest ways to protect these assets from both litigants and creditors. Putting investing assets in a trust is an example of what a financial planner can do in a situation like that.
To form the trust and manage the transfer, the financial consultant will often collaborate with a trust attorney. This team can also assist lawyers in creating estate plans that guarantee their successors receive their inheritance efficiently.
Savings and Investing
Many financial advisors are also investing experts who can put a thorough strategy into action. Thus, financial advisers can help lawyers choose an investment strategy that fits their risk tolerance and specific financial goals. For example, they can help with preparing for retirement or saving for a child's college. They can propose an asset allocation plan to develop a diversified portfolio of stocks, bonds, and cash that meets the lawyer's investing goals.
How to Choose the Best Financial Advisor in
Attorneys can benefit from good financial planning. This financial assistance can reduce the financial uncertainties of their lives. Yet, choosing the right professional is crucial.
Most clients select lawyers who specialize in delivering the precise legal services they require. The same logic can be applied to financial advisors. Lawyers seeking financial advice should assess the qualifications of any financial planner they are contemplating. Other factors should also be taken into consideration. In fact, these are the main factors you, as a lawyer, should consider when choosing your financial planner.