The past few years have been a bit rough in terms of the economy and there are few signs that things will dramatically improve anytime soon. The national debt continues to rise and there are still way too many who are unemployed or under employed. For those who went into this downturn living paycheck to paycheck, the past few years have been particularly hard. One lesson that can be taken from all this is the following. There is value in planning ahead in order to be financially prepared for the unexpected. So, how prepared are you? Not surprisingly, I see the failure of an attorney to appropriately plan ahead, not only as a financial misstep, but a risk management concern as well.
I constantly meet and work with attorneys who have done, and will continue to do, all that they can to provide quality legal services to their clients for a fair and reasonable fee. This is a good thing. Add into the mix, however, a desire to provide a decent wage and some sort of benefit package to keep and reward competent and dedicated staff and couple this with the all the other costs of running a law practice and financially things starts to get complicated. Then there are the realities of life that might include raising a family, providing a college education for the kids, purchasing a home for the family, caring for elderly parents, covering unexpected medical bills, rebuilding post a divorce, recovering from that one hot investment tip that unfortunately led to a large loss, or taking the vacations that helped keep it all together. You see where this starts to go. Life happens, whether we want it to or not, and it also happens at a speed that can take so many of us off guard.
For some, as the retirement years finally near, there is a harsh awakening to the reality that somewhere along the line the retirement plan that was always meant to be a priority never actually did become one and therein lies the problem. I have visited with attorneys who shared that they simply aren’t able to retire because there is no adequate retirement fund. Life and/or the practice kept getting in the way. Claims and disciplinary matters can and do arise as a result of financial pressures and sometimes the reason is as simple as an attorney no longer had the energy or desire to practice law but couldn’t afford not to. Unfortunately, when one’s heart is no longer in it, the odds of a misstep go up.
When I stumble upon an “unable to retire” situation, I often wonder whether it might have been prevented with appropriate financial advice and planning. I suspect that for some it truly could have. Too many attorneys fail to develop formal business plans for their practices, see that their own wills get drafted and signed, or set up retirement accounts just for starters. Perhaps one reason is that they’re too busy seeing that these kinds of things get done for their clients. Be that as it may, there is value in taking the necessary steps to plan for your future while the advantage of time is still on your side. More importantly, commit to the plan and follow through in its implementation.
There is no one right way to go about this. Certainly seeking advice from a financial planner, reading investment and/or business planning books, working with a CPA and/or an estate planner are all worthwhile ideas. Personally, as our children entered the workforce, I tried to teach them the importance of paying themselves first. I believed that the saving and investing habits that I tried to engrain in them would serve them well for years to come if they were able to start and remain committed to the process. I wish that someone would have shared that advice with me thirty five years ago as my financial picture would be significantly different today if they had. Regardless, it is never too late to start. Take time to review your personal and business financial plan and, if one isn’t developed, establish a time line to get it done.
I am trying to encourage us as attorneys to take to heart the advice that we are often so insistent that our own clients follow. Advice like write a will, draft a business plan, and prepare for what the future brings. The bottom line is that retirement planning is about being fiscally responsible both personally and professionally. Yes, proper financial planning can help prevent claims and or ethical complaints that so easily arise when you are facing unforeseen financial pressures in either your personal or professional life; but more importantly, it can also provide a little peace of mind for you, your family and those with whom you practice. In spite of what some seem to believe, dying at one’s desk isn’t a sound plan because unexpected things do happen in life.