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The Lawyer's Financial Strategy - Stage 4: Senior Partner and choices

Senior Partner. You are a senior and seasoned leader…how did it all creep up so quickly?  But your colleagues certainly think of you as the expert in your field. You probably have many junior partners who seek you out for your wisdom. You may have spent time on the Executive Management Committee so you know how to run a professional and complex firm. Your clients know you well and reach out when they need help, advice and guidance. You have become everything you admired in the legal profession. Respected, focusing on people and their needs, a communicator and always intellectually curious.

The law is your domain. Sure the pressure on fees and billing never seems to let up. You’ve been through several recessions when companies start to hire in-house legal talent. But for the thorny, difficult cases and complex settlements, they turn to you. It’s not an easy profession but it keeps you mentally alert and sharp. Where you need to be.

You have had a decade or more in your firm’s partner-level 401(k) and cash balance plan. These have been good for $75,000 to $100,000 a year. These balances make up most of your liquid net worth although that low-cost index fund and ETF investment program that started years ago and you tell all junior associates to start, is looking pretty good. Recently you may have contributed to the firm’s deferred compensation plan. It’s not a lot because you still have at-risk capital in the firm. But you understand the firm’s finances and appreciate the prudent financial management of the firm. You earned enough to pay for your kid’s college without extensive loans and the mortgage has an end in sight. Your net worth is more than you imagined when you started out. You may not have the “capital event” of a stock plan coming up but you have earned well. But those hours...however much you delegate, you're still in charge of the team and responsible for its direction and results.

You have options. Maybe teach or join Some non-profit boards. You also can choose to be “at counsel” which means some free-up of your capital and more control on your time. You may want to work for another year or three years. You're not quite sure what you will do with your time. Travel, time with the family, perhaps some writing all sound good. But you don’t have to make that decision yet and there’s enough money so no need to rush anything.

By now, you are thinking of legacies, drawing down your savings and working out when and how you take from your 401(k) and qualified assets. There are a lot of moving parts and you're also rethinking your asset allocation. It was fine to have risk assets when you were earning…you were saving every month and buying on every dip. But now you probably need less volatile assets because who wants to be withdrawing funds at a market bottom. Some expenses you never paid much attention to can now play a big part in your life. Healthcare for you. Perhaps still for your parents.

So there’s lots to do. Manage the money, make sure it’s there when you need it and watch the small stuff. But you have played the game of life and won. Your finances weren’t everything in your life but they’ve given you the freedom to make your own choices.

Please note that this discussion of our investments and investment strategy (including our research and investment process) represents our investments and investment strategy at the date of this commentary, and is subject to change without notice.  We cannot assure that the type of investments discussed in this commentary will outperform any other investment strategy in the future, nor can we guarantee that such investments will present the best or an attractive risk-adjusted investment in the future. This is for general informational purposes only; references to an individual security should not be construed as a recommendation to buy or sell that security.  The securities mentioned in this commentary are only several of the successful as well as unsuccessful investments by us, and do not represent all of the securities we have purchased, sold or recommended.  Although we deem reliable the sources of the statistical and other information referred to in this commentary, we cannot guarantee the accuracy or completeness of any statements or numerical data.  Past performance is no indication of future results.