It’s 10 pm on a Sunday night. John Koben, partner at an Am Law 50 firm in the Bay Area, just finished putting his two children to bed. He heads to his home office to review memoranda for tomorrow’s client meetings, but is intercepted by his wife, who reminds him of their child’s middle school open house tomorrow night. Koben winces, realizing that he had scheduled dinner with an important new client for the same evening. He pauses to consider his options. How does he keep peace in the family, while keeping his career on the fast track?
Although John Koben is a fictional lawyer, his circumstances are not uncommon for most ambitious attorneys. The pressures of a 24/7 career and producing at partner expectations require juggling multiple responsibilities simultaneously–clients, firm, marriage, children, family obligations, health, and financial pressures. In the back of their minds, many attorneys wrestle with nagging questions like “How much longer do I need to keep up this pace? Will I have enough money to eventually slow down and retire? I think I’m okay financially, but how do I know for sure?”
Most attorneys forget that although they work as partners in sizeable law firms, they are also one-person businesses. Moreover, as with any other profit-seeking venture, results for their solo enterprise will not be successful unless they have a plan and strategy for reaching desired outcomes.
While a course in strategic planning was probably not offered in law school, it is nonetheless an essential element to the success of any legal professional. Defining annual and long-term financial outcomes—while laying out strategies and dashboards to track progress along the way—must be balanced with personal and family requirements. Big firm benefits—401(k), pension plan, capital account, deferred comp, defined benefit—are typically generous, but require deep knowledge of how best to capitalize on them. The essentials—retirement income, tax, and estate planning strategies—should be incorporated in the comprehensive financial planning work done by the attorney’s CPA, wealth manager or other financial advisor.
Unfortunately, many attorneys do not think about creating a strategic financial plan until they near retirement. This can be a costly mistake, since creating one early allows the necessary runway to maximize the probability of hitting important financial goals on the attorney’s timetable.
Think of it as an antidote for sleepless nights.