A lawyer’s career is a long-term endeavour involving years of education, training and developing technical expertise. Having ascended to the position of partner, you have likely seen and heard it all over the years, both professionally and personally. Yet no matter how far you’ve progressed in your career, there are still opportunities to refine your plans and improve your outcomes.
In this article, we show how you can benefit from proactively planning and updating your career and financial roadmap to create the future you desire for yourself and your family.
Understanding your career lifecycle
As recruiters who specialize in the legal sector, The Counsel Network has worked directly with lawyers of all levels. We’ve had countless heartfelt, confidential conversations about their careers and aspirations. From 30 years of engaging with the legal sector and listening to partners, we have noticed a few similarities and common themes in their backstories. What has become clear to us is a common cyclical progression experienced by lawyers as their knowledge, expertise and comfort zone within the profession evolve.
We have identified four phases in this progressive cycle, each with a unique impact on the lawyer’s life, family and future. There is no set timeline for one to travel through the four phases – in fact, a lawyer might experience the cycle or portions of it several times throughout their career.
Like anything that’s new, you face a steep learning curve as a freshly appointed partner. The work is challenging and there is excitement in your new role. You may feel overwhelmed, but you are taking it all in stride.
You’ve got some time and experience as a partner under your belt. You feel confident and are motivated. You are achieving targets and making a valuable contribution.
You’ve established your place in the firm, so your foot eases off the gas. You’ve hit a plateau. You begin to experience boredom and declining motivation. Your mind wanders to thinking the grass might be greener elsewhere.
You’re feeling frustrated and unhappy. You start seeing a lot of negatives in things that did not bother you before and may be heading for burnout.
For partners, it is advisable to take these developmental phases into consideration when developing an effective plan forward for your career. As a partner, it is important that you proactively seek learning opportunities that combine your talents, values and aspirations as you navigate the four developmental phases. Critically, this means recognizing the tell-tale signs and laying the groundwork for new learning opportunities before you hit the cruising phase – or worse, slip into disengagement. A misstep here could trip up the long-term health of your career and your life outside of work.
There are endless avenues down which you can take your legal career and setting out in one direction doesn’t prevent you from changing course later on. Indeed, you should review and update your career plan on a regular basis. At the partner level, you face new options that might not have been available to you as an associate – for example, preparing for leadership roles within the firm or serving on organizational boards. By taking charge of your career, you will have greater job satisfaction and opportunities for advancement while ensuring that you don’t enter the disengagement phase.
Building your financial future
While career planning can help you achieve your professional aspirations, financial planning can help you protect and provide for your loved ones – both now and in the future. A good financial plan is much more than simply a tool for maximizing wealth. Instead, it involves taking a holistic view of your life and goals and customizing strategies aligned with the future you envision for your family.
Between work, family and home, a partner’s life is a busy one. Amid the joys and stresses of daily life, staying on top of your finances can be a challenge, let alone finding time to plan for the long term. And even if you had the time, how are you supposed to know what’s important for your financial future at this stage of your career and when you need to take action?
While you are likely more financially stable than earlier in your legal career with student loans well paid off, you are also at an age when major life developments like an inheritance or a divorce can suddenly change the equation.
So what are the key financial considerations that should be on your radar?
- Taking on leadership roles at work
- Dealing with aging parents
- Receiving an inheritance
- Buying a second/vacation home
- Potentially grappling with separation or divorce
Your financial situation is shaped by life events and the choices you make, so your specific needs may differ from those of your peers. Nonetheless, there are basic financial steps that generally make sense for recently appointed partners.
Protecting yourself and your family
From a financial perspective, ensure you have the right pieces in place to protect the financial well-being of yourself and your family. While you are in the midst of strong earning years, you also may be gearing up for major expenditures. The following are important steps to ensure you stay on course for a bright financial future:
- Optimize insurance and asset allocation. As your finances and family situation may look a lot different at this stage, it’s a good idea to review and optimize your insurance coverage and asset allocation. Make sure you have what you need and need what you have. While you likely have a higher disposable income, this may be offset by increased financial responsibilities.
- Protect your income. One in three. Those are the odds that you will be disabled due to a serious illness or accident for a period of 90 days or longer at least once before you turn 65. As a lawyer, the good news is that you likely have disability insurance through your firm’s group coverage. The bad news is that it likely falls far short of your needs. Although you have savings and investments, how long would these last if you had to rely on them instead of income from your job?
- Double down on planning for your retirement. A recent poll by a Canadian bank found that 32% of Canadians aged 45–64 have no retirement savings – an alarmingly high percentage. Although you may still be many years away from retirement, it’s important to make sure you’re on track for the golden years you envision. There is never a better time to sit down with a trusted advisor to discuss when and how you’re likely to retire, and what it will take for this to happen. If it turns out that you’re on the right path, congratulations. If it turns out that you’re not saving fast enough for your planned retirement, the good news is that there’s still time to make adjustments and step up your efforts.
- Top up your pension plan. Many lawyers in private practice may lack a pension or have one that is inadequate. If you are in this situation, proactive financial planning can prevent a shortfall. For example, permanent life insurance may be an excellent choice for both protecting your loved ones and growing your wealth in a tax-efficient manner, since funds you invest in life insurance can grow tax-free and eventually be paid out to your chosen beneficiaries with low or no tax. However, it has to work for you.
- Ensure your loved ones are looked after. Death remains a fairly taboo subject in Canada, but ensuring that your financial affairs are in order is important if you want to be sure that your loved ones will be looked after once you’re gone. Hopefully this is still many, many years away – according to Statistics Canada, the average life expectancy here is 83 years for women and 79 years for men. The estate planning process gives you an opportunity to articulate how your wealth should be distributed upon your death. It also helps you assess whether the plan you currently have in place is sufficient to protect the well-being of your family or whether changes are required.
Staying on track with a clear plan
As a partner, you can increasingly reap the rewards of the hard work you put in during the early years of your career. You are also in a good position financially to revisit existing wealth management plans or implement new ones to ensure that your family will be well cared for no matter what happens later in life.
Seeking out support from a trusted financial advisor can help you better understand your options and develop or adjust a wealth management plan to match your needs. Of course, financial planning is not a one-time effort. Your financial needs, priorities and opportunities evolve over time, so adjustments are needed along the way to ensure the best outcomes for you and your family. Everyone’s situation is unique, but the following are examples of the key considerations for new partners to address in your financial plan as you grow older and mature in your career:
- If you have a child, are you investing in their education with a registered education savings plan (RESP), within which your contributions can grow tax free?
- Have you undertaken any estate planning to ensure that your financial affairs are in order and that your loved ones will be looked after once you’re gone? Are you doubling down on your retirement planning to capitalize on recent promotions and higher income? Do you have a will?
- Should you aspire to become an equity partner, do you have clarity on your financial position? Do you have tangible assets to support the financial investment that will be required to enter the partnership?
For any lawyer, career planning and financial planning are both highly personal, so there is great value in working with trusted individuals who can act as a sounding board and guide you toward choices fully aligned with your needs. And while it’s beneficial to start with both as early as possible, it’s never too late to begin tackling these important issues.