I recently came across an article I’d written for Attorney at Law Magazine in 2018. At the time I remember shaking my head that the number of women equity law partners remained stubbornly stuck at 19%. Furthermore, as a female financial planner, I baulked at the fact that women lawyers took home between 82% and 94% of the salaries enjoyed by their male counterparts.
Keen to see if anything had changed in the past four years, I turned to the Glass Ceiling Report produced by Law360. The report showed that, by the end of 2020, the percentage of women equity partners had increased to 23.3%, non-equity partners stood at 33%, female non-partners at 46.6% and female attorneys at 37.7%.
I read how women make up more than half the number of law students in the US – which means when it comes to doing the work, women are there in the thick of things. But when it comes to having a meaningful slice of the financial rewards, women are still being left behind.
This discrepancy is even more apparent when you focus on minority female lawyers and women of color, who make up 20% of first-year law students, but only 9% of law firm attorneys and 3% of law firm equity partners.
With these odds stacked against women, in an already demanding and competitive profession, it’s hardly surprising that I frequently work with clients who decide to leave the big law firms behind and take less-demanding roles that offer more quality of life, but usually reduced pay.
The good news is that with astute financial planning, which is carefully tailored to consider the career stages a female lawyer goes through and the unpredictability of cash flow, it is possible to attain financial freedom on your own terms.
A Goal-Focused Approach to Financial Planning for Female Lawyers
As an advisory firm that specializes in serving female executives and professional women – such as lawyers – WealthChoice takes a holistic approach to guiding each client based on her personal, professional and financial goals.
By taking the time to reflect on your short and long-term goals, and what is really important to you, we are better able to analyze your aspirations, consider your financial resources and create a strategy that brings in all the legs of financial planning – from asset protection and wealth accumulation to estate planning and retirement. We link all these considerations together to help you build an inspiring and fulfilling life.
In a career where the average number of hours worked is around 53 a week – and potentially up to 80 or 100 hours for a busy week, according to Bloomberg Law’s Attorney Workload and Hours Survey – it is particularly important for female lawyers to consider the importance of quality of life and career satisfaction as part of this process of reflection.
When you do, and when you structure your goals around these wants and needs, then you are more likely to stay committed and make meaningful choices.
Financial Advice for Female Lawyers: Key Areas of Focus
We know women in the law are ambitious, smart and strong, but we also appreciate that they operate in a world where financial certainty is often wrapped up in a complex web of structures and incentives.
More often than not, structuring financial advice for female lawyers must take into account the following:
- Earnings are usually linked to the number of hours a lawyer can work. This has implications for future earnings projections and also for considerations such as illness or disability, which should be planned for carefully. Retirement planning must also take into account the longevity of the career and the ideal nest egg required for the future.
- Cash-flow planning is critical, particularly since many lawyers bill on conclusion of a matter. This contingency billing process can cause huge variations in income and make it necessary to structure financial obligations and credit relationships carefully.
- The lump-sum distribution of compensation and profits by many law firms also creates a cash-flow issue for many lawyers. Again, planning around these distributions is important from a financial planning perspective, which may include maintaining a cash-based reserve to ensuring realistic budgets are adhered to.
- As a lawyer moves up the ranks of a law firm, additional incentives of both a financial and lifestyle nature may come into play. Here, tax planning becomes all important to ensure all obligations are met while benefits are being leveraged.
Reach Out: Find Strength in Your Network
Finally, when I look at the number of women entering the legal fraternity, and the numbers making it to the top, it’s very clear to me that the days of Ruth Bader-Ginsburg being one of only nine women to graduate Harvard Law School in 1956 has passed.
With a groundswell of women lawyers practicing and coming through the ranks, there is a strong and increasingly influential community of female lawyers on hand to offer support and guidance to those entering this demanding profession.
There is a strong and increasingly influential community of female lawyers on hand to offer support and guidance.
When I created WealthChoice it was with the intention of building female networks of influence. I focus a lot on the importance of tapping into networks and support systems in my book, Corner Office Choices, and I share my own experience of developing meaningful, quality connections with a small group of trusted resources.
If you are a seasoned professional, a recent law graduate or a junior lawyer with the perspicacity to focus on financial planning right from the start of your career, then get in touch and add WealthChoice to your network today.
