In the midst of the continuing economic uncertainty, even affluent attorneys that are free of student debt have voiced concerns about their financial stability and retirement readiness. Law firms that listen and respond to their worries can gain valuable competitive advantages.
Financial Stress is Widespread Among Attorneys
A 2021 American Bar Association (ABA) survey of 1,300 members under the age of 36 found that 90% of the respondents borrowed to fund their education. About two-thirds of all respondents reported high or overwhelming stress over finances in general. More than half — including those who did not borrow or reported no student debt at graduation — said they sometimes or always worry about meeting monthly living expenses, having the inability to do the activities that they would like to do or living paycheck to paycheck.
A majority of those with debt over $100,000 agreed that their loan obligation has caused them to feel depressed or hopeless. That is not surprising because mountains of debt, whether from student loans, mortgages or otherwise, can make it seem impossible to save for other goals, like retirement and children’s education.
For some of the respondents to the ABA survey, answering these questions might have been one of the first times that they have been so forthright about their financial wellness-related fears. Often, attorneys are reluctant to discuss such thoughts because they are embarrassed or feel like failures. Keeping these thoughts to themselves may not only damage their emotional and even physical health, but also prevent them from seeking assistance.
Financial concerns can have an impact on their performance on the job, too. Stress is well known to affect everything from sleep to decision-making. Working in the legal industry tends to be stressful as it is, without the compounded stress from financial issues.
Moreover, it is not just millennials who struggle with student debt or other financial issues. A survey sponsored by AARP found that 31% of baby boomers and 38% of Generation Xers said student loan debts stopped them from saving for retirement. And attorneys tend to retire later in life than their contemporaries in other fields, which sometimes means that they do not start thinking about retirement planning as early as they should.
Related Read: Millennial Matters: Understanding Your Younger Attorneys
How Law Firms Can Help
Less than one-third of the respondents in the ABA survey have obtained financial advice from a qualified professional, such as an investment advisor or CPA. This gap suggests an opportunity for law firms to provide financial wellness employee benefits to its attorneys. Such benefits can help recruit and retain attorneys, while also reducing the risk of financial-related distractions leading to mistakes on the job.
A range of options for educating and assisting attorneys with financial wellness is available. At the most basic level, a firm can offer counseling that helps attorneys make the most of its retirement plans. Firms also can provide expert-led workshops on topics that include budgeting, investing and managing debt or bring in third-party financial planning services.
For more information, contact Joy Long at [email protected] or 312.670.7444. Visit ORBA.com to learn more about our Law Firms and Lawyers Group.