Financial worries add to lawyers’ on-the-job stress levels, affecting their health and their performance. Maybe your firm needs a director of financial wellness.
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The legal field is known for its high-pressure environment. This, coupled with the burden of student loans, other financial obligations and lifestyle creep, can lead to significant stress among attorneys. Add fluctuating income, especially where payouts are distinctly tied to outcomes, and financial stress can affect job performance and overall productivity.
Financial stress can also lead to health issues: According to PwC’s 2023 Employee Financial Wellness Survey, 57% of respondents said finances were the top cause of stress in their lives. The report goes on to state: “Employees can’t focus on longer-term goals or become financially resilient when their day-to-day personal finances are in chaos.”
A Law Degree Doesn’t Equal Financial Savvy
Addressing financial wellness is crucial to maintaining a healthy and productive work environment.
Education plays a pivotal role in promoting financial well-being. It is a common misconception that high earners, such as lawyers, have a solid grasp of personal finance. Lawyer Jen Lee, in an article for the Contra Costa County Bar Association, dispels that myth, stating, “[W]e need to ask for help and encourage others to ask for help without judgment.”
Lawyers’ understanding and management of their finances varies greatly. This raises the question, should your law firm have a head of financial wellness?
The Role of Financial Wellness Director
The role of a head of financial wellness within a law firm can be multifaceted. They can oversee the implementation of financial wellness programs, provide access to financial education, and offer resources to assist lawyers in effectively managing their finances.
This role could fall under the human resources department, with HR engaging experts to conduct educational sessions on financial wellness. Alternatively, larger law firms may choose to hire a full-time financial wellness officer or director, similar to the approach many have taken in recent years to support mental health and physical wellness.
For example, Morgan Lewis recently hired a director of employee well-being to enhance leadership with the firm’s Employee Engagement and Talent teams, as has Stinson. Similarly, Kirkland & Ellis hired a firmwide director of well-being in 2019 to lead a program focused on resilience, connection, fitness and nutrition.
With money at the root of so much of the mental stress, it is surprising that the same level of prioritization is not squarely focused on financial wellness. With that said, the growing emphasis on overall well-being is a step in the right direction.
Financial Education and Wellness Is Critical for Women and Minority Lawyers
Women often face wage gaps and are more likely to leave the workforce to deal with family responsibilities. Therefore, they need to be financially secure to continue their careers in the legal field.
Women lawyers face numerous challenges, including dissatisfaction in the workplace, lack of support and opportunities, and pay disparities. As a result, many women attorneys are leaving their positions at an increasingly high rate, according to a recent survey by legal market intelligence provider Leopard Solutions.
Minority lawyers, especially Black Americans, can lack exposure to wealth experience and education due to historical injustices. Attorney Lynette S. Hoag, in an op-ed for Business Insider, describes her grandmother’s experience cleaning houses in the Jim Crow South to provide context around the unique financial obstacles Black attorneys face today.
This lack of exposure can limit understanding of financial planning and wealth-building strategies. A dedicated head of financial wellness can help address these concerns and provide much-needed financial education and support.
Providing Financial Wellness as a Benefit
Law firms can offer financial wellness as a benefit in several ways. For example:
Education in Financial Basics
Firms could partner with organizations specializing in employee education to provide courses on financial wellness. These courses could cover a variety of topics, including budgeting, debt management, retirement planning and insurance planning.
For example, according to a case study, multinational law firm DLA Piper partnered with a financial education platform to build a master-class program for new international hires unfamiliar with personal finance basics in the U.K. It gave these international employees the confidence to understand U.K. banking and pensions, foundational elements for building financial stability in a new country.
Alternatively, law firms could provide access to financial professionals.
Access to Financial Advisors
Financial advisors can offer personalized guidance on achieving financial goals, helping lawyers make informed financial decisions.
For example, legal practices are increasingly offering self-directed brokerage accounts (SDBAs) within their 401(k) plans, which allow them to select their own financial advisor to manage the investments within the account, giving them custom advice and access to a wider range of investment options beyond traditional mutual funds, such as individual stocks, bonds and exchange-traded funds.
This expanded access allows employees to tailor their investment strategy to their financial goals and risk tolerance. Additionally, attorneys Bruce Ashton and Fred Reish have examined these options from a fiduciary liability standpoint, uncovering an additional benefit to the employer.
Fostering a Culture of Financial Health
Promoting financial wellness is crucial for the well-being and productivity of lawyers. Law firms can retain and support their lawyers effectively by offering financial education, providing access to financial professionals, and creating an inclusive and supportive work environment.
A head of financial wellness — whether an individual or a team carries out the role — can drive these initiatives. By prioritizing financial wellness, law firms can create a more diverse, inclusive workforce and ensure a more prosperous and sustainable future for their employees and the legal profession as a whole.
Financial wellness is not just a trend but a crucial element in ensuring the health and success of your legal team.
Related: “2 Benefits to Consider Offering Employees With Student Loan Dept” (HR Brew)
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