Four Ways to Foster Financial Well-Being in Law Firms

The cost of higher education has continued to climb and with it, the cost of law school. As a result, the amount of debt that many law school graduates hold at the start of their careers has risen to an average of over $115,000 according to Law School Transparency, a non-profit organization. This burden of debt is significant for all who experience it, and it can cause significant financial stress and anxiety for attorneys of color.

Attorneys of color often have higher student loan debt than their White classmates. They also face additional financial responsibilities and obstacles that affect their ability to advance in the legal industry. For example, attorneys of color are often expected to help support their extended families financially and otherwise, which when added to the burden of debt, keeps them from achieving financial security.

Many attorneys of color are also the first in their family to graduate from law school and land a well-paid position in a firm. As such, they don’t have the same access to a professional network as others who have generations of professionals in their family and circle of friends to tap into. This creates challenges around being able to generate new business for the firm, which is one of the key indicators of the ability to advance.

Additionally, studies show that financial stress and anxiety can cause a significant loss of productivity, up to 15 hours per month. Data from the 2017 PriceWaterhouse’s Employee Financial Wellness Survey shows that 46% of financially stressed employees say they spend three or more hours at work each week dealing with personal finance issues.

The 2016 ABA Report on Well Being in the Law reported that lawyers experience a higher rate of anxiety and depression than other professions.  Add on concerns about COVID-19 and the current social upheaval, which also disproportionately impact Black, Latinx, and other minority populations, and the impact on productivity and well-being increase substantially.

Lately, there has rightly been a renewed focus on bridging the racial divide in the law and changing the status quo. One way to work for racial justice and equity in the law is to pay attention to the economic issues of student debt.

Law firms can help their attorneys of color cope with this financial stress and anxiety (and recoup most of the lost work hours) in several ways:

PROVIDE FINANCIAL TRAINING FOR THEIR ATTORNEYS

Firms should provide financial training for their attorneys. Attorneys are largely uneducated about personal finance.  They learned about torts and contracts in law school, not about planning for mortgages, retirement, or paying back large student loans. Educating attorneys with real-time financial strategies empowers them to solve their financial issues while providing the firm with productive employees.

PROVIDE ACCESS TO MENTORING, SPONSORSHIP, AND COACHING

Firms need to provide access to mentoring, sponsorship, and coaching. Mentoring and sponsorship are essential because they provide access to and support from individuals inside the firm to help attorneys understand the firm’s culture and the process of advancement. Coaching is also important because it provides a safe space for attorneys to process their experiences, set goals for advancement, and work on skill-building outside of their immediate work environment.

PROVIDE PROGRAMMING ON STRESS, ANXIETY, AND RESILIENCE

Firms and their affinity groups should provide programming on stress and anxiety (and their effect on performance) as well as resilience-building training to equip attorneys with skills to withstand and overcome workplace adversity.

CONSIDER BENEFIT OPTIONS LIKE STUDENT DEBT REPAYMENT PROGRAMS

A fourth recommendation for firms is to consider benefit options like student debt repayment programs. Associates shouldn’t have to decide between contributing to retirement or paying off their student loan debt, as both are necessary to financial well-being. Putting programs in place to help relieve debt will tangibly benefit attorneys of color (and the firm) and help mitigate some of the additional challenges they face in an industry where the deck is already stacked against them.

Decreasing financial stress brings about improved performance in the workplace. Financial training and other stress-reducing programs create a win-win for both attorneys of color and law firms.  And everyone loves a win.