In my country, lawyers are generally perceived to be persons of great wisdom, intelligence and great wealth. Needless to say, lawyers are revered! And unduly so. Let me explain.
Consider outgoing US Solicitor General Don Verrilli’s five-figure credit card debt! How could a former law partner have so much debt? I suspect his USD 4 million net worth may not be quite so liquid. US judge Sonia Sotomayor is deep in her five-figure dentist bill debt and credit card debt. She has a six -figure income!
Lawyers are trained in the law, never in finance
Most lawyers enter law school straight out of college. They don’t usually have a background in finance. Most are fully funded by parents who often neglect to teach their children the basic concepts of budgeting and getting their own bank account. You wouldn’t believe the level of unawareness I’ve encountered among peers when I mention such concepts as a bond or stock or ROI on an investment. This is understandable, given lawyers’ lack of training or education in finance, personal or otherwise.
Lawyers sometimes fall prey to misinformation
Case in point: I received a recent job offer with a breakdown of salary and benefits. These are usually presented in gross amounts, to (mislead?) make the offer appear better than it really is. After calculating the net pay*, I noted the offer would be a 30% pay cut from my current pay, or more or less a quarter of a million annually lost due to said pay cut.
I fell prey to the company’s sales talk – the company growth potential, the trainings and the like. I actually considered living on less. In order to fully consider the offer, I prepared a budget based on the proposed compensation. I would be saving less, just 20% of my pay in order to live comfortably on the lesser salary. I would not be able to accelerate the equity payments on my condo. So I passed.
If there were no resources to calculate the net pay, I would’ve fallen prey to the corporation’s misinformation!
Lawyers are expected to keep up appearances
Unfortunately, potential clients often judge lawyers’ competence on the basis of their appearance – clothes they wear or kind of car they drive. I can’t count the number of times people wonder why I live so frugally, given my perceived stature as a lawyer and high income.
I guess this is why most lawyers succumb to spending their money before even reaching that income level that is enough to cover their spending. Simply put, lawyers often spend beyond their means and thus often carry credit card debt. The law firm culture perpetuates this unwise spending. There is often an unspoken rule in law firms that lawyers should not take a jeepney (or bus) to work, or anywhere! This rule already applies even when the law firm just pays you minimally to work for them. Crazy, I know.
20 something lawyer
* To calculate the monthly net pay (less SSS, Philhealth, pag Ibig contributions) I used the android app Sweldong Pinoy.