7 strategies for lawyers to manage their finance

By Jonathan Soto posted 05-24-2019 01:39 PM

  

Managing finances is essential for any lawyer. Finances represent an important commodity for all lawyers, even for those who are just starting their carriers out. Keeping all of your finances can be troublesome and a nerve-racking process. In the modern era, money is never far away from our thoughts, and lawyers just have some more problems with it.

Finances may often keep worrying you that you have to keep asking yourself some of these questions:

“Will I have enough money to cover all the costs for next month?”

“What’s the next big expense?”

“Is this going to be enough before the next referral is accepted?”

These are definitely the most common questions, but you don’t have to worry too much. They give you another reason why your money management practice should be on a high level. There are answers to these questions and this article will hopefully help you to boost your incomes.

Know your budget and what you want

No matter how rich you are, if you don’t know exactly what you want and how to achieve what you want will cost you a lot more money than expected. Knowing exactly what you want to do will make a processing plan a lot simpler and your goal will be in the focus. Finances play an essential part here.

Your budget will help you with organizing costs. It is also directly connected with creating a concise and clear strategy in achieving your goal.

For example, imagine an attorney that can’t afford a private office but needs an office address. That person needs to consider a workstation or a virtual office. Once the decision is made, our imaginary lawyer will have a clear vision of their budget and how much is he or she going to spend on office space. This may seem like a very obvious and a simple thing to say and understand, but many people don’t stick to the budget planning and that’s what it hurts them in the long run.

Bank account for the company

Keeping your personal finances separated from your business finances is always smart if you consider yourself a professional. Your expenses will be a lot harder to track if you keep all of your finances in one account.

You don’t want to wonder if you spend extra money on office supplies or groceries when you look at your bank account.

Another essential step is to choose a bank that will suit your needs. Certain types of banks are better for large corporations and huge businesses, whereas others are not. It shouldn’t be hard to research and find out what bank suits your needs the best. Just don’t use your business account for your personal expenses.

Keep records

It’s really crucial to keep track of your all expenses if you don’t want to be financially surprised. Don’t let yourself to be in a position where you’re shocked when you check your bank account, no matter if the shock is good or bad.

This task is nothing complex and you shouldn’t find excuses for not doing it. You can do some of the work with the help of the IVA debt calculator. This website will help you to manage your budget in a lot of different ways.

Negotiating with vendors


Sometimes you might not be able to deliver a package to a location because you’re too busy with conference calls or just any type of work. Messenger service is a life savior in these moments, for example. You should accept this and that’s totally fine.

However, almost all vendors will usually represent themselves as there is no room for discussion, but this is exactly where negotiation plays a crucial factor. You can open yourself up to exploitation if you always say “yes” no matter the cost. This can really backfire in the long run.

Keep in mind that you won’t be able to negotiate with certain services, for example with FedEx.

Your personal costs of living

If you’re new to the industry, you probably won’t be making a lot of profit. No profit, in fact. However, you don’t have to worry since this is a common thing in business.

However, according to statistics, you should expect to begin making a profit at some point, but keep in mind that this will require a lot of hard work. This will require you to understand your minimum costs of living. You may have to make adjustments often since this amount can change frequently. Try keeping everything in control and rearrange your list every three months, or maybe each month if you really need to.

This will also help you with your personal finances. Your business will be influenced if you manage your personal finances well. This is because your business is directly affected by your personal finances.

Emergencies

A “dark days” budget is essential if you want to keep yourself out of trouble. You never know what will happen, you may experience a substantial loss of clients, you might get sick, and an unexpected tragedy might occur. Hopefully, this won’t happen, but you never know.

You need to have a budget for this if you want to have a peaceful sleep. You will always be reassured that you have a financial back-up plan if something ever goes wrong.

Control your ego

You may often hear that lawyers are starting their solo businesses because they want to be their own bosses. This is great for natural leaders, and working solo has a lot of good sides. However, you need to understand everything about working solo before you actually start it. Your financial decisions will play a crucial part here.

Don’t let your ego eat you. This may result in bankruptcy and a huge financial burden that you can’t deal with.

Conclusion

Managing finances is something that you can definitely do on your own. It’s not hard but takes some time to arrange everything and keep everything in a good spot. Consider consulting with someone who is more knowledgeable on the topic if you really think you’re bad with finances.

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