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  • Writer's pictureAIM

Financial Literacy for Lawyers

Updated: Apr 20, 2022

Every year Financial Literacy Month is celebrated in April. Financial Literacy Month highlights the importance of financial education and challenges people to learn about the techniques that can help them become financially smart.

Regardless of how long one has practiced law, in hindsight, there are many topics we wish we had learned more about in law school. Topping that list for many is financial matters. While those with undergraduate classes in business may have picked up some familiarity with finance issues, few finished law school with a working knowledge of even the basics. Regardless of the practice area in which we later find ourselves, financial matters often arise. As lawyers, we are expected to know more than we do.

The list of financial matters dealt with by lawyers is extensive and is not limited to those who practice business law. At a minimum, a familiarity with, but ideally a robust understanding of these things is important:

  • Personal financial statements

  • Corporate financial statements

  • Accounting principles

  • Audits

  • Audit reports

  • Annual corporate reports

  • Business financial reports

  • Income taxes

  • Business taxes

  • Present value calculations

  • Amortization

  • Financial markets

  • Stocks

  • Bonds

  • Investment vehicles

  • Bank accounts

  • Financial tools

  • Financial planning

  • Budgeting

  • Budget reports

Unfortunately, opportunities for on-the-job training continue to dwindle for lawyers in law firms. However, financial literacy and business fluency help us generate business. So, other than waiting for a time machine, which would allow us to take the classes that we now deem helpful, what is a lawyer to do?

All hope is not lost for those who chose a liberal arts agenda in college or a law school track focusing on bar exam topics or courtroom skills and associated substantive law. There are many opportunities readily available for those hoping to learn the basics or deepen their knowledge. Technology has made those options even easier.

Below are three ways to become more financially literate.

1. Your local community college probably offers some basic financial courses which cover those topics of interest on a schedule that fits with yours.

Night classes and online courses are prevalent. The thought of going back to school shouldn’t cause you to break out in a cold sweat. You don’t have to take the class for credits. You can audit the course. A good instructor with a well-organized and aptly documented course can provide you with the basic knowledge you need and the tools to expand it as you find necessary.

2. Don’t forget MOOCs. Massive open online courses (“MOOCs”) allow you to learn from world-class educators who usually were only available to a select few in the nation’s leading colleges and universities.

There are many providers of these courses. Coursera is one example.[1] They offer courses created by many different schools. For example, they provide a series of courses through the Wharton School of Business at the University of Pennsylvania titled, “Introduction to Finance and Accounting Specialization.”[2] The series purports to allow students to learn the basics of finance and accounting. This is just one of the hundreds offered through Coursera alone. There are many other MOOC providers.[3]

3. Need to get up-to-speed quickly? The proliferation of high-quality educational material on virtually any and every topic can be found on YouTube.

Of course, you must use your well-honed skills to separate those who think they know what they’re talking about from those who actually do. There are no qualifying standards for who can submit YouTube videos, but a good communicator who can easily explain the basics of a financial statement beats the world-renowned researcher who is speaking to doctoral candidates. Viewing a few different videos that are highly rated and frequently viewed will quickly confirm whether you are on the right track.

There is no need to be disheartened by what you don’t know. The one thing we all learned in law school is how to learn. Identify what it is you want to know, research the most-effective means of learning it, and then do it. You’ll be a convincing expert in no time.

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