Financial Literacy for Lawyers

Attorneys Insurance Mutual
Apr 28
2 min read

Updated: 6 days ago

Being financially literate means having the knowledge and skills to make informed financial decisions.

Lawyers play a crucial role in guiding clients through an extensive list of financial matters, and that list is not limited to those who only practice business law. At a minimum, it is important to become familiar with the things listed below.

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

Financially literate lawyers enjoy more client satisfaction and trust. They also make better firm management decisions and are more efficient. And, they are more likely to build a sound personal financial plan that will allow them to achieve financial independence and ultimately, retire with confidence. Because April is Financial Literacy Month, let's take a look at what you can do to ensure you are financially literate.

So what can you do to enhance your financial literacy skills?

Take CLE classes and seminars to sharpen your understanding of the types of financial matters you routinely encounter in your practice, as well as explaining basic accounting principles and teaching how to read profit and loss statements, balance sheets and financial reports. Not only is this education helpful in running a law practice - a financially literate lawyer is better equipped to help clients navigate their personal and professional financial situation. Lawyers must be able to effectively communicate these concepts so that their clients can make sound decisions that align with their immediate and long-term case goals.

Seek advice from experts who specialize in law firm financial management. Consultation with financial pros can give you the information you need to make wise financial decisions for your firm.

Use financial management technology made for law firms to help automate financial management.

These steps will help you identify inefficiencies, manage cash flow, and understand available resources for growth and case costs. And just as importantly, they will arm you with financial knowledge necessary to satisfy your ethical duties and keep your clients happy.