Many lawyers find themselves trapped in the so-called “golden handcuffs” where their inflated lifestyle requires them to stay in a high-pressure career.
But some young lawyers are trying to combat lifestyle inflation.
Leah Klassen, who practices wills and estates and family law in Ajax, Ont., describes herself as someone who “tries to rebel against the traditional view of a lawyer.”
But even Klassen says that she sometimes feels societal pressure to look, act and spend like a lawyer.
“When people hear that you are a lawyer, they expect you to live a glamorous lifestyle,” says Klassen, who began her legal career in February 2016 as an associate lawyer with Marie G. Michaels and Associates. “Sometimes I find myself justifying spending money on my appearance – things like manicures and my wardrobe. I think that has a lot to do with the perception that lawyers who look good and wear designer clothes are successful. I don't actually subscribe to that, but I find myself justifying those kind of purchases anyway.”
Many people don’t realize the cost of law school and the salary of a new associate, which leads to unrealistic expectations, says Klassen.
For example, she says when her landlord found out that she is a lawyer, he was shocked.
“He said, ‘Wait! Aren't you rich? Why are you living here?’” recounts Klassen. “I had to laugh. I said, ‘No. Not quite.’”
She also finds that her friends who are not lawyers often have misconceptions.
“They have a perception of how much lawyers make and when you break it down for them – this is how much debt I have and this is how much I'm making – people are usually surprised,” she says.
Klassen says that she tries not to give in to societal pressure to live a certain lifestyle, even when she sees her peers who are also new lawyers “spend money even though it's not in their budget right now either.”
“I’m one of those people who tries to rebel against society’s view of what a lawyer should be,” she says. “But I still feel pressure.”
Gordon Plewes, a financial advisor with Raymond James Ltd., agrees that new lawyers often feel pressured to live a certain lifestyle.
“Often there is societal pressure to live up to a status quo because new professionals feel we will not be accepted or won’t land the big client if we do not appear to be at a certain level,” says Plewes, who is based in Prince George, B.C. “The standard of ‘fake it ’til you make it’ is all too prevalent.”
However, Plewes cautions lawyers not to give in to societal pressure to inflate their lifestyle to an unrealistic level at the beginning of their careers.
“The truth is, much of this attitude can increase our chances of failure because it is unrealistic and unsustainable early in a career. It can lead to higher stress, pressure and the use of debt and credit in an irresponsible way.” he warns.
Klassen says she deals with this pressure by putting debt repayment and savings at the top of her list of priorities.
“For my budget, a certain amount goes to debt repayment, a certain amount goes to savings and then whatever is left, I prioritize based on my lifestyle goals,” she explains.
“Travel has always been a priority for me,” she adds. “I want to go back and visit my family in Manitoba every couple of months so I will spend less on entertainment and less on my wardrobe in order to meet that goal. Sometimes I have to say to myself, ‘No, you don’t need those clothes or that fancy dinner,’ so I can spend money on what my priorities are.”
Plewes says that young lawyers must also realize that building wealth and a successful career takes time.
“Comparing your lifestyle to someone who is 30 years in is simply not fair,” he says. “Be patient and start with the fundamentals of building savings, paying off debt and keeping monthly payments to a minimum.”
For example, Plewes says that most young lawyers should not expect to buy their dream home right at the beginning of their careers.
“Your first home should be something that is manageable and can be paid off effectively. Ten to 20 years down the road, when the house is almost paid off because you have been able to make extra payments, you make the move to your dream home,” he recommends. “This will significantly reduce your interest cost over time and put you in a position of flexibility, allowing you to save in other ways and deal with life’s unexpected emergencies along the way.”
Both Plewes and Klassen recommend making savings a priority.
“I plan to put savings aside with every paycheque and eventually move that into a retirement plan,” says Klassen.
Plewes agrees that young lawyers should build retirement savings into their budgets from the beginning.
“One of the biggest mistakes that people make is they underestimate the importance of starting to save early,” he says. “What they don’t realize is it will take at least 10 years to get their savings to a point where the compounding interest starts to build in a significant way.”
Plewes says that one of the biggest regrets of people retiring today is that they wish they had started to save earlier in their careers.
“The thought of ‘I have plenty of time’ is false,” he adds. “The reality of our world today is we have 35 working years to build enough wealth to fund 35 years of retirement. By starting early, this can be done quite comfortably.”
Carolynne Burkholder-James is an associate lawyer with Heather Sadler Jenkins LLP in Prince George, B.C.