Wealth Management For Attorneys

Helping you acheive your financial goals.

B|O|S specializes in helping attorneys like you achieve your financial goals with peace of mind. We have built an attorney-focused practice by understanding the unique challenges and opportunities facing law partners.

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Early Career

Meet Angela1. She came from a family of doctors, but was more interested in saving lives through justice than a scalpel. (And, frankly, she did not like the sight of blood.) Angela attended Stanford Law and was thrilled to be hired by the firm at which she interned for two summers. She studied and passed the bar, then settled into 80+ hour work weeks and an apartment full of roommates.

Angela’s first paychecks barely covered her rent, food, and dry cleaning. But she remembers feeling pride earning her own way and establishing independence.

It was a wonder she met her future husband so easily, since she hardly had time to date. She and Michael, an elementary school teacher, were married during her second year with the firm, and they moved into a small apartment. While they had two incomes, they still struggled to make ends meet. Their dual salaries and combined savings created more questions than answers as they considered accelerating payment of law school debt, building a bigger emergency fund, saving for a home, and contributing to their retirement plans. It seemed clear that they should contribute enough to their retirement plans to take advantage of both the company matches and growth through compounding; however, less clear was the decision whether to contribute to a regular 401(k) or a Roth 401(k).

Beginning your career, you have many financial decisions to make that will influence your future. These choices will set the course for your life, and determine your experiences now and down the road. Establishing a solid financial foundation – and good financial habits – are important steps towards gaining the freedom and flexibility to live life the way you want.

1The person and personal story depicted is fictitious but the scenarios summarize financial situations and considerations that attorneys at different points in their careers may face.

Challenges & Opportunities

  • Lower income
  • Law school debt
  • Limited time
  • Combining dual incomes when you get married
  • Determining what you can/cannot afford
  • Partnership track obligations

Solutions

  • Learn to develop and manage a budget
  • Put savings on auto-pilot
  • Pay off school debt
  • Build an emergency fund of 6-12 months
  • Start saving for retirement, especially in 401(k) account to capture company match, and to gain the benefits of compounding
  • Consider creating a financial plan to help organize your savings and spending; the plan could reflect capital requirements for firm partnership or even establishing your own firm

Senior Associate / Jr. Partner

Meet Dave1. His wife Samantha just learned she was pregnant with twin boys. They moved into a starter condo, securing the down payment with some savings and a little help from their parents. As life became busier, they debated on the merits of Samantha working and hiring a nanny. She decided to continue working as she felt strongly about her career and they felt they needed the dual income.

Their assets started to build but debts accumulated in tandem as they took on a mortgage, cars, and child care expenses. Savings became more critical as they began preparing for their boys’ futures and their own. They met with their financial advisor to discuss tax-efficient investing, including establishing 529 college savings plans and Roth IRAs. Their advisor also helped them navigate life and disability insurance and recommended the establishment of a basic estate plan, important to protecting their family from unforeseen circumstances.

At this growth stage, you are likely ready to establish a home and a family. With multiple priorities, you need to organize and strategize for your future more formally, including establishing a plan and a tax-efficient portfolio.

1The person and personal story depicted is fictitious but the scenarios summarize financial situations and considerations that attorneys at different points in their careers may face.

Challenges & Opportunities

  • Developing a financial plan
  • Investing in a tax-efficient portfolio
  • Saving for retirement
  • Saving for your children's secondary education

Solutions

  • Work with a financial advisor to establish a tax-efficient investing strategy
  • Work with a financial advisor to establish a tax-efficient investing strategy
  • Invest in a 529 college savings plan
  • Establish an estate plan to protect assets and help ensure proper guardianship/care for your children

Partner Phase

Meet William1. William and his partner have accumulated assets over time, and they considered purchasing a vacation home in Palm Springs. They concluded that the costs of owning a second home far outweighed the benefits, so they created a budget for periodic vacations. Moreover, they did not anticipate benefitting from any kind of tax advantages. (If they used the home as a rental income property, losses could be deducted against only the rental income not personal income. They also could not use the property for personal use more than 14 days in a given year.) In addition, they established a donor-advised fund using appreciated securities from their investment account to enhance tax advantages and more easily manage their charitable giving.

As William began increasing his net worth as well as his profile at the firm, his liability exposure also went up. While his firm covered errors, omissions, and malpractice, he needed to make sure he was adequately covered for personal liability. He worked with their financial advisor to determine their family’s total net worth and purchased an umbrella policy to protect their wealth.

Periodically William would contact their financial advisor to discuss private equity funds that came his way as a partner. He wanted to confirm that they fit into his overall portfolio in terms of their impact on liquidity, diversification, and overall risk management. As time passed, William and his partner’s boys went off to college, and William continued to work very long hours. His partner had retired a few years earlier, and he began to consider what it would be like to transition from active partner to active retirement.

Once you’ve made partner, you hit your stride and begin to accumulate assets. The transition from employee to equity partner takes careful planning and attention to help ensure a steady cash flow. After a few years, you will begin accumulating more income and will then need to focus on present and future priorities, including your retirement and your children’s education.

1The person and personal story depicted is fictitious but the scenarios summarize financial situations and considerations that attorneys at different points in their careers may face.

Challenges & Opportunities

  • Transitioning from employee to equity partner
  • Maximizing income
  • Maximizing tax efficiency
  • Minimizing financial risks/safeguarding against unexpected liabilities
  • Prioritizing savings: retirement, children’s education, second home, charitable giving
  • Creating adequate liquidity to cover expenses and taxes

Solutions

  • Work with a CPA to estimate/adjust quarterly tax payments
  • Establish a detailed budget delineating income and expenses
  • Partner with a financial advisor to determine sources of available cash and to fine-tune your financial plan, asset allocation, and investment strategy; optimize for tax efficiency
  • Establish insurance and charitable giving plans, and work toward meeting your goals
  • Begin defining your retirement vision and timeline, optimize your retirement plan vehicles for tax efficiency, and make consistent contributions

Post-law Planning

Meet Sharon1. After 38 years with the firm, Sharon, at age 63, decided to “retire” on a part-time basis. She continued to work a few days a week for the next two years, helping to transition her major clients to a new team. She also remained active on a number of non-profit boards, and was glad she did not take a cliff retirement. Going to the office a few days a week gave her – and her husband Morgan – needed structure and ongoing income. With earned income soon coming to an end though, Sharon and Morgan had to determine how to secure the income their family needed to live throughout retirement. With their financial advisor, they evaluated their three main buckets of assets, which totaled $4,000,000: traditional pre-tax retirement savings (401(k) and IRA), tax-free income (Roth 401(k) and Roth IRA), and traditional after-tax savings (brokerage).

Their advisor guided them on the most tax-efficient way to draw down income and analyzed how much spending their nest egg (plus Social Security payments) could reasonably support each year of retirement. Sharon and Morgan also worked with their advisor to calibrate portfolio risk, recognizing that they would no longer be adding to their nest egg over time.

Sharon and Morgan have been enjoying retirement for the past 10 years. They have spent time traveling, including visiting their children on the East Coast, and volunteering. Sharon says that if it weren’t for the careful and mindful planning from the start of her career she would not have the peace of mind to enjoy retirement. Although managing their finances took a lot of work and discipline, she is confident in their current and future income as well as the livelihood of their children.

Deciding when and how to retire is both exciting and unsettling. Managing the new realities of retirement and not earning income – from new-found time to drawing down assets – are pivotal challenges that must be addressed smartly. A financial advisor can play a key role in guiding you to understand the many issues and opportunities that lay ahead, and how to manage them for success.

1The person and personal story depicted is fictitious but the scenarios summarize financial situations and considerations that attorneys at different points in their careers may face.

Challenges & Opportunities

  • Retirement planning
  • Income planning
  • Liability coverage
  • Estate planning
  • Financial support for your children and grandchildren

Solutions

  • Work with your financial advisor to estimate your retirement income, assets, and expenses (including medical)
  • Consult with your advisor about reallocating your portfolio as you transition to living from your assets, focusing on risk versus return
  • Determine the most tax-efficient way to draw down your assets and take Social Security payments
  • Reevaluate your insurance coverage
  • Amend your estate plan
  • Consider tax-efficient gifting strategies to your children and/or grandchildren

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B|O|S  is proud to have been recognized as an industry leader in the registered investment advisor space. These accolades and peer-recognitions reflect not only our passion, but also our deep commitment to every aspect of our relationship with our clients.