Reply to Yes, tiny violin - did anyone else struggle first years of law partnership?

Forum Index » Money and Finances

Reply to "Yes, tiny violin - did anyone else struggle first years of law partnership?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]What's the firm's recent financial situation? Most firms in AmLaw 100 had record years in 2020 and 2021, picture very different in 2022/23 due to significantly slowdown in deals last year. So you may have made partner at just a difficult cyclical moment, where you are dealing with all the "start up" costs of partnership but also seeing smaller payouts due to belt-tightening. It should even out longterm, but now might be a bit of a pinch point.

Firms don't always do a great job of preparing partners for the financial challenges of that shift. Do you have a good financial manager you can trust? Do you feel that you properly structuring your finances with regards to taxes? I would focus on finding a good, conservative advisor to help with tax and money management, and they will help you structure things so you can avoid cash flow issues during these initial years when the capital contribution and shifting from ordinary income to distributions can be tricky.[/quote]

Thank you. We need to do this. We unfortunately [b]bought a new home [/b]and signed on for private school for another child right before making partner, not aware how cash flow would change. Partnership was not from within but rather from government so we hadn’t saved. Just stressed about cash flow.[/quote]

I haven't read all of the responses but I think the bolded was a HUGE mistake. You probably bought an expensive new house based on your salary projections just to realize afterward you weren't actually bringing home as much as you thought.

My DH is a big law partner and the first year or two we definitely did not make any major purchases since the tax bill was way higher than when he was a senior associate.  [/quote]
No, it wasn’t a huge mistake. That part is fine. [b]We bought a home based on the combined salary we had at the time. [/b]Our mortgage is not that high. We were renting previously. Our home has also gone up almost a million in value. The issue, once more, for the wives in the back, is that we are making much less per month than we were. The smug judgments aren’t helpful, really. They’re just not. Keep them coming, though, it must make you feel good. [/quote]

PP here - thats was fine when you were making what you were making at the time.  But now you aren't bringing in as much and can't afford your house/lifestyle. I am just saying making a large purchase like a home during your first year of partnership isn't the smartest decision. Obviously that ship has sailed. But for others who are in a similar position I would highly suggest not doing a large purchase during your first year until you know how your taxes/contributions, etc shake out.

Best of luck to you - a HELOC seems like the best option. [/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics