Did you know that certain national and international law firms allow their associate lawyers and partners to invest in clients? Many local and regional law firms do too. Being allowed to invest in your clients means being allowed to invest in businesses that you already know inside and out. From top people, to current and future liabilities, to a strong business plan and cash flow. Different law firms offer different opportunities, and it is important that y0ur law firm fits both your career goals and your financial goals.
What are advantages and pitfalls to investing in your clients?
- Yes, it can be lucrative;
- Yes, it can be risky;
- Yes, it can reward entrepreneurship; and
- Yes, it can strengthen client relationships.
As one successful mid-level associate, at a national law firm told me:
“My client investments have become a major source of secondary income,
aside from my salary and potential bonus.”
Having the ability to invest in your clients can be an important financial advantage for you, and your family in the long-run. That said, putting your hard earned money into this type of arrangement is not for everyone. Some lawyers are natural entrepreneurs and some are not. This creates two models, or paths:
- Some great law firms focus entirely on grooming you to be the next generation of lawyer, for their already acquired institutional clients; and
- Some great law firms reward entrepreneurship, so when you find new business, you can also invest in those businesses as they grow.
One model or path is not better than the other. One of them, however, is better for you.
Stop… take a moment, and look at your future career in law. If it brings up questions, then you can ask them.
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