Are Lawyers In Financial Trouble?

You know, what we talk about all of the time is how lawyers can and should increase the amount of money they make through a niche practice, social marketing, with the help of cheap tech, keeping costs under control by downshifting, moving home or to small offices, and ending long commutes, as well as other means.  But, what we do not talk much about are lawyers on the edge financially.

I figure they are out there struggling because the number one complaint I hear from lawyers and law students about going into the private practice is both the lack of money and all of the debt they are carrying.

This is especially true for recent law school graduates.  On top of the large student loans they are carrying, many have been forced to incur large credit card balances to help cover living expenses during law school.

Why?  In the past it has been the easiest source of needed funds.  But, maybe not any longer.

I get fewer of these now, but when I started out I would get tons of credit card offers suggesting that I fund my law practice startup on credit cards designed just for business.  I have known a lot of attorneys that have done this over the years.

Now these lawyers find themselves in a strange place.  They feel they cannot either go out on their own or downshift, to lower their cost of doing business, because they are on this constant treadmill of debt.  But, it seems to me that this is exactly the step they need to make.  They need to downshift to maybe make less money but more in earnings so they can do a better job of paying off or down their credit card debts.

But, this might all be wishful thinking giving this NPR Marketplace report on how slippery credit card terms affect small business owners relying on cards for financing.  As the audio piece below suggests, banks are cracking down because investors are losing their appetite for securities backed by credit card debt. From the audio piece, Travis Plunkett, legislative director of the Consumer Federation of America states, "If your interest rate doubles or triples with virtually no notice, it can create chaos for small businesses."  And, I am fearful that this is what lawyers with good size credit card balances could find in store for them.

Let us listen in -