Carla Hoppe, solicitor-turned-founder of education technology start-up Wealthbrite, asks whether law firms owe a duty of care to younger high-earning staff.

The UK’s highest earners face immense pressure, especially in high-stakes industries like law, where late nights, overwork and meeting deadlines at any cost are par for the course. At a time of record law firm profits and NQ salaries, when many continue to suffer burnout and mental health issues, we ask: is it time law firms acknowledged their duty of care to help those high earners manage their finances?

The personal cost of high earnings

To relieve the pressure that comes with the job, junior lawyers have gained a reputation for playing hard. Despite high earnings they get stuck in a cycle of living paycheque to paycheque, making it impossible to get out of debt, save for retirement or meet other financial goals.

In a recent study* on the state of lawyer financial wellbeing, 72% of lawyers reported at least one sign of poor mental health linked to financial stress.

Lawyers reported sleepless nights, anxiety, a lack of motivation and depression among the list of mental health impacts of money worries. A significant proportion (34%) admitted that financial pressures could affect their day-to-day performance at work.

Financial management and the legal code of conduct

When applying to the Roll, financial conduct forms part of the character and suitability assessment and includes consideration of financial dishonesty and extreme financial issues such as bankruptcy.

But how much attention is paid to the assessment of the ability to "satisfactorily manage your finances"? The Solicitor’s Regulatory Authority makes it clear that the assessment is not a one-off test, instead it is an ongoing code of ethics to which solicitors must adhere.

Today’s young lawyers can find themselves jettisoned into the self-assessment tax regime and the top 5% of UK earners, and yet 71% of junior lawyers regularly spend beyond their means.

Simply paying people more is not the answer to these problems – 48% of lawyers across all grades and earnings admit regularly using credit cards because they've run out of money at the end of the month, and 36% would have to rely on credit or borrowing to meet an unexpected expense of £850. The signs of problematic financial behaviours are there, so at what point do firms step in to support their people and ensure compliance with regulatory standards?

Social mobility and financial acumen

Law firms are now making a concerted effort to monitor social mobility as part of their DEI targets. However, socioeconomic status often correlates with lived experience around money.

UK-wide data shows that all legally protected characteristics bear a negative influence on adult financial wellbeing. Legal industry data also shows that lawyers from low socioeconomic backgrounds are underperforming compared to their peers on financial wellbeing.

In short, lawyers from diverse backgrounds are at greater risk of financial instability. Without providing the tools to build financial resilience, DEI strategies risk falling short of fully supporting the progression of diverse talent in work.

Building a financially resilient workforce

You can start small by signposting your employees to existing resources on financial literacy and normalising conversations about money within the workplace. However, firms that want to stand out from the competition will have to do more to cut through the noise.

As a subject that has a reputation for being “dry”, firms that move away from outdated financial engagement strategies, such as email signposting or troves of written blogs and articles, can help employees struggling with email fatigue and information overload.

Firms can improve engagement by incorporating digital learning programmes or in-person training with practical, real-life examples to make financial education more enjoyable.

The cost of inaction

Law firms that ignore their employees' financial education do so at a significant risk and cost to their business and their people.

At one end of the spectrum, employees with high levels of financial acumen are less stressed, perform better and may be less likely to leave their firms.

On the other hand, employees with problematic financial behaviours pose risks, including increased absence, reduced performance and at worst financial misconduct or even the misappropriation of funds, jeopardising the firm and its reputation. None of these outcomes should be a cost law firms are willing to bear.

It’s time law firms acknowledged their duty of care and prioritised the financial education of their people alongside earnings and profitability.

*Data on financial wellbeing among lawyers comes from the Wealthbrite Financial Wellbeing in Law Review 2024.

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