The legal profession is in the midst of a mental health crisis. According to an ALM survey, almost half of all lawyers agree. Lawyers are twice as likely as nonlawyers to experience suicidal thoughts. Seventy percent report that they experience anxiety. Lawyers who work long hours in private firms are particularly vulnerable.
Poor mental health affects not only personal well-being but also professionalism. Affected lawyers cite struggles with concentration. They procrastinate more. And they take longer to communicate. All due to their mental health struggles. This harms client relationships and firm performance.
Law firms have tried to fix these issues by investing in mental health resources. But these initiatives often focus on wellness and self-care programs. And one of the biggest overlooked stressors is financial pressure. For law firm owners, improving their firm’s finances may boost their mental well-being.
The Connection Between Financial Stress and Mental Health
Being a lawyer requires a tolerance for stress. Lawyers face immense pressure to manage billable hours, client demands, and lean teams.
Adding financial struggles increases these pressures. Financial struggles make it hard to set boundaries, take time off, or get enough sleep. All these adversely impact mental health. And they are avoidable.
The overlooked answer is financial management. Effective financial management relieves many of the stressors that lead to poor mental health.
Even the most successful rainmakers fall victim to wasteful spending, low profitability, and, most of all, key person risk. Effective financial management lets law firm owners hire more staff, invest in marketing, or be selective about which clients to accept. Effective financial management proves that it is not only how much rain you make that counts but also how much you keep, and what you do with it.
Key Person Risk: A Case Study
David, a successful law firm owner, seemed to have it all — a new Mercedes, exotic vacations with his family, and a cellar full of expensive wines. But behind the scenes, he felt the weight of the world on his shoulders — a common sign of key person risk. He worried that he was working himself toward a heart attack. And if he stopped working, everything he had built would fall apart. He realized he needed help. So, he spoke to a law firm financial advisor who understood his challenges and proposed a course of action. By improving his firm’s financial management, David hired more staff, invested in better clients, and regained control over his time. He proved that success is not just about making money but about managing it wisely.
Creating a Money-Making Machine
Implementing effective financial management is challenging. Most lawyers start law firms because they’re good at practicing law, not because they understand financial strategy. As such, many firms struggle because they don’t operate as efficient businesses.
To ensure stability and growth, law firm owners must change their mindset. They should treat their firm like a machine. A smooth-running machine produces a specific result consistently and efficiently.
If a machine isn’t producing the desired result, you find and fix the problem so it runs well again. For example, a washing machine’s job is to clean clothes. If your washing machine is not cleaning your clothes well, you figure out which part is not working and fix it.
Your business is no different. Its job is to make money. To turn your firm into a money-making machine, you need to understand its parts.