An Economic Downturn Will Be a Reality at Some Point—It’s Time to Prepare
Depending on who you listen to, a recession is “almost certainly coming” or only a 40 percent likelihood; perhaps it is already here. But all experts seem to agree (and history and experience suggest) that recessions are a normal part of the economic cycle. So what can you do to prepare for an economic downturn affecting your job or employer? Here are three suggestions based on my experience.
Build Your “Layoff Lifelines”
My network brought me two opportunities: firms that were actually hiring during the largest economic downturn since the Great Depression. Within an hour of being told I would be laid off, I edited my resume and sent emails to all of my contacts at firms in the area to ask them if they knew of any opportunities and to send me any they heard of in the future. While some of the emails were ignored, and most were responded to with sympathy, I received one response that saved me. A partner at the firm where I started my career informed me that they had a massive document review project for which they were hiring contract attorneys and that she would add my name to the list.
Later that summer (while I was doing that three-month contract gig), I received an email from a friend telling me that the managing partner of a Chicago law firm was looking for an associate to hire. The friend was someone I knew in high school, and I had done some volunteer work for him when he ran for state representative near our hometown. He heard about this opportunity through our alumni network because (of course) the hiring partner also attended our high school.
How do you build a network that can send you opportunities in the direst times? During my recent Litigation Radio podcast interview, radio and podcast celebrity Jordan Harbinger instructed listeners to make a list of 10–15 people they would contact to ask for advice on what to do next in the event they were let go from their current position. After making that list, “reach out to them now,” Jordan said, “when you don’t have an agenda or need anything specifically.” Those conversations are, therefore, less awkward (because they’re agenda-free), and it gets the momentum going for those relationships.
Prepare Yourself Financially
The standard layoff package plus the document review job were sufficient to keep my family’s finances afloat. But if neither came through—and we were relying only on unemployment compensation—we definitely would have been in trouble financially. Before being laid off, we lived comfortably, but our finances were on autopilot; we had no plan other than paying our bills and putting a little bit toward retirement and our kids’ college accounts. That needed to change after I started working at a mid-size firm, where I was making less money. We built an emergency fund and started planning for our financial future if there was another bump in the road for my career.
Not surprisingly, many financial experts want to advise you, and there are many plans you can follow. Do the research and find out which plan is best for you and your family. The one thing that (perhaps 99 percent of) financial experts seem to agree on is that having an emergency fund is the first step to getting your financial house in order. Whether you start with $1,000 heading toward saving three to six months of expenses or have some other goal, you must start planning for a rainy day. Even if you don’t lose your job, you will have some unexpected expenses (e.g., a broken water heater, a child’s broken arm, an air conditioner that goes out, or a destroyed cell phone—all things that have happened to my family). You’ll have to put those expenses on a credit card or get a loan if you don’t have an emergency fund.
Keep Your Head in the Game
As more people lost their jobs around the country and my billable hours began to dry up, my mindset became more paralyzed. I became wrapped up in the bad news around me, and I just waited for the pink slip to come every day. Even when small billable assignments came my way, I procrastinated, thinking, “why should I even bother because I’m just going to be let go anyway.” The world was coming to an end, or so I thought.
Looking back on those days, I lost sight of the big picture: no matter what job I have (or don’t have), I am a professional here to serve my clients and the public with skills to help people. There were so many people who needed help, yet I was focused on myself and my sorrows. I should have turned down the volume of the television and radio and turned up my awareness of those who needed help—my clients, the people at my firm, those no longer with the firm, and my community at large. Now, years later, I’m active in my community and have mentored a lot of young attorneys and law students along the way. I try to remain positive (did I mention a few sessions of therapy after I got laid off helped, too?), focus on the opportunities, and look for the doors I can open for others and myself (with the help of others).
Take Action Now!
An economic downturn is a certainty—no matter when it comes—and it may or may not affect your current employer. Taking action now can help prepare you for whatever comes your way. Go ahead, pick one thing from this article and get going!