How to reduce anxiety about cash flow

If your beliefs about money are getting in the way of creating a financially successful practice, read on.

“A wise person should have money in their head, but not in their heart.” Jonathan Swift.

There’s a heated debate underway about a barrister’s economic worth and social value. But it’s not the hourly rate which forces junior barristers out of the profession.  Here are three ways to surmount the financial challenges of self-employment.

1. XX your beliefs about money

I have interesting conversations with barristers on the subject of money.  No-one seems to care very much about it until they find out their competitor’s hourly rate is slightly higher. Then they care very much indeed.

The only reason a business exists is to make money. Your practice is a business. So your practice needs to make money. There’s nothing wrong with that.

If you think of your practice income as a pleasant by-product of an enjoyable cerebral pastime, check in with your clerk to find out whether you’re charging properly for the value you provide. If you’re undercharging, consider what you could do to justify raising your fees.

2. If you can’t afford to work for free, don’t

Do you ever experience the collective guilt about the career choice to become a barrister? Even before you enrol in the BPTC your commitment to justice is measured in the number of hours you sacrifice pro bono. To secure pupillage, you have to demonstrate that you are willing (and can afford) to work for no payment. This continues for years after you’re called.

If you have the skills, experience and expertise to provide equal access to justice you’re right to help out. But if you’re struggling to pay your Chambers fees this time round, now is not the right time to be giving your most valuable resource away for free.

If money isn’t yet flowing into your practice, consider taking a part-time job. It’s what most sensible entrepreneurs do when they start. Look for a freelance gig that complements your legal work, for example, teaching, policy research or online legal journalism.  Use the opportunity to expand your network while reducing your stress around money.

3. Create a financial plan

When you have a financial goal in mind, your behaviours and choices align towards achieving it.  Whether you’re saving for a house, a dowry or to join a new set of Chambers, the decisions you make around money every day will be driven by the financial goal you have for your practice.

Sorting out your practice finances doesn’t have to be an onerous task.  But you do need a plan. A spreadsheet which tracks your income and expenditure, plus a few scenarios modeled in a graph is probably enough. Armed with these tools you’ll know at any point in time whether your practice is on track and you’ll be able to take action before everything goes off-piste.

If numbers are not your forte ask around for a recommendation for a financial planner, or ask me for mine. Martin Holden is a modern rarity who makes financial planning very easy.

How to plan your practice income and expenditure

In Junior Entrepreneur, my online programme for Junior Barristers, I provide a practice planning spreadsheet in Module 2. It calculates the typical set of expenses for a junior barrister and models a couple of different scenarios to help you evaluate your options. I also provide a monthly tracking tool so you can tell at a glance whether you’re on track to meet your financial goal. Sign up today to access freedom from financial anxiety.

Are you on track to grow your practice this year?

The financial unknown can be a source cause of anxiety.  If you’d like to find out whether your practice is on track click here to download the materials for your free practice health check.  Email me your results and I’ll send some pointers to help you take your practice forward this year. Download the materials here.

By Heidi Smith
Creator of Jurilogical.com