Cover Story: How do lawyers spend their money?

It’s okay to admit it: most private-practice lawyers are well paid. But it can be hard to know what to do with all that money. How to invest, what to splurge on and how much to give to charity — it’s all a bit of a mystery. So we got six Toronto partners into one room to find out how they get a handle on their money.


Our money experts

Andrew Alleyne, Fasken Martineau DuMoulin

Andrew Alleyne
Fasken Martineau DuMoulin
Technology

Linda Misetich Dann, Bennett Jones

Linda Misetich Dann
Bennett Jones
Securities

Georges Dubé, McMillan

Georges Dubé
McMillan
Corporate

 

 

 

 

 

 

 

Hilary Goldstein, Buchli Goldstein

Hilary Goldstein
Buchli Goldstein
Entertainment

John McLeish, McLeish Orlando

John McLeish
McLeish Orlando
Personal injury

Heather Zordel, Gardiner Roberts

Heather Zordel
Gardiner Roberts
Securities

 

 

 

 

 

 

 

 


 

Why you should blow your first paycheque

Daniel Fish

Meet your moderator:
Daniel Fish
Precedent Magazine

Daniel: How did you manage the transition from cash-strapped law student to well-paid associate?

Andrew: It’s funny to think back. As a student, I was so frugal. But once the paycheques rolled in, I spent more and more, until I was living right at my means. Then one day I thought, What the hell is going on here? Why am I spending all my money?

Daniel: The more money you make, then, the less prudent you are?

Heather: Of course! But that’s not a bad thing, at least in the early days of a legal career. Coming out of law school, you’ve been living poorly for a long time. So you have some catching up to do. Buy nice clothes. Take vacations. I don’t think anyone should worry about saving when they’re under 30.

Associate earnings

Live and earn
Most associates have a fair bit of money to spend, and it creeps up each year. Here’s a look at the average annual earnings of associates at large firms in Toronto.

Daniel: Any other advice on how to spend those early paycheques?

Heather: Don’t use it to buy a house too early — especially if you don’t have a family or actually need one. Every associate wants to do this right away, but they forget something crucial: it costs a lot of money to nurture their legal careers. Instead of spending their income on mortgage payments, they should be taking clients out to lunch, going golfing, flying to conferences or joining clubs. That could be the Toronto Board of Trade or the National Club. If they want to make big money later, that’s what they have to be doing.

Andrew
: And remember, housing is not an investment. It’s a building you live in. Even if the price rises, and you sell it, you still have to buy another one that costs just as much money.

Ed. note: John flashes an enthusiastic thumbs-up.

Daniel: That means junior associates should rent?

Andrew: That’s what I did for a decade. And I was happy with that.

Hilary: Well, I bought a house early because I wanted to get into the market. And I bought at a time when prices seemed to dip [Ed. note: in the early 2000s], so I thought it was a good investment.

Investing for dummies

Hilary Goldstein

Hilary Goldstein

Daniel: Once an associate hits 30, buys that first house and wants to start saving, what’s the best way to do so?

Linda
: Here’s what I do. Each month, I pay my fixed costs — mortgage payment, bills — and put some money into savings. Then I have the flexibility to use the rest on whatever else I’d like, from a vacation to a new phone to a new suit.

Daniel
: Does anyone here keep a budget?

Ed. note: no one raises a hand.

Georges: I don’t itemize my life on a spreadsheet, but, in my head, I will casually allocate some money for food, clothes or travel.

Daniel: How do you invest?

Georges: First, I don’t do it myself. I don’t know how. Over my career, I’ve kept my eyes peeled for colleagues and friends who are great with money, and asked them which professionals they use. But to manage my own money would be like self-dentistry.

John: When I was young, I made that mistake. I thought I could invest in the stock market on my own. I’d hear from someone who’d heard from someone that I ought to buy shares in this or that company. I should have shorted everything I bought! So now I put everything in an investment fund that someone else manages.

Daniel: And it’s always stocks or mutual funds? No savings accounts or GICs?

Andrew: Those don’t make much sense. My wife, for example, is finally putting some of her money into the market, after a lifetime of using GICs. For long-term investments, it’s a no-brainer.

Enjoying the journey

Daniel: What sorts of things have you splurged on over the years?

Hilary: Jewellery, which I often buy at milestones. When I became a partner at my old firm, Heenan Blaikie, I bought myself a really nice watch.

money spent on clothes

Big spenders To look as good as they do, lawyers in Toronto are happy to spend money on clothes — on average, about $4,100 a year. (That applies to both men and women.) But some spend far more. Here’s a breakdown of how much lawyers put toward their wardrobe each year.


Linda
: I do the same thing. I think saving is essential, but it’s important to enjoy life, too. Soon after I made partner, I found myself on Fifth Avenue in New York City. So, to treat myself, I bought a string of pearls. That somehow seemed like the adult thing to do. I still wear them sometimes, and it makes me remember that moment.

John: I have built myself the nicest house on the planet! It’s a Gluckstein-designed house. [Ed. note: Brian Gluckstein is among the world’s most famous interior designers]. And my wife and I take lots of vacations. I’m going to Aspen in a few weeks, then on a 10-day cruise in the Mediterranean a few weeks after that.

How to get rich

Daniel: Who are the richest private-practice lawyers in Toronto?

Georges
: I would think the top criminal lawyers, who have the highest profiles and can bill the most.

Daniel: So Marie Henein tops the list?

John: I don’t think so. Here’s why: Marie Henein’s clients want her on their cases. And that limits how much money she can make. The best-paid lawyers spend their time bringing in new clients — then they delegate most of the actual work to associates and get a cut of each file. Marie Henein is brilliant, but she couldn’t have passed the Jian Ghomeshi file off to another lawyer.

Linda: That’s exactly right. If you can bring in enough business to allow six lawyers to bill 1,500 hours a year, you’ll make far more than if you had billed 2,000 hours yourself.

Daniel: In the next decade, are any practice areas set to take off, making it easier to drum up business?

Linda Misetich Dann and Heather Zordel

Linda Misetich Dann and Heather Zordel

Heather: It’s hard to know for certain, but I’d say wills and estates looks promising. All the baby boomers are reaching old age, so they’ll need lots of legal work.

Andrew: Hold on a second. We have to be careful about this line of thinking. Associates should not be picking a practice area based on the financial rewards it might offer.

Hilary: And yet, so many people do.

Andrew: I know. It’s crazy. A career in law is hard enough. If you work in an area that doesn’t interest you, you will not last. You’ll leave the law. And then you won’t make any money.

Hilary: This is an important point. I was careful to pick a practice area I really enjoy. If you don’t do that, chances are you’re not going to be doing it in five years.

Should you switch firms?

Daniel: For associates, when is switching firms a smart move?

Andrew: When it makes sense long term. Take my career: I’ve worked at Faskens from day one, for the past 13 years. As an associate, I got an offer from another Bay Street firm that would have come with a raise. But I said no, because I knew they’d never in their life make me a partner.

Average savings of Toronto lawyers

Bank on it Want to know how much money your colleagues have? Here are the average savings of lawyers in Toronto, broken down by age.

Daniel: How did you know?

Andrew: Because I’d talked to people I trusted and determined that I wouldn’t be able to get onto that firm’s partnership track.

Linda: Never switch firms to make a few thousand dollars more in the short term. That makes no sense. Make sure you see a path to making partner.

How not to raise a spoiled brat

Daniel: How do you teach your children about money?

Hilary: I have two kids, ages 10 and 13. I’ve talked to them about money since they were old enough to understand. And my message is simple. When they make any money — by that I mean when they receive their allowance or get money on their birthday — it goes into three buckets: money to spend, money to save for big purchases and money for charity. My daughter just had her bat mitzvah, and she gave a portion to the Red Cross’s Fort McMurray relief fund.

Daniel: What do you buy for your kids without worrying about spoiling them?

John McLeish

John McLeish

John: I don’t have children, but I do have a nephew who I’ve tried to take care of. And I will happily pay for two things. Number one is education. I covered his tuition for private school at Ridley College and for his MBA. Secondly, from time to time, I’ll pay to take him — plus his wife and baby — on vacation with my wife and me.

Andrew: I don’t have any kids, but there’s no way vacations count as spoiling — they’re a life experience.

Hilary: I love going on vacations with my kids. A couple years ago, we spent a week at a house we rented in Jamaica, and though it might have been a luxury, I never felt guilty. It also lets me spend more time with them. And if I’m not working, it’s all the better.

Heather: When I go on vacation with my daughter, though, I always work a little bit. When she sees me pop off to make calls and send emails, it reminds her: that’s what pays for all of this.

Georges: I’d add that it’s important to teach kids that the tap will eventually shut off. My parents grew up in the Depression, so they were frugal. But the one big thing they paid for was my private-school education. It came with a catch, though: after they educated me, I’d be on my own. Years later, when I wanted to buy a house, I didn’t quite have enough for a down payment. So I called up my old man and said, ‘Hey dad, I’m a little short.’ He goes, ‘Good luck, you’ll do just fine’ and hangs up the phone.

John: Good for him! When my nephew decided to buy a house, I also decided not to give him any money for it.

Daniel: Why not?

John: I honestly thought it would be spoiling him. I’ll pay for education, but I’m not gonna buy him a house or a car, or fix his roof.

Giving back

Daniel: How much should successful lawyers give to charity?

Georges: I think 10 percent of what they make.

Linda: I know we all work hard, but we’re very fortunate. Donating to charity may be tough to do early on, but it’s really important.

Daniel: Who do you donate to?

Andrew Alleyne

Andrew Alleyne

Heather: To start, if you have a client that regularly supports a certain charity, then that means you’re donating to the charity’s fundraisers and, when it has a dinner, you’re buying a table.

Georges: It’s a personal choice, but for the most part I give to educational institutions.

Daniel: Why?

Georges: Both Upper Canada College and McGill made me what I am today. I feel like I owe them. And at UCC, every student is subsidized through alumni contributions, so I’m helping other people have the same opportunity I had.

John: I love that. I know I wouldn’t be sitting at this table had I not gone to Ridley, Western and Dalhousie. I give regularly to all three. I’ve done something significant in my will for them, too.

Georges: Giving back is far more important than any of the products we could buy. Think about it: you’ll never see a U-Haul at a funeral. We can’t take all of our stuff with us.


Cover of the Fall Issue of Precedent Magazine

This story is from our Fall 2016 issue.

 

 

 


Still life photography by Vicky Lam. Roundtable photography by Ryan Walker. Shot on location at McMillan LLP

Cover Story: How to make partner at a small firm

1. Pass the lunchtime test

Making partner at McLeish Orlando LLP takes stellar legal work, rainmaking savvy and something less tangible. “I’ve got to want to have lunch with that person, only because I enjoy their company,” says John McLeish, co-founder of the 14-lawyer personal injury firm, which has seven partners. “We call it the lunchtime test.”

"We all make an effort to know each other on a personal level."— Rikin Morzaria, McLeish Orlando LLP

“We all make an effort to know each other on a personal level.”— Rikin Morzaria, McLeish Orlando LLP

And associates take the test nearly every day. “Unless I’m at a discovery or a mediation, I almost always have lunch with the rest of the firm,” says Rikin Morzaria, who made partner at McLeish Orlando in 2011, as a seventh-year lawyer. He says he chats about his personal life as often as he does about work. For Morzaria, that means providing updates on his two young children, while the hockey players on staff recount their latest on-ice triumphs. “We often have different interests outside of work,” says Morzaria. “But we all make an effort to know each other on a personal level.”

At any small firm, notes McLeish, everyone has to gel. “At a large firm, some lawyers might not even know each other’s names. But there’s no hiding at a small firm.” And McLeish says that’s a good thing: no one should want to hide. “I love all my partners and I love coming to the office. If I don’t like the lawyers, it’s not going to work for them and it’s not going to work for me.”

2. Master the small-firm formula

One afternoon in October of 2014, Jacquelyn Stevens marched nervously into a boardroom at Willms & Shier Environmental Lawyers. At the table sat the five partners of the 14-lawyer environmental boutique. Stevens, a tenth-year associate, was about to argue that she, too, should be a partner at the firm. It was the biggest moment of her career.

Being a partner is a big responsibility. We take it seriously.— Donna Shier, Willms & Shier Environmental Lawyers

Being a partner is a big responsibility. We take it seriously.— Donna Shier, Willms & Shier Environmental Lawyers

Like many small firms, Willms & Shier doesn’t have a partnership track. When associates want to take the leap, they are encouraged to make the first move and pitch themselves to the partners. If the partners like what they hear, associates become “partners-in- training” — kickstarting a trial period of at least one year, throughout which they attend all partnership meetings and see all the financial information for the first time. Only if the trial period goes well can they join the partnership, and have an equity stake in the firm. The vetting process is long. And that first meeting is no joke.

“It’s one of those times when they come in and straighten their ties,” says Donna Shier, who co-founded the firm 37 years ago. “This firm is how we support our families and our staff. Being a partner is a big responsibility. We take it seriously.”

Indeed, it’s a rare occasion when the firm’s relaxed tenor dissipates. Stevens felt the pressure. “It was pretty stressful,” she recalls. “Because I knew they might say no.”

But Stevens had prepared a detailed presentation that touted what she could bring to the business — and her pitch sheds light on what it takes to make partner at a small firm. For one thing, Stevens raised her reputation as a hyper-specialist. Most small shops, after all, brand themselves as the leading lawyers in a narrow field of law. On this point, Stevens introduced ample evidence in her favour: she was a certified specialist in environmental law and a superstar in a range of environmental areas, from mining to renewable energy.

He shook my hand, gave me a hug and said, ‘You’re in.’— Jacquelyn Stevens, Willms & Shier Environmental Lawyers

He shook my hand, gave me a hug and said, ‘You’re in.’— Jacquelyn Stevens, Willms & Shier Environmental Lawyers

She also had a strong reputation in the dry-cleaning law world, where she’s a go-to lawyer for both industrial cleaners and property owners who have sued such cleaners for damaging their land. At the office, colleagues called her “the dry-cleaning queen.”

Next, Stevens had to prove she could bring in new clients, a touchstone for partnership at all firms. But rainmaking at small firms is a unique challenge. “Most small firms don’t have institutional clients that feed it all of its work,” says Stevens. “Most of my work comes from one-off clients.” Business development, in other words, is a constant grind. Which is why Stevens keeps in touch with potential clients year-round. For instance, she reaches out to them and says, “I hope you don’t have any problems, but if you do, remember to give me a call.” And, as she told the partners, that tactic has borne fruit. “It’s taken six years, but I finally feel like I’ve gained the trust of certain clients, and I’m getting files.”

At the end of her presentation, Stevens ambled back to her office, leaving the partners to confer. Five minutes passed. She heard a knock at the door. “It was the managing partner, Marc McAree,” she recalls. “He shook my hand, gave me a hug and said, ‘You’re in.’”

Stevens went on to spend all of 2015 as a partner-in-training. Then, this January, she broke out of that cocoon, and emerged as a full-fledged equity partner. “It’s a big responsibility,” she says. “But you know what? I’m ready for this.”


This story is part of our series on making partner, from our Spring 2016 issue.

McLeish Orlando accepts the Ice Bucket Challenge in an inflatable pool

After receiving a nomination to take part in the now-pervasive ALS Ice Bucket Challenge from fellow personal injury law firm, Oatley Vigmond LLP, the partners of McLeish Orlando LLP answered the call.

Kneeling in small, inflatable pool in the middle of the firm’s reception area, John McLeish, flanked by partners Dale Orlando and Patrick Brown, endured a cascade of icy water for a good cause — and a good video. And, always professional, they remained in their suits. (That said, John McLeish brought his rubber ducky along for moral support.)

“We’re kids at heart. So if it gives everybody a good laugh, we love it. Especially if it’s for a good cause,” says Brown. “My daughters have also done it and sent it to their friends on Instagram. So the fact that I get to send the video to my daughters is fantastic for me on a personal level.”

The firm also donated $1,000 to the ALS Foundation.

Here, watch the full video.

And check out the original challenge by James Vigmond.