Make Sure Your Hard Work Benefits Your Clients Long-Term
Yesterday my partner, Jay Fisher, introduced the first of a four-part blog with tips on how to become a better lawyer. Making a lasting difference in the lives of our clients isn’t just about winning the case, because statistics show the vast majority of plaintiffs who receive a lump sum will blow it all within the first year. To make a true difference, we have to take a few extra steps, and have a few extra conversations with our clients.
The second four ways we think you can become a better lawyer with respect to providing your clients long term stability are:
- Make sure they understand the benefits of paying down debt. It may not feel as good as driving a new car, but it’s the only thing that will ensure solvency and success in the long run. If you have a client who has debt issues, taking the time to explain the benefits of tackling debt which has the potential to cause long-term financial struggles is of great service.
- Make sure the money is going to last as long as it needs to. Take into account your client’s age, number of dependents (if any), and his/her financial needs when you resolve his/her case. If, based upon what you know, they may need to buy structures or annuities, or would benefit from financial or investing advice, then take the time to point them towards potential professionals or advisors who can help. We as lawyers meet such trusted professionals through our services, but, individual clients may not have any such contacts. Thus, helping them find their way can have huge benefits to your clients as they seek long-term financial stability.
- Make sure your clients appreciate the realities of buying that “big house”. More specifically, advise them not to secure a mortgage that exceeds 25% of their income. If it exceeds this, it is generally recognized that it may have the impact of robbing other budget areas and potentially lead to financial disaster. Remind them that the mortgage is only part of the equation, and to consider the expenses that come along with a big house.
- Make sure you are aware that structured settlements can be undone. A structure or annuity is a great tool, but history has shown us that our clients can and will sell them if their overall settlement plan is inflexible as things change over time. Because this often happens at a great loss, we must help our clients look to options that have the flexibility to allow them to adapt financially over time as situations may change. My advice to you is to consider structured settlements, and, if they make sense, then consider using both recurring and lump sum payments over time that provide for the unexpected. By doing this, you are helping to minimize the likelihood that your clients may consider approaching a high-discount rate factoring company to sell their structured settlement for “cash now”. Also, explain to your clients that if they ever do run into trouble, they should call you or their structured settlement professional for help, as you can help them find the right solution while protecting them from predatory factoring companies.
Hank Didier is co-founder of Vantage Capital Consultants, a purchaser of structured settlements and annuities.