Lawtrades Podcast

In this event we cover:

• Managing Your Money
• Understanding Risk Vs. Reward
• Choosing Investments

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Managing Your Money‍

To manage your money effectively, focus on both cash flow (money coming in and going out) and net worth (assets minus liabilities).

• Prioritize paying off high-interest debt before investing or saving.
• Consider automating savings contributions to make it easier to save consistently.

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Understanding Risk vs Reward

• 6:11 Investing involves balancing risk and reward. Generally speaking, higher-risk investments offer higher potential rewards but also come with higher potential losses.
• Diversification is key to managing risk in your investment portfolio. Spread your investments across different asset classes and industries.

Choosing Investments

• When choosing investments, consider factors such as fees, historical performance, and the overall market environment. Index funds are a popular choice for many investors because they offer broad exposure to the market at a low cost.

Importance of Tracking Expenses

Why Track Expenses?

• Tracking expenses is important to understand spending behavior.
• Getting 12 months of data is necessary to account for seasonality and smooth out spending habits.
• Use tools like Tiller Money, Mint, or Rocket Money to plug in accounts and get real data.

Compensation Structure‍

• 18:16 Partners in law firms receive a base salary for three years before their total compensation is increased to seven or eight figures. Partners are responsible for making estimated tax payments directly to the government instead of having withholding come out of their paycheck. This can lead to cash flow issues and confusion about promised compensation.

Challenges of Partnership

• The transition to partnership can be challenging due to the sudden increase in responsibility and financial obligations. It may take several years before things normalize, leading to frustration among new partners. Many professionals, including lawyers, lack financial education and rely on working hard and throwing money at problems rather than managing finances effectively.

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On this episode of Not Billable, we sat down and chatted with James Walker, Associate Counsel and Investments at Draper Associates (an investor of Lawtrades), a venture capital firm run founded and managed by Tim Draper.

James shares his experience getting his MBA/JD through the J-Term program at Columbia University and what it was like to pivot from Big Law at Latham & Watkins into a hybrid business legal role at Draper Associates.

Working at Latham & Watkins

James started his career as an associate attorney at Big Law firm, Latham & Watkins

Latham & Watkins is institution in the legal industry and a well known player in the emerging companies space.

While in this role, James gained valuable experience and skills that he still uses today.

The J-Term Program at Columbia University

After more than 2 years in Big Law, James decided to pivot and get his MBA.

James ended up applying to the impressive J-Term MBA program at Columbia University, which would give him the ability to earn his graduate degree in just 18 months (instead of 2 years).

Unfortunately, when James was set to graduate in 2020, COVID-19 hit the United States.

James needed to pivot fast.

Draper Associates

James ended up reaching out to Tim Draper to see if any of his portfolio companies needed legal counsel.

Instead of referring James out, Tim decided to bring him on to help save on legal expenses.

Eventually that role evolved into much more of a hybrid of business and legal.

James is now more of a 1/2 internal counsel, 1/2 strategic business advisor.

Closing Thoughts

Big law firms can offer many opportunities and experiences, but it’s not the only path a lawyer can take.

In-house legal is a dual-hat wearing role (law and business).

By regularly evaluating your skills and interests and seeking out opportunities to grow and develop, you can determine where you are most useful in your legal role.