While PwC’s Annual Law Firms’ Survey 2024 stated that 81% of Top 100 firms reported profit increases compared to 56% last year. The 2024 edition of The Financial Wellbeing in Law Review highlights a worrying trend among the people behind the firms’ success. Financial stress is severely impacting lawyers’ wellbeing. 89% of newly qualified (NQ) to two years post-qualification experience (2PQE) lawyers worry about money almost every day, and 48% of lawyers across all levels regularly use credit cards because they’ve run out of money by the end of the month.

The report* draws on insights from over 500 lawyers across the UK on the impact of financial literacy on social mobility, mental health and business success.

Financial wellbeing and social mobility

According to PwC, 85% of firms reported monitoring social mobility within their workforce. However, The Financial Wellbeing in Law Review finds that while law firms are helping people enter the workforce, they’re not giving them the tools they need to thrive in it.

Carla Hoppe, Founder and CEO of Wealthbrite, says “The defining factor in social mobility is your lived experience with money. While some law firms are now moving to provide support with the cost of travel and accommodation support or a stipend for interview clothing this doesn’t solve the wider problem a lack of financial literacy creates in the workplace. Immediate direct interventions are valuable, but how are law firms supporting people once they’re in roles to succeed when there’s a lack of understanding around how to manage  money day to day and plan for their futures?”

• 72% of junior lawyers say they don’t know how to budget.
• 48% of lawyers at all levels turn to credit cards because they’ve run out of money at the end of the month.
• 36% of lawyers could not afford an unexpected expense of £850 without relying on borrowing or credit. This increases to 42% of junior lawyers.

Financial wellbeing and mental health

The report finds that financial pressures are causing depression, anxiety, sleepless nights, and a lack of motivation, creating a workforce that is both stressed and underperforming.

• 72% of all lawyers report at least one sign of poor mental health in relation to their finances that could affect their ability to function at work.
• 82% of all junior lawyers worry about money almost every day.
• 60% of lawyers feel pressure to spend beyond their means.

Caroline Turner-Inskip, Global Head of Wellbeing at Simmons & Simmons, states, “Financial wellbeing is a still overlooked but critical component of mental health. In a high-pressure profession like law, financial stress can exacerbate anxiety and burnout yet it’s still not widely addressed as part of a holistic wellbeing strategy. It’s not enough for firms to offer surface-level solutions like mindfulness programmes or wellness perks if they’re not tackling the root cause of stress including financial insecurity.” 

Financial wellbeing and business success

Carla Hoppe emphasises the growing importance of financial literacy within the legal profession: “Financial wellbeing isn’t just about doing the right thing – it’s about survival and success in a hyper-competitive market. Stressed, financially insecure lawyers are less productive and more likely to leave. That’s a risk no firm should be willing to take.”

• 61% of UK lawyers struggle with financial confidence.
• 34% of lawyers admit their performance is directly affected by money worries.
• Gallup analysis shows that engaged employees require a 31% pay increase to consider leaving for a new role, compared to just 22% for disengaged employees.

With turnover rates in law firms already high and the majority of NQ (newly qualified) lawyers frequently worrying about money, the report projects that financial stress will exacerbate attrition rates over the next five years. Law firms risk losing valuable talent not just to competitors but to entirely different sectors that prioritise financial education and wellbeing.

A call to action for law firm leaders

The report calls for leadership in the legal sector to prioritise financial literacy as part of their broader talent retention and mental health strategies. It’s time for firms to move beyond outdated communication methods, such as emails, and engage staff through interactive and engaging learning experiences.

• Interactive learning – designed to make lessons memorable and impactful.
• Digital experiences – workshops, simulations, and digital learning platforms.
• Peer-to-peer learning – enabling intergenerational learning around the topic of money.

Wealthbrite’s founder, Carla Hoppe, summarises: “The legal profession is at a crossroads. To build resilient, high-performing teams, firms must invest in financial literacy and create a financially confident workforce that drives results.”

*Produced by Wealthbrite