How do lawyers invest their money?

[Ramesses]

For lawyers at firms with lots of clients, it would not make sense for them to check the client list before every trade or to ask the review committee to approve every trade they want to make.

So how do they invest their money?

[Jaggers]

Index funds?

[Talleyrandophile]

Simple, just buy crappy penny stocks of companies that your firm would never touch as clients.

[KOMODO]

Not only do you need to check the list when you buy, but also when you sell. As a result, if you buy a specific company stock and the firm does not act for that company at that time, it might be fine, but then by the time you want to sell the firm does act, and then you could have a problem and be stuck with something you can't offload. As a result, none of my friends at big firms trade individual stocks.

As Jaggers suggests, instead, we use ETFs - many of us use robo advisors like WealthSimple that pick for us, or buy into general portfolio funds like the ones the Vanguard, iShares, etc. offer through places like Questrade (none of these specific examples / names are endorsements, they're simply meant as general examples of the types of things some people buy after doing their own independent research and review). If you're not sure what's right for you, consult a fee-for-service financial advisor who can review options with you.

[Jaggers]

Being a lawyer with potential access to material non-public financial information is not really compatible with trading in individual stocks. Maybe if you build a portfolio of a smallish number of permitted blue-chips that you intend to buy and hold long term, but not much other than that.

Edited April 20, 2022 by Jaggers

[Spreckles]

Who remembers that Mccarthys m&a lawyer that was caught insider trading?

Edited April 22, 2022 by Spreckles

[t3ctonics]

I recall my old firm required us to disclose any individual stocks we owned, but it was made clear to us that we bore the responsibility to avoid conflicts or insider trading. No concern with ETFs or mutual funds though. Some of the partners were also investors in local businesses.

Two lawyers I know started businesses themselves (both microbreweries). One quit law to focus on the brewery, while the other still practices. I know another that owns a fast food franchise, but he owned it before even going to law school.