On occasion, I receive an email or a phone call from a new attorney asking me about estate planning as a career. I think it is a wonderful focus for a practice – you can really make a positive impact on a family, you are helping others face issues they otherwise would avoid, and your compatriots in the field are for the most part generous, caring and willing to help.
Unfortunately, there are also plenty of roadblocks that can be quite difficult to overcome. Let’s take a look at some of the toughest ones:
As much as you might want to fight the concept, both your age and the potential client’s age is going to be a factor in attracting business.
The majority of people who are even interested in estate planning will be in their 50s, 60s and older, and most in this age group are more attracted to attorneys with the sophistication and competence that comes from years of experience. To put it another way, ask yourself how often a 60 year old will listen to and follow the instructions of someone less than half their age.
On the other hand, those in their 20s, 30s and 40s do not have death in the forefront of their minds. Instead, most in this age group have at least one parent who is still alive, and many have school-aged children as well. If you add in the desires of building a career and a life, and the belief that death will not likely occur for decades, spending time and money on estate planning does not have much appeal or urgency for this age group.
Belief That Estate Planning is “Easy” or Unneeded
Some common perceptions about estate planning include “anyone can prepare a will” or “I don’t have an estate, so why would I need an estate plan?”
While anyone really could prepare a will, this concept is greatly misinterpreted as an instruction that estate planning is so easy that anyone can do it. As a result, many folks looking for a quick and inexpensive solution choose software, forms at their local office supply store, or an online document preparation company, and may remain oblivious to their inherent risks.
The notion that “I don’t have an estate” is another common misconception based around a mistaken understanding of the term “estate”. Those with limited assets, as well as those with jointly held assets or life insurance policies, are apt to believe that no special planning is needed.
Salesmanship vs. Ethics
The days of big firms carrying the hard-working, introverted bookworms are disappearing in favor of those who can or have the potential to bring in a significant book of business. Many lawyers hate sales, but just about all lawyers need to develop these skills. Law schools rarely provide any guidance in this area — in fact, the ethics rules seemingly views this type of persuasion negatively.
Over time, this dichotomy has had great impact on the estate planning profession. For instance, why do significantly more people have life insurance coverage than any estate planning documents? Is life insurance truly more essential for families? As compared to life insurance salespeople, do lawyers’ arguably more limited sales skills have any effect?
A little over a decade ago, each individual’s estate owed an estate tax on assets exceeding $600,000. For 2011 and 2012, no individual’s estate will owe any federal estate tax on their first $5 million of assets. Less than one-half of 1% of American families even have that level of wealth, leading some commentators to opine that estate planning is “dead”.
While that may be overstating the point, it is certainly true that fewer people have to focus their planning around estate tax avoidance strategies that were more necessary in the 1990s.
The gap between what the public seems to be willing to pay for estate planning services and what lawyers think the service is worth has been around for years now. The estate planning lawyer is basically left with three main choices.
First, the attorney could focus their practice on the wealthiest clients and charge top dollar for each case. However, as stated above, the “market” for those who need the most sophisticated estate planning is quite limited. Would such families be more likely to pick a newer estate planning attorney or will they tend towards one of the thousands who are more established?
Second, some lawyers opt to charge small amounts for an estate plan and must thereby run a volume business to profit. Unfortunately, these lawyers are forced to create regimented procedures to minimize the time spent on each case and limit their ability to provide any extensive personal service.
Finally, the lawyer might choose to expand their practice into other areas of the law or seek “greener pastures”. A newer lawyer seeking to fill this increasing gap in estate planning knowledge and skill again must not forget basic economics — prices may need to come down before an increase in demand results.
Is it impossible for the newer attorney to succeed in estate planning? Probably not. Instead, the above is provided to show you some of the issues you will likely encounter when practicing in this area of the law. Hopefully, someday you will be able to share how you overcame them.
- Adding Value to Your Estate Planning Practice (lawprofessors.typepad.com)
- A Change is Gonna Come (willsandwealth.wordpress.com)
- Do-It-Yourself Estate Planning is Dangerous (epilawg.com)