Financial wellbeing is a legal ethics and risk issue

We were pleased to collaborate with LawCare to write this article for their newsletter, which was first published on 3 September 2025 and is reprinted below.

It needs action, not just awareness.

In this edition, Carla Hoppe, founder of Wealthbrite, writes about why financial wellbeing in law is more than just a personal issue - it’s a matter of ethics, risk and professional integrity. Carla explores how money stress affects decision-making, why firms can’t afford to ignore it, and what practical steps leaders can take to protect both their people and their business.

In law, professional integrity is core to public trust. We talk a lot about regulation and compliance. We update policies, publish values and sign off on responsible business plans.

But a major risk is ignored and uninsured: the personal financial stress of our people.

Without a strategy to build competency, firms should treat personal finance as a live risk.

The risk is hiding in plain sight

Lawyers at all levels report money worries, no budgeting, minimal savings, and mental health symptoms affecting them at work.

When people are under pressure, poor decisions can follow. That might mean errors, reluctance to escalate, misuse of expenses or inflated time entries.

Put simply: poor personal financial management is a firm-level risk.

Policies alone aren’t protection

The SRA expects more than a document. Firms must show real systems and a culture that supports ethical decision-making.

Solicitors also have a duty to maintain competence. Not just in our specialisms, but in how we meet our ethical responsibilities.

We’ve spoken to risk leaders in a series of Chatham House discussions and it's clear that personal financial management is a real issue for firms, regardless of size and location.

Legal ethics training is limited and none we are aware of speaks to modern day financial risks (such as social media scams, financial blackmail, or lenders of last resort) that can make a person vulnerable to misconduct.

Regulators are starting to shift their stance. The Government’s new ‘failure to prevent fraud’ offence under the Economic Crime and Corporate Transparency Act 2023 means organisations must show reasonable procedures to prevent wrongdoing by associated persons; which includes their own people.

Add the Legal Services Board’s focus on enforcing regulatory responsibility, elitist and exclusionary environments and the message is clear: culture and capability count.

This risk costs more than you think

Our sector data shows that the legal profession is under-performing against national benchmarks on use of credit and emergency savings, despite earning above national average wages.

Perceptions of wealth mean a majority of lawyers feel pressure to spend beyond their means. A culture of expertise holds people back from speaking up or asking for help.

Add the stress of the day job where personal wellbeing often falls to the bottom of the to-do pile and you have a recipe for financial disasters to spill over.

As one sector leader put it: there is a toxic money culture in law.

The Solicitors’ Charity reported a 60% rise in people seeking help for financial issues in the last year alone. Many were under 40 and came with problem debt they could no longer service.

Firms are already bearing the cost of poor financial management but few are tracking it or have systems in place to prevent repeat occurrences. Here are a few of the examples shared with us:

• The junior lawyer on sick leave, whose reduced sick pay doesn’t cover rent and essentials. They face a choice: return too soon and risk relapse, or stay off and fall into debt. Either way, performance and wellbeing suffer.

• The associate with no insurance, savings or access to credit, whose home was flooded. The firm helped but no one tracked the time incurred or cost spent.

• The lawyer who inflated time entries, later linked to debt and pressure to hit billable hours targets to secure their bonus. Caught only because the client queried the bill.

Desperation and financial naivety pose firm-wide risks. And they’re costing more than we admit.

Cases that do reach SRA investigation are just the tip of the iceberg. As one leader who has represented firms said - there are very few truly bad apples. The vast majority of people simply find themselves in situations escalating out of control and don’t pull the emergency help cord at the right point in time.

Culture is the cure

This autumn, many new lawyers will receive their first pay packet. For some NQs they are jettisoned into the top 3% of UK earners. But most don’t know how to read a payslip, how taxes on income work, how to manage a budget, deal with credit or plan for their future.

We often hear: “everyone’s expected to know” or “everyone’s in competition”. The result is silence. This silence increases vulnerability to poor choices that can have catastrophic consequences; as we heard in our discussions, including criminal actions and even suicide.

Normalising questions about money, and providing timely, relatable support, helps. It reduces isolation and builds a culture where people are more likely to escalate uncertainty and less likely to hide mistakes.

Too many lawyers are unaware of the support offered by LawCare. We owe it to the longevity of our profession to do a better job of promoting the help that already exists. If for no other reason than as a zero-cost hedge against the risk of your firm being caught up in the next article or SRA investigation.

Treat it like any other firm level risk

Awareness isn’t enough. Action is. A simple, defensible approach looks like this.:

1. Assess the risk

Use a two-pronged approach:

• Review cases to turn stories into data: salary advances, gambling issues, hardship fund use. What were the firm’s direct and indirect costs?

• Build a data-first approach to the risk: run a confidential financial health survey to map pressure points and risk areas in knowledge, career level and roles.

2. Manage the risk

Use your findings to create clear procedures and support routes. Train managers to spot red flags and provide resources they can signpost effectively.

Offer targeted financial training tailored to different career stages and don’t assume knowledge. Include financial management in compliance training to link it to ethical standards.

3. Monitor

Track changes in attitudes and behaviours. Reassess your data annually to show the impact of early intervention and the ROI of financial education.

A final thought

We don’t need more evidence to act. We already have it. High money stress and low financial confidence are common, especially early in legal careers. That’s a risk and an ethics issue.

Over the coming months Wealthbrite will run its third annual Financial Wellbeing in Law survey. We will once again spotlight problems, benchmark progress and call for action and focused effort where it counts.

In the meantime, we urge firms to act.

Getting personal finance risk right isn’t just good for your people. It protects your business and your professional reputation.

‍All data cited comes from the Wealthbrite 2024 Financial Wellbeing in Law Survey, comparison sources from the Money and Pension Service and Office For National Statistics.

Wealthbrite is pleased to be a LawCare 25 Club Member advocating for better support for the mental health and wellbeing of people working in the legal sector and raising awareness of the link between money and mental health.

By Carla Hoppe, founder of Wealthbrite.

Published via Law Care on 3rd September 2025.