3 Things Every New Lateral Partner Should Do in the First 90 Days

The career move is over. Now it's time to make sure your finances catch up.

You've accepted the offer, announced the move, updated your LinkedIn profile, and survived the flood of congratulatory texts and emails.

For most attorneys, that's where the focus has been for months. Landing the right opportunity, maintaining client relationships throughout the transition, and getting up to speed at a new firm can feel like a full-time job on top of your full-time job.

What often gets pushed to the side are the financial decisions that come with the move.

And that's understandable.

The first few months at a new firm are busy. You're learning new systems, meeting new colleagues, and focused on making a strong impression. But some of the most important financial decisions of your career happen during this transition period, often before you've had the chance to take a step back and evaluate them.

Here are three areas worth reviewing before they become an afterthought.

1. Understand What Your New Compensation Really Looks Like

This is the one that catches lateral partners off guard the most, because every firm's compensation structure is different, and the offer letter rarely spells out the practical, month-to-month reality.

• Some firms pay you as a W-2 employee, with taxes withheld and a predictable paycheck
• Others pay on a K-1 draw. Depending on the arrangement, taxes may not be withheld, and estimated tax payments or other tax-planning considerations may apply.
• Some firms allow you to get paid to a PC (professional corporation). A PC lets your own corporation, rather than you personally, hold the partnership interest, which can lead to major tax savings and keeps your profit sharing separate from your personal income*. (The availability and legal, tax, administrative, and financial effects of such an arrangement depend on applicable law, firm policy, the terms of the partnership agreement, and individual circumstances.)
• Some comp structures are distribution-heavy, with large chunks of income arriving in irregular lump sums late in the year
• Others are structured to push more income toward deferred or tax-advantaged vehicles, which changes your current cash flow but helps your long-term tax picture

The point isn't that one structure is better than another. It's that you need to know which one you're walking into before your first paycheck (or lack of one) surprises you. A comp structure that worked fine at your old firm can create a completely different cash flow reality at the new one.

Consult qualified tax and legal professionals regarding the structure and consequences of your particular compensation arrangement.

2. Treat Your Benefits Package Like Part of Your Compensation

New partnership agreements come with a stack of benefit programs that look similar on paper but often work very differently in practice, and most partners don't read the fine print until they need it.

• Cash balance Plan / Profit Sharing: Contribution levels, vesting, and how conservatively (or aggressively) it's invested
• 401(k): Investment Options, Custodian, and whether a Roth or mega backdoor option exists
• Health Insurance: Cost, plan options, deductibles, and how coverage compares to what you had
• Life and Disability Insurance: How much is provided automatically versus what you need to supplement on your own

These aren't "set it and forget it" line items. They're the building blocks of your new compensation package and understanding them early means you can intentionally plan around them instead of discovering the gaps later.

Benefit availability, costs, terms, tax treatment, and suitability vary by employer, plan, and participant. The applicable plan documents and insurance contracts govern.

3. Review Your Options for Former Employer Retirement Accounts

When you leave your old firm, your old 401(k) and cash balance plan don't disappear, they just sit there. And "sitting there" is usually the problem.  

• Cash balance plans are defined benefit arrangements. Their benefit formulas, interest-crediting provisions, investments, guarantees, vesting schedules, and distribution options vary by plan. An interest-crediting rate, if applicable, is not necessarily the same as the investment return earned by the plan’s underlying assets.
• A participant’s age or time until retirement is only one factor that may be relevant when evaluating available options. Other considerations may include financial circumstances, objectives, risk tolerance, account guarantees, fees, tax treatment, distribution provisions, and the features and protections of each available account.
• Former employer plans differ in their investment options, fees and expenses, services, distribution rights, withdrawal provisions, and fiduciary oversight. Review the plan’s current disclosures and governing documents rather than assuming that a former plan is more or less advantageous than another available option.

After leaving an employer, available retirement-account options may include:

• Keeping assets in the former employer’s plan, if permitted
• Moving assets to a new employer’s plan, if that plan accepts rollovers
• Rolling eligible assets to an IRA
• Taking a distribution, which may be taxable and may be subject to additional taxes or penalties

A New Firm Deserves a Fresh Financial Strategy

One of the most common things we see is attorneys making a major career move while leaving their financial strategy largely unchanged. But a new firm often means new compensation, new benefits, new tax considerations, and new opportunities.

The reality is that your career may have changed faster than your financial plan. Taking a few hours during your first 90 days to review the details can help ensure that the opportunity you've worked so hard to create translates into long-term financial success as well.

Because moving firms is a career decision.

Making the most of that move is a financial one.

*Source: https://redmondaccounting.com/2026/07/20/hidden-tax-advantages-attorneys/ 
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IMPORTANT DISCLOSURES:

For informational and educational purposes only. The information presented is general in nature and is not intended as a recommendation or individualized investment, tax, or legal advice. Strategies discussed may not be suitable for all investors, and results will vary based on individual circumstances.

Not every option is available in every situation. Before rolling assets from an employer-sponsored retirement plan to an IRA, consider differences in fees and expenses, available investment options, services, withdrawal provisions, loan features, required minimum distribution treatment, tax consequences, and creditor protections. Keeping assets in the employer plan may be appropriate in some situations.

An IRA rollover is not appropriate for every investor and does not assure improved performance, lower costs, or better results. The appropriate choice depends on the individual’s circumstances and the specific features of each available option.

Investing involves risk, including the possible loss of principal. More aggressive investment strategies generally involve greater volatility and may not be appropriate for every investor. No investment strategy can guarantee a profit or protect against loss.