Monday, November 21, 2011

Go Back to Work?

I don't understand these people who want the Occupy crowds to stop protesting and go back to work.

Do they seriously believe that many of those people are camped out day after day because they have jobs or even a home to go to?  Or is the media inventing the 9% or higher unemployment statistics?

It's funny that the naysayers want to blame Obama for the continued high unemployment, but they also want to believe that the protesters are just a bunch of spoiled hippies who just happened to wander by the park on the way to buy some ganja from their supplier and decided to hold an impromptu party.

In fact, I find it particularly interesting that many of the initial hoards of unemployed after the financial meltdown no longer have unemployment benefits.

Finally, let me close by saying that we in America are trying to sell the concept of American-style democracy to the rest of the world--especially the Middle East.  What example do we set when our cops randomly pepper spray people who are peaceably protesting?

They look at that and see that our way doesn't give them the freedoms that they desire.

Saturday, November 12, 2011

Where Do Your Lottery Riches Go?

The other day, I overheard some people hating on a young attorney for being "cheap" because he doesn't go crazy with spending.  After all, this young attorney made so much money that he should be living like a king! 

I'll pause here to let the chuckling die down.

After all, those of us "in the know" know that we don't get to keep all of those glorious riches.  Haters usually don't take into account that attorneys not only have bills, but they have unique expenses.

I thought about it for a while, and decided that this is as good a time (as any) to discuss what happens to your money as a young attorney.  For sake of argument, let's say that young attorney makes $50,000 a year.

The federal government takes a bigger cut.

Now, I know that people made fun of that law professor not long ago for not having enough left over to pay for undocumented workers to be paid in peanuts to cut his lawn if the Bush tax cuts went away.  However, nobody really pays attention to what happens on a smaller scale for people who aren't making anywhere near that amount.  If the attorney has taxable income of $50,000 per year, they pay a 25% tax rate on every dollar they make over $34,500.  In contrast, people who have a taxable income between $8,500 and $34,500 pay a 15% tax rate on every dollar they make over $8,500.  Not that I'm necessarily complaining about paying taxes since I like having services, but it is a fact that an additional 10% above $34,500 goes away. 

Self Employment Taxes

For those not lucky enough to find work in a firm (or those unlucky to work in scummy firms who won't withhold your income tax), you get the privilege of paying self employment tax.  This amount is double what an employed person earns.  Of course, the upside is that it is that it is much easier to deduct expenses such as bar dues that would not otherwise count if you don't have enough to itemize. 

Student Loan Debt

I don't know what it is, but people think that schools hand out law degrees for free.   They think that if you pay $12,000 a year in student loan payments that you still get to keep that $12,000.

Ah, but don't they offer income based repayment?

Why sure!  In that scenario, you can exchange living off of ramen noodles for 10 years to get rid of them for paying a "manageable" amount for the next 25+ years that you could have bought a house with the additional interest that you paid.

Donations to Campaigns

If you live in an area where the judges are not appointed, you are expected to donate money to election campaigns.  Through donations and a combination of schmoozing at social events, the attorney helps, er, put their clients interests in a good light.  Yeah, that's it....

Social Events

At the end of your workday, you don't simply go home a lot of the time.  No. Marketing yourself is a 24 hour a day task.  Whether you belong to the Junior League or the Masons, your lunches and evenings are spent at meetings.

And people don't simply expect you to show up to a meeting, nod your head in agreement, and go home.  No, that is for losers.  If you were very smart, you would put yourself in charge of a committee that spends months organizing a big event.  That way, it makes you look like a responsible individual to people who don't know you that well.

If that wasn't enough, you are also supposed to attend silent auctions and charity events.  Again, your attendance is not good enough.  If they are selling a basket of bath soaps, you are supposed to bid on them and preferably win.

The Trick or Treat Syndrome

Do you remember how people round up their kids and drive them over to the "rich" neighborhoods to go trick or treating because they give out all of the "good" candy?  One lady I know said that one year, she had over 500 trick or treaters come to their door because she lived in the "good" neighborhood.

When Christmas rolls around, you can't afford to cheap out with either your bosses or underlings and giving presents.  A good present to your boss shows that you are thankful to have a job.  A good present to your support staff is expected as a thank you for putting up with your bullshit all year.  Also, donuts and fruit baskets to the court's support staff also helps because you're going to screw up and you're going to need them to remember you as the individual who brought them donuts last week in helping you fix the error so that you won't be sued by your client for malpractice. 

This also extends outside of the office.  People two floors down from your office somehow magically make their way in the door and expect you to buy candy bars for their kid's PTA, pledge for their walk to combat breast cancer, and buy candles, wrapping paper, and tickets for cook offs. Sure, you can use the excuse that you don't have any money or you are on a diet, but you don't know if you're burning the bridge with a potential client, do you?

This leads me too...

Keeping up Appearances

At one time, I used to laugh at the idea that a nice car and clothes were legitimate business expenses, but what do people think of attorneys that show up to court in a beater?  They certainly don't think that the attorney is simply being reasonable and trying to keep the student loan people from harassing them.

Trust me, I've tried that conversation with people.  They don't want to hear it.  If you don't have the goodies, that is a red flag that there is something wrong with you.

I don't know if any of you have ever read the book The Blind Assassin by Margaret Atwood, but there is a scene at a country club where the older lady is teaching the younger lady how she should act now that she had substantial money.

The older lady told her, "Don't talk loudly at the waiters.  Make the waiters lean in to listen to you.  They expect it."

Yes, its incredibly bitchy to treat the staff like that, but that exchange has a specific point that is echoed when some of the non-attorneys make merriment of your economic misfortune.

I will give this example:

My grandmother and grandpa lived in a house that was in such bad condition that you could hear rats in the attic at night.  Eventually, she went to work in real estate to earn some extra income.

My grandma bought a Lincoln, wore diamonds, and bought clothes from the nice boutiques.  Not only that, she did not screw over clients.  She had a 30+ year career in real estate that survived the busts.

In contrast, the realtor that my parents used a few years ago drove a beater (that could stand to be cleaned) and always acted like he would rather be somewhere else.  In fact, he once said that he had a nicer car, but used the junker for work because it was cheaper for liability purposes.  For a couple of years after my parents bought their property, the realtor used to mail circulars to them to keep him in mind.  After the real estate bust, the circulars mysteriously went away.  I assume the guy is flipping burgers somewhere.

Not that my grandmother and grandfather ever moved out of the neighborhood, mind you.  It ended up being an assurance that she still had a job.

Moral of the story:  In a people business you can't afford to cheap out in the eyes of your clients.  On one hand, people are annoyed that you are driving around in a Hummer while you ran off with their last dime.  On the other hand, they want to hire the attorney who drives the Hummer because it means that this attorney is legitimate and can get their clients results.

So, yeah, the truth is that the nature of the business doesn't allow you to simply get 10 years of use out of your beat up old Civic even if you were perfectly happy with your old car.