By Joel Chouinard, CFP®
August 28th, 2025
If you're making Big Law money but still not sure where your cash should go, you're not alone. Most attorneys I talk to have money sitting in checking accounts earning nothing—which means they’re working harder than they need to in order to reach their goals.
That’s why today we’re covering the 5 accounts every Big Law attorney must have. These aren’t just “nice to haves”—they’re the foundation for building real wealth and giving yourself options in the future.
1. High-Yield Savings Account: Your Financial Swiss Army Knife
Think of your High-Yield Savings Account (HYSA) as the Swiss Army Knife for your finances—versatile, reliable, and ready when you need it.
Two main uses:
1. Emergency Fund
Everyone needs one, but the size depends on your situation.
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- For example, if you’re a single Big Law associate, three months’ worth of essential expenses might be enough. You’re very employable, and you likely have no one else relying on your income, so you can get away with a smaller emergency fund.
- If you’re a partner with income tied to firm performance, you may want closer to six to nine months’ worth of essential expenses. This ensures you can continue to pay your bills even if the firm experiences a dip in profitability for a prolonged period of time.
The key is that this money needs to be safe (i.e., not invested). That’s where the HYSA comes in. It’s FDIC-insured and pays much more interest than a checking account.
2. Short-Term Goals
Saving for a down payment, a remodel, or even a transition fund if you’re planning to leave Big Law? A HYSA is perfect for goals within the next two years. Beyond that timeframe, investing in a diversified ETF portfolio may give you better long-term growth.
Bottom line: Any cash you don’t need immediately—but also can’t afford to risk—belongs in a High-Yield Savings Account.
2. 401(k): Don’t Leave Free Money on the Table
If you're making Big Law money and not using your 401(k), you’re essentially handing the IRS thousands of dollars every year.
And while most Big Law firms don’t offer a match, that doesn’t make the 401(k) less valuable. In fact, it’s one of the most powerful tools you have for building long-term wealth and cutting your tax bill.
Which 401(k) Option Should I Use If I’m a Big Law Attorney?
You typically get two contribution choices: pre-tax or Roth.
- Pre-Tax 401(k): Contributions reduce your taxable income today. If you earn $300K and put in $20K, you’re only taxed on $280K, so you’re saving on taxes. However, when you start taking money out in retirement, withdrawals will be taxed as ordinary income at whatever tax bracket you’re in at that time.
- Roth 401(k): Contributions are made with after-tax dollars, so no tax savings today. But when you start taking money out in retirement (after age 59 ½), withdrawals will be tax-free.
Rule of thumb:
- Higher tax bracket today than you will be in retirement → Lean pre-tax.
- Lower tax bracket today than you will be in retirement → Lean Roth.
- Not sure? Split contributions between both.
Regardless of which you choose, don’t ignore your 401(k) just because there’s no match—it’s one of the best long-term wealth builders available to you.
3. Roth IRA: Yes, You Can Still Have One
Many attorneys tell me, “Joel, I wish I could contribute to a Roth IRA, but I make too much.”
They’re right—direct contributions to a Roth IRA phase out at $165,000 (single) and $246,000 (married filing jointly) of Adjusted Gross Income (AGI) in 2025. But here’s the kicker: not having Roth money in your portfolio could cost you six figures of tax-free growth over time.
Example:
If you save $7,000 annually in a Roth IRA for 30 years at 8% growth, you’ll end up with about $850K—all tax-free. In a taxable account, you’d lose over $100K to taxes.
So how do high-income Big Law attorneys get Roth money? Through the Backdoor Roth IRA:
- Contribute after-tax dollars to a Traditional IRA (no income limits).
- Convert that balance to a Roth IRA.
- Invest the funds.
The strategy is straightforward, but the tax reporting can be tricky. I’ve even seen instances where people paid taxes twice on the same dollars earned! Yikes! So work with a qualified financial planner or CPA to make sure it’s executed correctly.
Here’s a link to a blog post I wrote that explains the step-by-step process of the Backdoor Roth IRA strategy.
4. Health Savings Account (HSA): The Triple-Tax Powerhouse
A Health Savings Account (HSA) might be the single most powerful account under the tax code—and yet, it’s one of the most misunderstood.
Should I invest in an HSA if I’m a Big Law attorney?
In most cases, yes. Here’s why.
The Triple Tax Advantage
- Tax-deductible contributions – reduce your taxable income.
- Tax-free growth – invest inside the HSA with no ongoing taxes.
- Tax-free withdrawals – for qualified medical expenses.
That combination makes it unique—no other account gives you all three.
But keep in mind that to get access to an HSA, you must select the High-Deductible Health Plan during your benefits election.
The Smarter Strategy
The mistake most people make? Spending from the HSA for normal medical expenses. Instead:
- Pay out-of-pocket for current medical costs.
- Invest your HSA funds and let them compound.
Over time, this could turn into a six-figure healthcare fund for retirement, which you can even use for Medicare premiums and long-term care costs. And even if you don’t need it for medical expenses, after age 65, you can withdraw for any purpose (just taxed like a Traditional 401(k)).
Medical emergency before retirement? Use your HSA! It’s better than racking up credit card debt.
Bottom line: If you’re eligible for an HSA, max it out and invest the funds—it’s one of the most tax-efficient moves a Big Law attorney can make.
5. Brokerage Account: Flexibility Without Strings Attached
Retirement accounts are amazing—but they all come with restrictions. Withdraw before age 59½? Taxes and penalties. Use your HSA for non-medical expenses? Taxes and penalties.
That’s where a regular brokerage account shines.
Why You Need One
- Flexibility: No contribution limits, no withdrawal restrictions.
- Mid-term goals: Want a vacation home in 5–10 years? A brokerage account lets you invest that money instead of letting inflation eat it away in a savings account.
- Early retirement: If you want to step away before 59½, you’ll need funds outside retirement accounts to bridge the gap.
The tradeoff? No tax breaks. But what you lose in tax benefits, you gain in freedom. And for high-income professionals like Big Law attorneys, flexibility is often worth it.
Putting It All Together
These five accounts—High-Yield Savings, 401(k), Roth IRA, HSA, and Brokerage—aren’t just random financial tools. They’re the building blocks of a smart, flexible financial plan.
If you’re earning Big Law money, it’s not just about grinding harder. It’s about making your money work harder for you. Done right, these accounts give you:
- Safety (HYSA emergency fund).
- Tax advantages (401(k), Roth, HSA).
- Growth potential (brokerage).
- Flexibility (all of the above working together).
And that combination is what helps you move from simply collecting a paycheck to building real, lasting wealth.
Need Help Making a Plan?
If you’re asking yourself questions like:
- Which 401(k) option should I use if I’m a Big Law attorney?
- Should I invest in an HSA if I’m a Big Law attorney?
- How do I balance saving for today versus investing for tomorrow?
You’re not alone. The truth is—personal finance isn’t about doing everything. It’s about using the right tools at the right time for your unique situation.
If you want a personalized strategy to decide how much goes into each of these accounts—whether your goal is paying off student loans, buying your first home, or building your exit plan out of Big Law, schedule a call today!
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