Small Law Firms

Determining The Opportunity Cost

Understanding the potential missed opportunities when choosing one option over another allows for better decision-making.

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young woman lawyer thinking deciding decision thoughtfulHave you ever been presented with an exciting opportunity that seemingly came out of nowhere? It could be an offer to be an adjunct professor at a law school, an invitation to sit on a nonprofit board, or the ability to speak to an aligned audience about your field of expertise. The allure of what’s presented can make you quickly say yes. But should you? Looking at the opportunity cost is important when making a decision.

Opportunity costs refer to the potential benefits a lawyer misses when choosing one alternative over another. Because opportunity costs are unseen, they can be easily overlooked. Understanding the potential missed opportunities when choosing one option over another allows for better decision-making.

This week, I was presented with an opportunity that would allow me to venture into new areas of influence. On paper (well, over Zoom), the potential offer was very tempting and aligned with how I would like to grow in my career. My impulsive, quick-start personality wanted to say yes immediately, but the more deliberative part of me knew I needed to look at the opportunity cost of my decision. So, I headed to Google for inspiration and came up with five questions that I’d consider before deciding.

Does The Opportunity Pass The Smell Test?

The smell test is best described as a gut check. From the inception of the offer, idea, or opportunity, how does it feel in your body? If it feels great, you know you are already on the right path. If your stomach starts to turn or you feel restless, that might signify that the offer isn’t right for you. If you are like me and feel “nerve-cited,” you may not have enough information yet.

Is The Opportunity Values-Aligned?

What are your personal and professional values? A while back, I wrote about the importance of establishing values. By taking this opportunity, can you uphold your standard of ethics? Are you passionate about the subject? Will it leave the type of legacy you desire? If the answer is no to any of these questions, the opportunity may be a bad fit for you.

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Have You Clarified The Components?

Go back and look at the details of the offer or decision. Have you asked all the questions you need to ask? Are you sure of all of the deliverables that are expected from you? Do you have time for the commitment? Have you written them down or gotten them in writing? If not, follow up and get the information needed to help you make the right decision.

Have You Listed The Pros And Cons?

Use factors to decide whether this is a good decision for you in this season of your life. Pros could be more revenue and time flexibility. Cons could include travel, time away from family, and long hours. Everyone’s list of priorities will be different. After writing your list, take a look and see which column dominates. Having more in one column doesn’t mean that column wins. You still have to decide the weight to give each factor.

Is It A No?

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With some, if not many, opportunities, you will have to say “no.” Don’t be afraid because other opportunities will come. It is not your last yes. Mere weeks after I had launched my firm, I was offered a very lucrative and cushy job. All I had to do was a sign on the dotted line. It was very tempting as my cash flow was low, prospects of future clients were dim, and building my operational infrastructure was hard. Many colleagues thought I was crazy for saying no. But I knew my calling and persevered. Had I accepted the job, I would have missed out on what I am doing now, helping intentional women protect their families through estate planning. And although it took some time, my firm generates more revenue now than I would have had I taken that job.

After going through these questions to determine the opportunity cost, choose whether or not the offer is right for you. I’d love to hear your comments at iffywrites@ibekwelaw.com.

Iffy Ifeoma Ibekwe HeadshotIffy Ibekwe is the principal attorney and founder of Ibekwe Law, PLLC. She is an estate planning attorney evangelist for intergenerational wealth transfer with effective wills and trusts. Iffy is writing her first book on culturally competent estate planning, available in 2022 (prayers up!). She graduated from The University of Texas School of Law and has practiced law for over 14 years. Iffy can be reached by email at iffywrites@ibekwelaw.com, on her website, and on Instagram @thejustincaselawyer.

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