For many lawyers, years of long hours, demanding cases, and client work lead to well-earned financial success. But here’s a truth I see often: a strong income on its own doesn’t guarantee long-term security or a comfortable retirement. Without careful tax planning, a significant portion of that income can slip away—and the opportunity to build lasting wealth goes with it.

The reality is that lawyers face unique financial complexities. You may be incorporated, working in a partnership, or managing a professional corporation while juggling debt repayment, investments, and family responsibilities. That’s where a clear tax strategy makes all the difference.

Professional corporations

For many lawyers, incorporating is the first major tax-planning decision. A professional corporation can be a powerful tool for deferring taxes and building wealth.

When income is earned personally, it’s taxed immediately at high marginal rates. But when income stays inside a corporation, it can be taxed at the small business rate—often less than half of the personal rate—leaving more capital to grow. That deferral is one of the single most effective advantages professionals can leverage.

Of course, incorporation also adds complexity. Passive investment income inside a corporation is taxed at some of the highest rates in Canada. Without planning, the benefits of incorporation can be eroded. The goal is to strike the right balance: using the corporation as a tax-efficient growth vehicle while avoiding pitfalls that create unnecessary tax burdens later.

Salary vs. dividends: getting the mix right

Perhaps the most common question I hear from lawyers is: should I pay myself a salary or dividends?

The truth is, there’s no one-size-fits-all answer. Salaries allow you to contribute to CPP and build RRSP contribution room—two important long-term benefits. Dividends, on the other hand, don’t create CPP or RRSP room, but they are taxed differently and can sometimes result in lower overall tax bills.

The best approach often lies in a blend: drawing a salary sufficient to maximize RRSP contributions and CPP benefits, while also paying dividends to smooth out income and maintain tax flexibility. The right mix depends on your practice, your family situation, and your long-term goals.

What matters most is being intentional. Too often, I see lawyers take whatever is easiest in the moment—only to realize years later they’ve missed out on significant tax advantages.

Leveraging RRSPs, IPPs, and holding companies

Beyond salary and dividends, there are other powerful tools lawyers can use to build tax-efficient wealth.

• RRSPs remain one of the most straightforward ways to defer taxes while saving for retirement. Contributions reduce taxable income today and allow investments to grow tax-free until withdrawal.
• Individual Pension Plans (IPPs) can be even more powerful for seasoned lawyers with stable incomes. An IPP allows much larger contributions than an RRSP—especially as you get older—while providing creditor protection and predictable retirement income.
• Holding companies can also play a role by separating active business income from passive investments. Used correctly, they provide additional flexibility for tax deferral and succession planning.

Each of these strategies comes with its own rules and considerations. The real value comes from fitting the pieces together in a way that reflects your unique goals.

The bigger picture: clarity before complexity

Lawyers are trained to deal with complexity, but when it comes to their own finances, many underestimate just how complicated their situation can be. Between incorporation rules, dividend strategies, estate planning, and tax laws that change by province, it’s easy to feel confident on the surface while missing critical opportunities.

I often remind clients: don’t start with the how, start with the why. Why do you want your money working harder—so you can spend more time with your family, support a cause you care about, or step back from work earlier than planned? Once that “why” is clear, the strategies have a way of falling into place naturally.

Why planning matters now

The earlier you build tax efficiency into your practice, the greater the long-term impact. But it’s never too late to adjust course. Even seasoned lawyers with thriving practices can uncover opportunities to reduce taxes, protect wealth, and make retirement more secure.

I’ve seen the difference firsthand. With thoughtful planning, lawyers are able to preserve thousands of dollars over their careers—funds that would have otherwise gone to taxes. That can mean more flexibility, more security, and more freedom for the people and goals that matter most to you.

A partner for your long-term success

Tax planning for lawyers is about being proactive, intentional, and aligning financial structures with long-term goals. It means putting strategies in place that protect income, reduce unnecessary tax, and create clarity around the future. With the right plan, wealth becomes something sustainable—built to support both career success and personal security.

At Sylvain Morin & Associates Private Wealth Management, we help lawyers and professionals bring order to complex financial lives. Together, we build strategies that fit, adapt, and grow with you—ensuring your wealth works as hard as you do.

Success isn’t just about earning more. It’s about transforming income into lasting security and peace of mind.

Based in Halifax, Sylvain Morin helps high-net-worth families and professionals create estate and wealth strategies that bring clarity, confidence, and peace of mind.

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_{This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Sylvain Morin is solely responsible for its content. Seek advice on your specific circumstances from an IG Advisor. Trademarks, including IG Wealth Management and IG Private Wealth Management, are owned by IGM Financial Inc. and licensed to subsidiary corporations. An Individual Pension Plan is a special type of defined benefit pension plan for certain individuals.  The assets of Individual Pension Plans can be invested in any pension-eligible investment. Speak to your IG Advisor to learn more.  Mutual funds and investment products and services are offered through the Mutual Fund Division of IG Wealth Management Inc. (in Quebec, a firm in financial planning). Additional investment products and brokerage services are offered through the Investment Dealer, IG Wealth Management Inc. (in Quebec, a firm in financial planning), a member of the Canadian Investor Protection Fund.}