Author Topic: BigLaw Compensation Track  (Read 6527 times)

tooqk4u22

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BigLaw Compensation Track
« on: December 10, 2023, 08:56:38 AM »
One of my kids has expressed interest in becoming a lawyer, still working on understanding the motivations. 

I am sure there are some big law people here and I was curious as to what the comp track is.  Starting comp and the first couple years information seems readily available but what about after that such as when one becomes a non-equity partner?

Do different practices comp differently....ie corporate vs real estate vs patent etc?


nereo

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Re: BigLaw Compensation Track
« Reply #1 on: December 10, 2023, 09:57:36 AM »
One of my kids has expressed interest in becoming a lawyer, still working on understanding the motivations. 

I am sure there are some big law people here and I was curious as to what the comp track is.  Starting comp and the first couple years information seems readily available but what about after that such as when one becomes a non-equity partner?

Do different practices comp differently....ie corporate vs real estate vs patent etc?

Not a lawyer but my ex is and I went through the entire process as a trailing spouse from law school through partner.  The challenge with this type of question is the pathways within “lawyer” are so diverse. If you are going for a big city private firm that specializes in deep-pocketed clients it’s not uncommon to draw over $200k in compensation after putting in several backbreaking (and I do stress backbreaking) years as a junior associate. Make full partner a decade or so in and you can double that if your billing is strong. Or there’s the pathway of legal council at a large university system or state government where the hours are closer to “normal” but typical compensation is closer to the $80-$100k mark.  My state government has several positions open which require a JD with a pay band of $64-72k (note: the are finding these extremely hard to fill… go figure).

I know a few environmental lawyers who are passion-driven but can’t clear $60k working for the NGO/501c employers. Public defenders and ADAs make even less than that, but often use it as a stepping stone towards high-value careers later in their career.

FWIW my ex first worked as a terribly paid ADA before transitioning to a soul crushing firm before deciding to take the stable and more work-life-balanced job at a very large public university system.

So… a not-helpfup range of $50k to $300k.

What does your kid want to do within law?

mcneally

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Re: BigLaw Compensation Track
« Reply #2 on: December 10, 2023, 10:22:39 AM »
Unlike generic "big corp" or "megacorp", "Big Law" is a more precise term that actually refers to particular types of firms. You'll need to go to a top school and be high in your class to get hired by one, then work 70 hour weeks. https://www.bankrate.com/loans/student-loans/big-law-salaries/

Unlike doctors who are basically guaranteed to make $250k+ after med school and residency (unless actively seeking positions that pay less), a starting lawyer could make anywhere from $60k to $250k. You definitely need to have an idea of what your goal and desired career path is before starting law school. (I'm not a lawyer).

eta: I have a cousin who went to law school without a plan but was good at business. He struggled finding a job a first but eventually got a job at personal injury firm, and realized he was bringing in WAY  more to the firm than they were paying so he started his own practice that now has a few other lawyers, paralegals and admin, and he makes mid-six figures (not mid 100s). I think all they do is traffic injury claims. I don't know that he provides much value to society, but he makes a lot of money.
« Last Edit: December 10, 2023, 12:31:34 PM by mcneally »

NorCal

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Re: BigLaw Compensation Track
« Reply #3 on: December 10, 2023, 10:27:27 AM »
My wife was at big law, then went to a midsize and then boutique firm.  Now she's about to go back to big law. 

"Big law" payscales generally refers to the law firms that can bill at the highest rates, not necessarily the largest firms by number of attorneys.  Only a small percentage of attorneys end up working at these firms, but these firms get disproportionate press and attention on the payscales.  Don't assume that these are applicable to all lawyers.  Maximizing comp means ending up at one of these top firms more than the area of practice.  These firms just don't do the types of work that bill at lower rates.

Also beware that there are many good reasons to avoid the largest firms as well.  There is zero life outside of work, lots of crazy work demands, insane corporate politics, and general misery.  Particularly in the first few years.  My wife is furiously trying to close some corporate deal as we're on our way to our annual Christmas gathering more years than not.

Associates at the BigLaw firms get a fixed salary, based on your years of practice.  So class of 2023 gets a salary of X and class of 2022 gets a salary of Y.  Bonuses are considered guaranteed for everyone that hits their billable hours requirements.  ~2000 billable hours is common (which is a huge amount of billable work).  Details vary by firm, but bonuses typically go up dramatically for those that exceed their billable hour requirement.  Those who don't meet the target may still get a small bonus if they do good quality work (this happened to my wife a few years).

This covers the current state of associate salaries/bonus scales at the largest firms.  https://abovethelaw.com/2023/12/biglaw-raise-bonus-tracker-2023/

Again, don't assume these payscales hold for firms that don't have the same billing rates.  My wife's boutique firm paid less than half of these scales, but also had ~40% lower billable hour requirements.

Partnership levels of comp vary heavily.  A partner is as much a salesperson and relationship manager as they are a lawyer.  Every firm does the math a little different, but a partner's pay is a function of how much revenue they bring in the door.  It's more conceptually similar to a commission than any salary.  Non-equity partners do get a fixed salary + target bonus, but that compensation is still decided function of revenue instead of being fixed for non-equity partner in the firm.  I've seen partner comp range from $350k to mutli-millions. 

I would not recommend aspiring to make millions.  The only people that make that level of income have some serious personality/character flaws that more than offset the income.  One litigation partner I knew was defending someone in a high-profile case that you would recognize from the front page of the WSJ.  He had a heart-attack right before the trial, and decided he should probably take 2-3 days off before getting back to his big case.

Most associates jump ship on biglaw jobs and go work directly for companies after 2-5 years of practice.  The compensation is lower, but there's generally better work-life balance.

GilesMM

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Re: BigLaw Compensation Track
« Reply #4 on: December 10, 2023, 10:42:51 AM »
Just like anything else, don’t go into the field unless you have a passion for it as you will be toiling away at it all day for decades so follow your passion. Get paid doing what you love.


Max law income is if you have your own firm. Sky is the limit. Max hours. Max stress. Max risk.


Min risk, stress and hours can be government or corp. Salary is commensurate.


Non-profit is probably most rewarding.

Dave1442397

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Re: BigLaw Compensation Track
« Reply #5 on: December 10, 2023, 03:14:36 PM »
A friend of mine is a partner in a mergers & acquisitions law firm.

He started off in one firm out of college, but was turned down for partnership (no idea why) and jumped ship to his current company, where he basically had to start over. I always say it's a fantastic lifestyle for his wife and kids, but not something I could ever do myself. The work never ends, and with international clients, the hours are pretty much 24/7.

He once said that the worst thing that airlines ever did was introduce wifi on transatlantic flights. That six hours used to be the only downtime he ever got from work-related emails and text messages.

He's trying to wind down his career in the next few years and retire, and he said he won't miss it for a second.


YttriumNitrate

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Re: BigLaw Compensation Track
« Reply #6 on: December 10, 2023, 03:48:59 PM »
Here are the bi-modal starting salaries for the law school class of 2018. If your kid is thinking about trying to do big law, they should also look up what percent of 1st year associates make partner.
« Last Edit: December 10, 2023, 03:50:34 PM by YttriumNitrate »

Laura33

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Re: BigLaw Compensation Track
« Reply #7 on: December 11, 2023, 09:06:39 AM »
I was going to make the point that graph is (that it's basically binary -- you have a few at very high salaries, and then a lot more at much lower salaries).  So thanks for posting that!

Here's the thing with BigLaw:  their business model counts on your kid not making partner.  It is very much a quid pro quo kind of thing:  the kids give up their lives for 2-5 years so they can get their law school loans paid off (often in the hundreds of thousands) and have a fancy name on their resume; the firms pay them a metric shit-ton, bill the clients for a metric shit-ton more, and then let the vast majority of associates go by the time they're in ther 4th or 5th year.  The firms manage those huge salaries by operating with a pyramid, where you have a ton of younger, salaried people supporting one equity partner at the top of the heap.  So if you go into it with your eyes open and are willing to bust your butt for 3 years in law school to even get one of those jobs, then bust your butt even more for that first couple years to get a clean slate on your debt, by all means go for it.

OTOH, if you don't want those kinds of hours, then you need to have some plan to pay for school/pay off the debt before jumping.  Otherwise, you become a slave to that debt.  I had a friend back in the '90s with $100K in law school loans (he got in to Harvard Law, and who says no to Harvard?).  Decided very quickly that he really wanted to be an FBI agent instead.  But had to work for 5-8 years to get the loans paid off before he could afford to quit and do what he really wanted to do.

Government jobs pay ok -- feds better than state -- but they are very much in demand, and they don't hire right out of law school.  In my area, law firm for a couple of years, then a jump to DOJ, is a pretty common path.  Public interest jobs tend to pay the least.  Another common track is work for a firm for a few years, then jump ship to a client or another company.  Those jobs can pay really well -- not big-law equity-partner level, but you can get things like stock options and bonuses and such (I had a friend who was a few years behind me in law school who was making over $500K, and not even at a super-high level within the legal department).  But the downside is that many of those companies work their lawyers just as hard as BigLaw firms do.  There is a big span of jobs at the corporate level, just as there are within law firms.

One thing to ask your kid is what kind of law?  Things like mergers and acquisitions tend to be largely run by big firms; litigation is often by the big firms on one side and solo practitioners/smaller plaintiffs' attorneys shops on the other.  There are a number of specialty areas that can be a nice niche if it suits your skills and interests; patent lawyers can very much make bank, but you have to be really fucking smart to do that.  There are a whole bunch of regulatory areas that have become complex enough to be a real specialty; I'm in one of those, and it suits me, because it's like putting together a puzzle (and arguing -- and I like both puzzles and writing, so I'm good).  If he's entrepreneurial, he could do very well on the plaintiffs' side; most of those firms are much more "you eat what you kill," so I wouldn't go that route unless he's willing to hustle (and good at it) and is savvy as much as/more than "book smart." 

tl;dr:  "want to go to law school" can mean a huge variety of things.  Unfortunately, with how much school costs nowadays, you can't really just take a flier on it and see what happens.  I'd ask "why" and "what" and "how" beforehand, so that you know there is a well-thought-through plan that suits your kid.  Generally speaking, people who choose law school because they see the awesome salaries tend to be the least happy with their career choices.   

roomtempmayo

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Re: BigLaw Compensation Track
« Reply #8 on: December 27, 2023, 10:47:18 AM »
Here are the bi-modal starting salaries for the law school class of 2018. If your kid is thinking about trying to do big law, they should also look up what percent of 1st year associates make partner.

Yes, and I'll add that nobody thinking about applying to law school can know that they will end up in the Big Law salary cluster, instead of the ordinary outcome of starting at 70-80k with a top end of 150-200k (salaries have gone up quite a bit since 2018).

Unless the ordinary outcome would be acceptable, I would never encourage someone to go to law school thinking they'll end up in Big Law.  It's a recipe for disappointment in a field already filled with unmet expectations.

 

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