Lawyers make more than bankers now?
https://www.wsj.com/articles/on-wall-street-lawye…
Curious to hear thoughts on this
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Not really accurate. The article is comparing the top 1% of partners to the average MD. Plenty of bankers out there making 8+ figures.
I noticed that too. Also is there a way to see comments on WSJ? It says like 185 comments but I don’t see them when I scroll to the bottom.
Works on my phone.
Same. Is this just a company laptop type thing?
The article tells you the average MD that isn’t a group head gets paid about $2m. Big law partners average about $3m. The article doesn’t make that clear but it does say that in a very round-a-bout way
Not really when the average equity partner at a top tier law firm makes close to 8 figures.
https://en.m.wikipedia.org/wiki/List_of_largest_law_firms_by_profits_pe…
Profits per equity partner is not the same as compensation.
This is talking about the very top lawyers, though in general, all else equal, seniors in a partnership get a much larger piece of the pie than seniors in a publicly traded company.
A lot of people here do lol. Banking’s biggest appeal is the money, and if another field has them beat in that area, it’s less appealing as a career path.
Not really an apples to apples comparison though considering you need to go to school for another 3-years to be a lawyer while most folks jump into IB right out of undergrad and a lot of people in IB only use banking as a stepping stone to set themselves up to transition into other industries.
Been a less appealing career path… outside of the analyst program
You are all ignoring the part about average non group head mds earning 1 to 2 million a year which is the SAME as 20 years ago (confirmed that with several coworkers/family friends as being very true).
That's pathetic
Yeah, the wage stagnation is wild. We should really be upping our EOY tips to our MDs from 10% to 15%.
What's the reason for this?
In the UK the average partner defo makes more than the average MD. Also, M&A fees for lawyers are almost flow business vs bankers who pitch / try to put something together for months. You can close deals without bankers but not without lawyers.
The average analyst in the US gets paid more than both MDs and Partners in the UK. Eurotards btfo
Is this true?
Lol the writing on that is so bad...
"We're investment bankers"
(Character actually works in a hedge fund)
While being a lawyer is undoubtedly a worse career than being an investment banker, the dismal real income growth earned by investment bankers in the last 20 years has been a disappointment. Banks seriously need to shift their focus back a little more to paying their employees / partners instead of just their shareholders.
Lol, bank shareholder returns are already dismal
There's a website somewhere with the big law salary scales from associate 1 to 8 and you can adjust for inflation with the pay from previous years. Law associate comp is actually the highest its ever been even when adjusted for inflation. Guarantee you can't say the same about banking.
The partners mentioned on for those firms are all blue chip pedigreed lawyers at the best law firms. Not logical to compare them to an average MD...
The article was definitely jarring. It seems like the generalist nature of law makes it more conducive to making multi multi millions than the increasingly specialized and competitive nature of banking. Some of the data points were damning too. The people arguing about 3 years of law school are completely missing the point. It’s a nonsensical argument to make when comparing 40 year long career. The fact that more banks are public companies also gives private law partnerships a huge advantage.
Not to mention tech offering the same pay for half the work and law first year income now hitting 240k while IB associates make an only $175k base with questionable bonus. I hate to say this as much as as anybody, but it does seem like at present we’re losing this battle and every battle. Tech, law, hell even random roles keep gaining more and more ground while we lose any advantage we had… our industry and leaders are letting us down more by the day. They have failed us.
This is just straight up wrong dude. Check out some of the big law posts. Starting lawyer salary around $250k, almost $100k less than a good year for IB associates, then no bonus. Total comp barely increases year over year, while is not the case in banking. Banking sucks, but comp wise isn’t a contest. Not going to comment on the tippety top comparison between the two fields because only relevant to like a few thousand people
While not as lucrative as banking innitially(compared to associates), I'd push back on the idea that it doesn't rise with time.
https://www.biglawinvestor.com/biglaw-salary-scale/
A few thousand is a drastic overstatement of the number in both law and banking making 8 figures+
It is generally easier to hold on as a lawyer than a banker. Even in current markets with layoffs the proportion being shown the door is smaller, and in 90% of times it is generally fairly straightforward to hang on for at least 5-6 years if you want to.
Finally, while partnership is hard to get, I would argue that a larger proportion of them achieve it compared to MD. However they lack the same exit opportunities, but your median T14 educated lawyer exits to a cushy in house role comparable if not slightly better hours and lifestyle compared to bankers corporate exits. The superstars who go the banking route may ultimately be better compensated as they head off to PE, but for your average employee, I'd argue biglaw may be a better choice with lower(though still stressful) hours.
Also disagree with your specialization point. Partners generally specialize. But ultimately I agree with your point that bankers are losing ground in the compensation game.
So imagine what type of sucker that makes me as someone who went to law school and just hopped on over to the buy side. Doing the George Roberts but skipping the Bear step
Starting salary for corporate lawyers fresh from law school is about $250K.
Well 215+bonus, though there is a standardized base bonus that most firms don't want to fall below based on what others announce.(last year was 20k, though some firms pay above market bonuses consistently)
Bonuses have been larger than usual these past couple of years because of the over-hot market. Especially 2020 and 2021. Even if last years bonuses were to hold, which is unlikely given the current market, we would see bonuses be 20k, or 235 total. Firms are firing people rn though, so unlikely to see big bonuses this year.
https://www.biglawinvestor.com/biglaw-salary-scale/
based on my understanding, they are paid a good base but not much bonus (because they charge per hour and not based on success as per most IBs)
This is broadly true, at least pre-partner
Yes, but your base is base no matter what. Where in years like this bankers are going to get raked.
This is wrong. It’s comparing the very top lawyers to your average BB MD. Everyone knows the real money in banking is in the boutiques and the independents and the top people there are making more than the top lawyers (heard the best guys at Evercore made 50+, top guy at William Blair 30+ in 2021 and those aren’t the best paying firms), Still, it’s a phenomenal gig to be a good M&A partner at Kirkland or Latham. And they definitely have to hustle less for their money (but probably work harder)
If you are going to compare top IB boutiques then you should compare to top boutique law firms. I agree the WSJ article isn’t exactly apples to apples but that doesn’t excuse you doing the same thing
Exactly. Would be great to hear some real, logical, well reasoned arguments that aren’t just pure cope. Any lawyer can pop in and say “hEaRd tHaT elite boutique law firm Goodman Specter Tinkleburg paid 80mm+ last year.”
Idk about you guys but what the article says seems very reflective of what my non group head MDs are making (from what they insinuate / how they complain). If anybody here has an MD they reasonably think is making 50mm like the commenter above said I’m all ears lmfao
The difference is that in law, typically the top partners at the big firms make more than boutiques (exception, people like David Boies but it’s rare).
And it’s not like places like Evercore are boutiques - Evercore has more M&A bankers than Goldman or Citi. The distinction is that Evercore runs a capital light model, BB firms use up a ton of capital
Can you list some examples of boutique, corporate or transactional law firms? I know there are litigation boutques that can make a killing, but I assume their comp is much more variable, like banking. Just haven't heard of boutiques that outcompete Kirkland, Watchell, etc.
William Blair Tech Group heads cleared $50 M in 2021 from what I've hear.
Do top MDs make more than the CEO in certain years? Quick Google search shows the Evercore CEO made $15.18m incl bonus last year.
If average partner comp at Wachtell is $8.4m and they have 91 equity partners and PEP at Kirkland is $7.4m and they have 490 equity partners, then I would hazard a guess that there is definitely some rainmaker lawyers pulling $30m+ there, especially since a lot of these firms have eat what you kill models.
Yes, at K&E there are probably rain makers well into eight figures. But should flag that Wachtell is a true partnership model so, if PEP is $8.4m, every one of them makes the same $8.4m.
Will be a nice year for them with Twitter though
Higher junior bases is huge too. So many bad bonuses over the years in ib.
Get ready for bonuses next Jan/feb.....
Generally, you can correlate total comp with the amount of risk taken and to a lesser extent hours. IB, low (but definitely not no) risk and long hours. Law, basically no risk and similar hours. Unsurprisingly, IB makes more. Add PE to the mix, lower to medium risk and hopefully less hours and comp is less than IB as a guarantee but has potential to scale well in excess as you progress and take on more risk as a decision maker. Then throw in HF and it holds - higher risk and very manageable hours with low guaranteed comp but asymmetric upside (and the potential to get fired if you’re not good at it).
That might be true but FT Partners 140k base btw
.
I have been seeing this trend play out in real life. A relatively young K&E/Latham partner is buying new homes (plural), high end vehicles, a yacht etc while the BBbankers (and even some MF PEguys) are hunkering down in their singular, $1mm home with nowhere near the toys etc. I think they lawyers are being stupid with their money and this article indicates the peak of this trend but it's interesting to see real time.
These big law attorneys I mention of course do not drive deal terms and don't really "counsel" mostly doing boiler plate work, you can argue it's more than that but it's really not.
It seems like banking is too regulated to make a come back, but the lawyers cannot continue to make more than those executing the deals imo something will have to give
The big thing here is the (relatively) poor pay at BBs.
Its sad. BBS have become corporate America. I think you get great experience there but no one who doesn’t want to be poor should work at a BB
A jr K&E partner is buying multiple homes? Idk about that
Although I think on avg K&E partners made like $7.5mm in 2021 or something like that. Not sure with M&A volumes done what they are doing
Believe it. Guy hasn’t been a partner for even 5 years and it’s not family wealth. They are paying a ton, for now…
Surprised no one here is mentioning the fact that law school is insanely expensive a large time lift in general when pursuing the JD.
Not really. 3 year commitment and 250k? Over a 30-40 year career, that’s negligible
I mean it’s 1 more year than BSchool which although isn’t a hard requirement, helps in the parh to the top
Sorry for hijacking the thread but
Being an MD in IB vs partner at law or consulting? How do they compare in terms of difficulty? Would it be easier to stay longer in PE?
Read that article too - might be forced to make a career change now
I feel like this really doesn't matter that much lol
I’m surprised no one is calling out the biggest wrong in this article which is it includes front office And back office - which weighs down the average considerably - all law partners are revenue generating so a tough comparison
All this article tells me is that the BO has grown considerably in size across the industry
can you point to the part of the article that suggests this? i highly doubt a recruiting firm like bay st (the firm that quoted $1.9m avg) is placing for back office roles.
This article is flawed. It is comparing the top 1% of attorneys at the top 1% of law firms to everyone in IB. A top performing partner at a middle market / regional law firm is not making that huge money. This article is like saying Tom Brady makes more than most basketball players, therefore the NFL pays more than the NBA. This is false, the median NBA salary is $4 million and the median NFL salary is 860k.
They are taking data and manipulating it to get a shocking headline and article. Most of the people that start in Biglaw at those top firms don't make partner. A good chunk go onto corporate counsel positions and a larger chunk simply get culled out and end up at some middle market/regional firm and others go somewhere totally different.
Well if you were smart enough to go into IB you're not gonna be working at a regional law firm are you...
Classic wsj journalism making an idiot out of the less-than-average Joe. The fact that this post is a post is a goddamn joke and says wondere about the poster. For the idiot that posted this post to jerk himself on the internet: look up declining big law partners profits and the reasons for them(hint: they are gradually becoming leas relevant.) Now, stop wasting peoples’ time.
Recent article on VP in Product Management at FAANG or similar is >$1M per year. High growth non-FAANG was comparable. But $3M+ needed CPO.
If you're the partner of record for a large multi-national company, you're getting a cut of every dollar they spend with you. If your firm is doing work with them in the US, EU, and EMEA and you have lower level partners and grunts handling all the international work, you're passing work onto your litigation department, your firms Restructuring group is handling an issue in Mexico for one of their subsidiaries, etc. you're getting a F*CK TON of revenue credit. If you're the relationship partner for two active MM PE funds, you're now generating revenue on the fund level and the port co levels - giving you potentially 129 clients because of your two starting relationships. Yes, those funds and port cos are going to pass legal work around, but getting a piece of it nets you sizable recurring revenue streams. These relationship partners are the creme de la creme, the top 2 or 3 lawyers at the top ~20 firms. These ~50 lawyers are the ones mentioned in the article.
We in banking have opportunities for being kept on retainer, parceling out work to other internal groups, etc, but it is at a much smaller scale. The "average" MD at a BB makes $2M according to the article. They are in no way comparable to the stratospheric partners the article discusses. There are still plenty of MD's who are not group heads who have had great years and earned well into 8 figures over the last few years. But they are not the 'average," they are the exception. Public company pay is tough, especially when compared to the partnership experience. These "average" MD's at BB's number in the several thousand.
Looking at the AmLaw list, you see how many equity partners there are in the firms and what the partners "average." But it's like the NBA - according to the salary cap and a 15 man roster, the "average" per player is ~$9.5M/yr. Not many players are on average contracts, though. BigLaw has lawyers earning outsize pay as a result of longevity, being the relationship partner to a number of huge clients, and the accumulation of equity within the partnership over their 30 year run - giving them opportunities to earn 30, 50, 70 million in a year in a crazy market (like 2020-2022 were). And they have a bunch of partners pulling $1-2M for an 'average' of $4m.
A better comparison really is to the EB/partnership MD's who don't have huge Basel and Fed capital requirements which force low-capital activities (such as advisory) to 'subsidize' the more capital needy parts of the industry. As noted, you have guys at the EBs and similar shops all more than capable of pulling in 8 figure paydays (just not as consistently as a lawyer could).
And, let's be very clear to all the snot-nosed, prestige whore, 19 year olds on this forum - pulling $1.5M is nothing to sneeze at and puts you squarely in the top 0.1% of earners in America. Let's say that again. Pulling $1.5M puts you in the top 0.1% of earners in America. It doesn't buy you the Greenwich waterfront compound, but you will live in excess if you are smart.
1.5m is not the top 0.1% as fyi
I think first year law associates will get out-paid by their banking counterparts because salary growth for associates is not as fast as in banking.
And partner lawyers will make more than MDs in banking.
A1 banking >= A1 lawyer
A2 banking > A2 lawyer
…
VP2 banking > A5 lawyer
…
but then when the lawyer hits partner or a banker hits MD, it flips for the reasons others describe.
MD1 lawyer < First-year partner at law firm
Lawyers that become bankers do well
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