Been noticing a lot of people comparing Law to IB lately when talking about comp. That article, which took the average MD salary on Wallstreet and compared it to hotshots in law, has a fundamental bias but besides that I wanted to bring up a point on the effect of bringing banks public.
The key reason that wallstreet banks don't pay as much as they used to? Might be government regulation, sure, but most of the largest banks are PUBLIC. Investors cannot justify having such high SG&A costs because at the end of the day that is what we all are, including MDs. Sure, we all get equity in our companies, but the majority of the firms are owned by outside investors, not the employees. The difference between the current wallstreet model and the model of a law firm is that partners at law firms are given equity and they themselves are the majority shareholders. Therefore, the comp is drastically different as they control the payment structure.
If we really want to see compensation become as competitive at the higher ranks as law, banks need to be taken private. Look at Centerview for reference, and the smaller firms that are non-public. I can almost guarantee you Partners at Ducera are quite happy with comp if nothing else.
If MD's at LMM boutiques can make upwards of 1-2mm a year because of fee generation working on sub 100mm deals, what does that say about the behemoths that bring in 20bn of annual transaction value a year at the popular banks.
What do you think?
(1) Well, not quite. Ir compared average partners to non-group-head-and-above-MDs. That isn't quite apples to apples but it is far closer than you are saying.Yes it did also include comparing top partners to the average non-group-head-and-above-MD but don't pretend that's all it said.
(2) Otherwise, yeah. This is a lot of it
Bulge bracket MDs do rely on selling credit and the Brand to a large a extent to make money, boutiques are exclusively focused on financial advisory (M&A, Rx etc) which requires much more of a human touch, hence the high pay
We are COGS baby. Them back office boys is SG&A
OP is a loss on assets disposed
Nah. Product groups are COGS. Coverage groups are SG&A.
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