Do top BigLaw partners now out-earn top finance execs or is that the wrong comparison?
I’ve seen reports that a very small number of BigLaw equity partners (e.g., at firms like Kirkland) are now making eight figures, with the very top reportedly in the \~$15–20M range. Obviously this doesn’t represent most partners, let alone most lawyers.
That got me wondering about the right comparison point. If we’re talking about the absolute top of BigLaw, is it fair to compare them to investment banking MDs? From what I understand, even top IB MDs usually aren’t making that kind of money consistently.
Or should the comparison really be to hedge fund managers or PE partners, where compensation can reach similar or higher levels (but again for a tiny fraction of people)?
Curious how people think about this, is BigLaw actually catching up at the very top, or are we just comparing apples to oranges?
It could be true. The facts are that if you have equity in something that performs exceptionally well, you do exceptionally well. IB MDs usually don't have direct ownership in the bank, but are paid on performance. It would be better to compare someone like a prop shop partner or partner at a consulting firm.
Also, while these partners make a lot of money, they're also more responsible for the firm. That means when things go tits up, they need to bail out the firm. Worst case for an IB MD is getting fired. Worst case for a law partner is losing all their equity value.
they deserve to. do you know how boring a legal DD is if you have sat in a call with them before? would argue they deserve to make at least 3x IB MDs
to IB MDs because BigLaw Partners' work is similar in substance to that of an IB MD: get clients throughout the door and retain them
the more clients the Partner brings (or the more money or workload those clients bring, even if few), the more Associates he can employ under him, and if Associates are capped at 225k/year, and he has 40 of them, that's a fixed cost for him of $9m, and everything above that goes to him (for the sake of simplicity, as there is also some sharing among Partners).
the reason why their pay does not have the same fluctuation as in finance is because lawyers sell shovels when PE firms rush for gold. They don't bear any risks. If a PE closes or not a deal, the lawyer gets paid for the DD/assistance/structuring or lending advice/or some preliminary legal work. So if lawyers end up being paid less/or some need to be laid off, this would be first seen in losses/deterioration of the PE industry, and then in law
If you made biglaw partner in the past 5ish years, you are doing better than a comparable PE or IB guy in most cases. All cash comp, floor for EP compensation at kirkland is like 2.5mm
Dumb question - wouldn't the applicable comparison be between a law firm "partner" and a financial firm "partner"?
At my firm, managing director is a tier below partner
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