If you have been a biglaw partner for 10+ years, how much wealth have you accumulated?

[Anonymous]

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Anonymous wrote:My experience in my firm is similar to those that have been posted here. It really does vary partner to partner, substantially. We are a one-lawyer non-equity biglaw partner family, and I would say our net worth is somewhere in the 600-750 range, one year in. These days, student loans are a bear, and it is difficult to really start putting away money until you are able to buy a home, and decent homes around here are all in the 700-800 range - a big pill to swallow if you don't have parental help.

Jesus only 600k NW for a biglaw partner? Yikes, what have you been doing the last decade?

Read much? PP is a 1st year partner (typically 8-9 years in practice). I think this is about the norm in terms of NW at that stage if you exclude people with family money, people with no loans, double biglaw families, etc. Fortunately the numbers (particularly investments) start to accelerate pretty rapidly at that point.

I was in the same spot at same stage of my career. We “under-saved” during associate years—had massive loans, had kids relatively early, huge mortgage, and frankly wanted to live a nice life given the work I was putting in. Turned out more than OK financially and I wouldn’t change a thing. My kids got to grow up in the neighborhood we wanted, our lifestyle was always nice. Would I have an extra million if I lived in a studio apartment eating canned tuna for ten years, and put off having kids until I was one of these geriatrics at the Kindergarten? Sure. But that sounds miserable.

Yeah I understood he has been a partner for 1 year, and was adding in 8+ years as an associate and calling it roughly a "decade" in biglaw.

I would think a decade in biglaw would lead to greater than $600k networth. Especially with the incredible bull market we've enjoyed for the last 9 years.

NP. I've spent a decade in biglaw and my net worth is $700. I still have student loans left to pay, too (low interest). You know biglaw provides no 401k match, right? I swear, most people in this site are so out of touch. Not all of us had mommy and daddy pay for college and grad school.

Yeah, I was a biglaw associate for a little more than 5 years. I do know that there is no 401k match. I graduated in 09 with about $175k in student loans, so your presumptuous "mommy and daddy" comment is off-base. But maybe I am out of touch. I saved and invested a ton of my biglaw comp, and I guess not everyone does.

What was your net worth after 5 years in biglaw, after repaying $175k? Did you have any kids in those 5 years? What was your rent? Do tell how you blew everyone out of the water.

[Anonymous]

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My experience in my firm is similar to those that have been posted here. It really does vary partner to partner, substantially. We are a one-lawyer non-equity biglaw partner family, and I would say our net worth is somewhere in the 600-750 range, one year in. These days, student loans are a bear, and it is difficult to really start putting away money until you are able to buy a home, and decent homes around here are all in the 700-800 range - a big pill to swallow if you don't have parental help.

Jesus only 600k NW for a biglaw partner? Yikes, what have you been doing the last decade?

Read much? PP is a 1st year partner (typically 8-9 years in practice). I think this is about the norm in terms of NW at that stage if you exclude people with family money, people with no loans, double biglaw families, etc. Fortunately the numbers (particularly investments) start to accelerate pretty rapidly at that point.

I was in the same spot at same stage of my career. We “under-saved” during associate years—had massive loans, had kids relatively early, huge mortgage, and frankly wanted to live a nice life given the work I was putting in. Turned out more than OK financially and I wouldn’t change a thing. My kids got to grow up in the neighborhood we wanted, our lifestyle was always nice. Would I have an extra million if I lived in a studio apartment eating canned tuna for ten years, and put off having kids until I was one of these geriatrics at the Kindergarten? Sure. But that sounds miserable.

Yeah I understood he has been a partner for 1 year, and was adding in 8+ years as an associate and calling it roughly a "decade" in biglaw.

I would think a decade in biglaw would lead to greater than $600k networth. Especially with the incredible bull market we've enjoyed for the last 9 years.

NP. I've spent a decade in biglaw and my net worth is $700. I still have student loans left to pay, too (low interest). You know biglaw provides no 401k match, right? I swear, most people in this site are so out of touch. Not all of us had mommy and daddy pay for college and grad school.

Yeah, I was a biglaw associate for a little more than 5 years. I do know that there is no 401k match. I graduated in 09 with about $175k in student loans, so your presumptuous "mommy and daddy" comment is off-base. But maybe I am out of touch. I saved and invested a ton of my biglaw comp, and I guess not everyone does.

What was your net worth after 5 years in biglaw, after repaying $175k? Did you have any kids in those 5 years? What was your rent? Do tell how you blew everyone out of the water.

Simmer down, I'm sure you're doing fine. I graduated in 09 and had a shade under $400k when I left in 2015. Nothing to write home about. Net worth is about $850k now (about 9 years out of law school). We had a kid roughly contemporaneously with when I left biglaw, and we bought a condo back in 2012.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My experience in my firm is similar to those that have been posted here. It really does vary partner to partner, substantially. We are a one-lawyer non-equity biglaw partner family, and I would say our net worth is somewhere in the 600-750 range, one year in. These days, student loans are a bear, and it is difficult to really start putting away money until you are able to buy a home, and decent homes around here are all in the 700-800 range - a big pill to swallow if you don't have parental help.

Jesus only 600k NW for a biglaw partner? Yikes, what have you been doing the last decade?

Read much? PP is a 1st year partner (typically 8-9 years in practice). I think this is about the norm in terms of NW at that stage if you exclude people with family money, people with no loans, double biglaw families, etc. Fortunately the numbers (particularly investments) start to accelerate pretty rapidly at that point.

I was in the same spot at same stage of my career. We “under-saved” during associate years—had massive loans, had kids relatively early, huge mortgage, and frankly wanted to live a nice life given the work I was putting in. Turned out more than OK financially and I wouldn’t change a thing. My kids got to grow up in the neighborhood we wanted, our lifestyle was always nice. Would I have an extra million if I lived in a studio apartment eating canned tuna for ten years, and put off having kids until I was one of these geriatrics at the Kindergarten? Sure. But that sounds miserable.

Yeah I understood he has been a partner for 1 year, and was adding in 8+ years as an associate and calling it roughly a "decade" in biglaw.

I would think a decade in biglaw would lead to greater than $600k networth. Especially with the incredible bull market we've enjoyed for the last 9 years.

NP. I've spent a decade in biglaw and my net worth is $700. I still have student loans left to pay, too (low interest). You know biglaw provides no 401k match, right? I swear, most people in this site are so out of touch. Not all of us had mommy and daddy pay for college and grad school.

Yeah, I was a biglaw associate for a little more than 5 years. I do know that there is no 401k match. I graduated in 09 with about $175k in student loans, so your presumptuous "mommy and daddy" comment is off-base. But maybe I am out of touch. I saved and invested a ton of my biglaw comp, and I guess not everyone does.

What was your net worth after 5 years in biglaw, after repaying $175k? Did you have any kids in those 5 years? What was your rent? Do tell how you blew everyone out of the water.

Simmer down, I'm sure you're doing fine. I graduated in 09 and had a shade under $400k when I left in 2015. Nothing to write home about. Net worth is about $850k now (about 9 years out of law school). We had a kid roughly contemporaneously with when I left biglaw, and we bought a condo back in 2012.

Oh, and meant to add -- haven't finished paying off the full $175k student loans. I still carry about $50k of student loan debt at 3.5% interest.

[Anonymous]

I think the PP first year partner numbers sound about right. I’m 8 years into biglaw (up for promotion this year) with a household networth of about $700K. So that include spouse’s worth (though spouse does not work in biglaw, salary about $100K). Between us we had about $160K in loans. We spent 4 years paying those off, then saved a down payment and bought a house in 2016. We also had two kids along the way and now pay $4500/month in childcare. So yeah, the money goes fast.

[Anonymous]

Anonymous wrote:I think the PP first year partner numbers sound about right. I’m 8 years into biglaw (up for promotion this year) with a household networth of about $700K. So that include spouse’s worth (though spouse does not work in biglaw, salary about $100K). Between us we had about $160K in loans. We spent 4 years paying those off, then saved a down payment and bought a house in 2016. We also had two kids along the way and now pay $4500/month in childcare. So yeah, the money goes fast.

I am the PP first year non-equity poster. We have a somewhat similar situation, but my wife makes very little money working more in a humanitarian type role (like $60k). We had student loans, though not too bad, and around the same $160k total. Have never spent lavishly at all. Did buy a house in 2014 that we are way ahead on based on improvements that were mostly my physical work. Also, I am at a "biglaw" firm inside the "v50" that doesn't generally have, during those years, consistent salaries with other firms, or high bonuses. Some years, good bonuses, other years, not so much. Also had family having to "borrow" money, and yeah, it goes fast. I also spent time outside the US with my firm, and had a business plan for that, but there was cost in that too. Overall, I am not going to sweat $200k +- on those issues.

[Anonymous]

I think it is the next 10 years that matter most towards wealth accumulation. If the income starts at 1-2 million at a biglaw firm it's pretty easy to sock a portion of it away in investments, as long as no one is flying first class everywhere and buying yachts. Our net worth went from 2 million to 30 million in 20 years, thanks to some great stock market returns and rising top partner pay in the last 10 years.

[Anonymous]

Agree that big accumulation in wealth starts at 5 yrs+ for big law partners, but I think that is due to where they are in their lives.

DH just made partner, I make a good income, but right we are only worth about $2.5M. However, we are expecting our expenses to go down (we have 3 kids in daycare and are paying for assisted living for one parent) in the next few years, and then all the additional money will go toward savings/retirement.

My FIL, who was partner at a midsize firm in the midwest for 40 years, accumulated about $10M in wealth, and they lived well - country club, annual vacations, nannies, paid for private schools/college/grad school all the way through for all 5 of their kids - and still live very well in retirement.

[Anonymous]

Only worth 2.5m? You should be embarrassed. At least your spouse is totally self made and came from nothing, though

[Anonymous]

I think a lot of people have a misconception about how much money you can realistically have as an attorney in Biglaw.

Last year was my first year as a nonequity partner at a v25 firm. My total take home was around $400k. By any objective measure, that's a lot of money. But where did it all go --

45% to taxes (it is higher when you are paying both sides of the self employment tax and don't have that many legit business deductions)
20% to savings (max out 401k, Roth, and HSA; remainder in investment account)
11% to student loans (finally paid off)

So right off the top you are down to only 24% or roughly $97k. Lobb off another 22k for housing (you can run the numbers but we aren't talking about an insane mortgage), another 10k in things like cell phone (I am sitting here's using an iPhone 5 btw) , cable, car insurance and health care premiums and all of a sudden you are down to the mid 60s in terms of actually living off of money.

That all being said, nobody should feel bad for me or anyone else in this situation. I am pretty frugal and being that way in my daily life allows me to extend that 65k pretty far. Moreover, if I keep saving the same amount every year, even with no income increase, I will have a nest egg somewhere around 5-10 million by retirement age. That is plenty to live off of then. But unless you are making much more than I am or living some Mr Money Mustache existence (which few biglaw people are) banking 10 million in 10 years is simply not feasible for most people in biglaw.

As others have said, biglaw is a very safe and comfortable job if you like the work (I do). You won't hit it out of the ballpark, but you can still afford a lot of the luxuries of life and have money leftover for retirement (if you budget correctly).

[Anonymous]

Will the new tax law help you out?

[Anonymous]

Anonymous wrote:I think a lot of people have a misconception about how much money you can realistically have as an attorney in Biglaw.

Last year was my first year as a nonequity partner at a v25 firm. My total take home was around $400k. By any objective measure, that's a lot of money. But where did it all go --

45% to taxes (it is higher when you are paying both sides of the self employment tax and don't have that many legit business deductions)
20% to savings (max out 401k, Roth, and HSA; remainder in investment account)
11% to student loans (finally paid off)

So right off the top you are down to only 24% or roughly $97k. Lobb off another 22k for housing (you can run the numbers but we aren't talking about an insane mortgage), another 10k in things like cell phone (I am sitting here's using an iPhone 5 btw) , cable, car insurance and health care premiums and all of a sudden you are down to the mid 60s in terms of actually living off of money.

That all being said, nobody should feel bad for me or anyone else in this situation. I am pretty frugal and being that way in my daily life allows me to extend that 65k pretty far. Moreover, if I keep saving the same amount every year, even with no income increase, I will have a nest egg somewhere around 5-10 million by retirement age. That is plenty to live off of then. But unless you are making much more than I am or living some Mr Money Mustache existence (which few biglaw people are) banking 10 million in 10 years is simply not feasible for most people in biglaw.

As others have said, biglaw is a very safe and comfortable job if you like the work (I do). You won't hit it out of the ballpark, but you can still afford a lot of the luxuries of life and have money leftover for retirement (if you budget correctly).

Sorry, you may be mixing some terminology...$400k is pre-tax. Often take home refers to after tax take home. How many years typically to equity partner and what does the bump look like? Is PPP in the $2m range?

[Anonymous]

Most lawyers at most large firms don’t make the average PPP. In my experience, I dont believe most will ever make the average. The avg is always skewed high by the top dozen or so rainmakers. The median PPP would be a much better statistic. And I assume partners in the rope 10-20 firms Have higher bases than the next 30 or more.

[Anonymous]

Anonymous wrote:Most lawyers at most large firms don’t make the average PPP. In my experience, I dont believe most will ever make the average. The avg is always skewed high by the top dozen or so rainmakers. The median PPP would be a much better statistic. And I assume partners in the rope 10-20 firms Have higher bases than the next 30 or more.

I know this thread is about money, but there seems to be some common requirements to having big $$$ at the 10+ year point as a BIGLAW partner:

1. You're the primary breadwinner and your spouse has no career (or a very minor one with modest $$$ and maximum flexibility for running the household).
2. You're spending 55-65 (or even 70) hours a week billing your time, rainmaking for clients, and firm administrative work.
3. You're not pushed out (as a non-equity partner) when times get tough (and they always do).

This is a pretty tough road to hoe and requires a spouse who is 100% on board and the stars to align.

What many BIGLAW partners realize after a while is that they can capture more than the 33%-40% of their billable rate once they have $500k or more in clients (or they can capture a firm or another partner's client). At that point, they can jump to another firm or open their own firm with like-minded partners. They don't need BIGLAW anymore, so why not cut the umbilical cord?

If you want to make big(ger) money as a lawyer, you need to leverage associates and capture 33% of their revenue stream for working your book of business.

[Anonymous]

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Anonymous wrote:It's hard to stack coins until the line between oppressor and oppressed is crossed. Depending on the individual, that doesn't happen until late 40s (for those who went straight through) or 50s or later (for those who took a more circuitous route, such as spending a lot of time in government). Only senior partners, esp big rainmakers, make a lot more than they bring in. Many relationships are institutional, and only are inherited late in one's career. Biglaw is not a path to great riches. Don't get me wrong, it's plenty comfortable. But only a small handful get to one percent wealth (currently around $12m in net worth) through law.

This. It can be a good life, but not big money. Every law firm partner I know doesn’t want their kid to go into law.

Perhaps but I still think that biglaw is one of the best risk adjusted careers if financial success is the goal. We can all decide whether financial success is the right goal but let's compare biglaw to investment banking. Certainly a decade or two ago investment banking would have hands-down been the right career path to make a lot of money. These days a lot of bulge bracket Managing Directors are probably in the $1m-$3m range. However, the career risk they have is much greater than in biglaw. Biglaw firms while increasingly cut throat still doesn't compare to investment banking--most MD's careers are over by 50. If you're over 50 in investment banking you either made it to the very top (think top management of a major investment bank) or you've been pushed out working at a boutique where it's completely eat what you kill.

The chance of making MD is no better than making partner (perhaps worse), the time you get to stay MD vs stay partner is much worse, and then the market cycle driven layoffs are more intense than in law. A good typical biglaw partner can practice well into his/her 50s perhaps 60s and then collect on a pension payout for years. So the bankers might make a little more as associates, VPs, directors (% wise bigger difference but compared to making partner in biglaw or MD in investment banking the cumulative differences are probably not much more than a year or two of comp for an MD/partner), make MD in their mid 30s (perhaps a couple years earlier) and then flame out typically within 10 years or less.

Seems hard to believe. Would you rather be a senior banker at Goldman Sachs or a senior partner at Skadden, Cravath, etc? Do others really believe this?

I know, I thought that was weird too.

In terms of wealth, you're talking 10-20M (law) vs. 100 millions (GS).

How do you get to 100 millions at GS? Those were either pre-IPO partners. I don't think anyone at GS can get to 100s of millions unless you are senior management (i.e. top 10 perhaps). Your run of the mill Managing Director doesn't stand a chance.

Of course I am talking senior management. So are the people who are talking about senior management at law firms. Again it's a case of 10-20M vs. 100M.

[Anonymous]

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Anonymous wrote:It's hard to stack coins until the line between oppressor and oppressed is crossed. Depending on the individual, that doesn't happen until late 40s (for those who went straight through) or 50s or later (for those who took a more circuitous route, such as spending a lot of time in government). Only senior partners, esp big rainmakers, make a lot more than they bring in. Many relationships are institutional, and only are inherited late in one's career. Biglaw is not a path to great riches. Don't get me wrong, it's plenty comfortable. But only a small handful get to one percent wealth (currently around $12m in net worth) through law.

This. It can be a good life, but not big money. Every law firm partner I know doesn’t want their kid to go into law.

Perhaps but I still think that biglaw is one of the best risk adjusted careers if financial success is the goal. We can all decide whether financial success is the right goal but let's compare biglaw to investment banking. Certainly a decade or two ago investment banking would have hands-down been the right career path to make a lot of money. These days a lot of bulge bracket Managing Directors are probably in the $1m-$3m range. However, the career risk they have is much greater than in biglaw. Biglaw firms while increasingly cut throat still doesn't compare to investment banking--most MD's careers are over by 50. If you're over 50 in investment banking you either made it to the very top (think top management of a major investment bank) or you've been pushed out working at a boutique where it's completely eat what you kill.

The chance of making MD is no better than making partner (perhaps worse), the time you get to stay MD vs stay partner is much worse, and then the market cycle driven layoffs are more intense than in law. A good typical biglaw partner can practice well into his/her 50s perhaps 60s and then collect on a pension payout for years. So the bankers might make a little more as associates, VPs, directors (% wise bigger difference but compared to making partner in biglaw or MD in investment banking the cumulative differences are probably not much more than a year or two of comp for an MD/partner), make MD in their mid 30s (perhaps a couple years earlier) and then flame out typically within 10 years or less.

Seems hard to believe. Would you rather be a senior banker at Goldman Sachs or a senior partner at Skadden, Cravath, etc? Do others really believe this?

I know, I thought that was weird too.

In terms of wealth, you're talking 10-20M (law) vs. 100 millions (GS).

How do you get to 100 millions at GS? Those were either pre-IPO partners. I don't think anyone at GS can get to 100s of millions unless you are senior management (i.e. top 10 perhaps). Your run of the mill Managing Director doesn't stand a chance.

Of course I am talking senior management. So are the people who are talking about senior management at law firms. Again it's a case of 10-20M vs. 100M.

Sure, if you are top 25 at GS you will probably be worth $100m+ (and get there in your late 40s and 50s) and compared to top 25 in biglaw that's a major advantage--my guess is $50m+ (probably get there in your 50s). Goldman has about 35k employees and 2k Managing Directors or ratio of 17.5:1. There are roughly 4k employees at Skadden Arps and 400 partners or 10:1 ratio. An MD title is roughly comparable to a partner title--at the junior level they are both considered "non-equity" in that GS also has a PMD (participating managing director) title at the highest level of which there are roughly 500 or so--comparable to the top 50 partners at Skadden perhaps.

My guess is your typical MD at GS is making $1m-$3m annually with a good sized chunk (perhaps at the higher end over 50%) of that in restricted stock that vests over time (so not immediately available). Given the ups & downs/layoff risks, the most likely significantly shorter career lifespan, lack of pension, etc the point is that being a partner at a biglaw firm is perhaps a better probability risk weighted career choice than investment banking. That is not something that most would believe...