Biglaw partner net worth?

[Anonymous]

You read a lot and there are lots of posts here about Biglaw partners routinely making millions of dollars a year.

I’m wondering what the typical net worth of someone in that position can expect to be at around age 50. Assets minus liabilities?

Wouldn’t it be tens upon tens of millions of dollars? Like lower level movie star rich at a minimum? And if that’s the case, why are they still working?

[Anonymous]

Because they don’t know anything else. They are addicted to working and will die when they retire.

[Anonymous]

It depends. If they're an equity partner their NW may fluctuate with the value of the firm, and they may have a second mortgage or other debt to fund their buy-in.

If a non-equity partner and have been a partner or at least senior associate for a while, and they have a reasonable number of kids and no divorce, their NW is probably pretty high. May dip a little during the college tuition years.

[Anonymous]

Anonymous wrote:It depends. If they're an equity partner their NW may fluctuate with the value of the firm, and they may have a second mortgage or other debt to fund their buy-in.

If a non-equity partner and have been a partner or at least senior associate for a while, and they have a reasonable number of kids and no divorce, their NW is probably pretty high. May dip a little during the college tuition years.

You don’t understand what an equity partner is.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It depends. If they're an equity partner their NW may fluctuate with the value of the firm, and they may have a second mortgage or other debt to fund their buy-in.

If a non-equity partner and have been a partner or at least senior associate for a while, and they have a reasonable number of kids and no divorce, their NW is probably pretty high. May dip a little during the college tuition years.

You don’t understand what an equity partner is.

DP. Why? The value of the firm reflects its earnings, and equity partners get a percentage share of the earnings that vary from year to year. Some firms require new equity partners to contribute a lump sum upon becoming partners; others just require equity partners to start contributing to a capital account.

A lot of equity partners at major law firms easily have net worths over $20 million by the time they are in their mid-50s.

[Anonymous]

This depends on a million factors, but my guess is most EPs approach or exceed $10m by 50. Most EPs at my firm make $2-4m/yr, but between taxes (top of fed and state brackets, plus another 1-3% in multiple states in which we do not reside) cuts that almost in half. Then there is a lot of keeping up with the Joneses, private school tuitions, multiple extravagant trips a year, etc. that I'm sure cuts everyone's savings down.

So while a very prudent/frugal EP could probably have $20m by 50s, my guess is most are floating around $10m.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It depends. If they're an equity partner their NW may fluctuate with the value of the firm, and they may have a second mortgage or other debt to fund their buy-in.

If a non-equity partner and have been a partner or at least senior associate for a while, and they have a reasonable number of kids and no divorce, their NW is probably pretty high. May dip a little during the college tuition years.

You don’t understand what an equity partner is.

DP. Why? The value of the firm reflects its earnings, and equity partners get a percentage share of the earnings that vary from year to year. Some firms require new equity partners to contribute a lump sum upon becoming partners; others just require equity partners to start contributing to a capital account.

A lot of equity partners at major law firms easily have net worths over $20 million by the time they are in their mid-50s.

Equity partners get their share of the firm profits at the end of each year. Yes, the firm profit will vary each year, but it is virtually guaranteed to be very large in big law.

Equity partners do have to “buy in“ to the firm, but in most instances the buy in —while a substantial amount for most people — is small compared to what the equity partner makes in profits each year.

On top of that, in most instances when an equity partner leaves the firm or retires the “buy in” — otherwise known as his or her capital contribution — is returned to them. That makes the buy in an asset when it comes to calculating net worth, not a liability.

There is a persistent myth on this website that equity partners are crippled buy in requirements. That is not the case at all. Any non-equity partner or associate would happily buy in to big law to become an equity partner.

[Anonymous]

Anonymous wrote:This depends on a million factors, but my guess is most EPs approach or exceed $10m by 50. Most EPs at my firm make $2-4m/yr, but between taxes (top of fed and state brackets, plus another 1-3% in multiple states in which we do not reside) cuts that almost in half. Then there is a lot of keeping up with the Joneses, private school tuitions, multiple extravagant trips a year, etc. that I'm sure cuts everyone's savings down.

So while a very prudent/frugal EP could probably have $20m by 50s, my guess is most are floating around $10m.

When you pay taxes in multiple states, much of what you pay is offset against your tax obligation in the state of your primary residence. It’s not 100% cumulative.

[Anonymous]

For the average equity partner? I would guess $10-12m at age 50. A lot of them spend a lot.

[Anonymous]

If all goes right, after spending a lot for many years (new cars, house in the $2.5m range, and private school), I will have about $8m at 50 and will retire. My partners that are still working after 50 seem to actually enjoy it or couldn't imagine themselves doing anything else.

[Anonymous]

Everything varies. When did the person make equity partner. Stops in the government or elsewhere could impact that. When did they go to law school? A lot of people now do not go until late 20s. If it took 12 years to make partner they could be 40 when they started. How quick did their practice take off. They could be doing quite well but making 1-2 million and spending it. And the practice pushes them to 2-5 million a year but not until 45 or older.


Partners often spend a lot. I would expect net worth of partners at top biglaw firms to be over 15 and maybe over 20 million by 60 not 50.

Why don’t they quit? For many they love it. For others they may need more money. Most of the retired biglaw partners I know do not downsize at retirement. They often keep spending level or increase spending.

[Anonymous]

Anonymous wrote:Everything varies. When did the person make equity partner. Stops in the government or elsewhere could impact that. When did they go to law school? A lot of people now do not go until late 20s. If it took 12 years to make partner they could be 40 when they started. How quick did their practice take off. They could be doing quite well but making 1-2 million and spending it. And the practice pushes them to 2-5 million a year but not until 45 or older.

Partners often spend a lot. I would expect net worth of partners at top biglaw firms to be over 15 and maybe over 20 million by 60 not 50.

Why don’t they quit? For many they love it. For others they may need more money. Most of the retired biglaw partners I know do not downsize at retirement. They often keep spending level or increase spending.

+1 . Also, does their spouse work? A lot of biglaw men have wives who are SAHM; of course, virtually all of the biglaw women have husbands who have their own careers. Even with a not so "big" job, a spouse can end up contributing a couple million to the retirement nest egg.
Spending after retirement does not go down, but often mortgages have been paid off and there is no private school tuition. College tuitions have been fully funded, so that was likely never an issue. Some retired big law attorneys do end up footing the bill for grandkids' tuition and paying for expensive large family vacations, though.
Regardless, as PP notes, there are a lot of variables.

[Anonymous]

Most of my EP friends actually took a pay cut for the first few yrs of partner vs the last 2 years of associate. Several also had to use most of their savings to buy in. Sure they had a good salary for the last few yrs as associate, but it was around then that their law school debt was paid off, so saving didn’t really accelerate until a couple of years in as a partner.
I never understand when people on here ask re retiring so early. I’m in finance, and there’s no way I could have slogged it out through the early years of 100 hour weeks if I didn’t deep down love the job and get a thrill out of working on certain deals, closing things, coming up with strategies, etc. It’s such a career of highs and lows bc so many amazing deals I’ve worked on never got over the finish line, so when things do, it’s thrilling. The longer I work, the easier things get bc of connections and past deal experience. It would be really hard to give all of that up and retire. I’ve never seen someone in law or finance solely for the money actually do well. They’re either not good enough at the job or they burn out quickly or burn bridges bc everyone can see right through them.

[Anonymous]

Anonymous wrote:Most of my EP friends actually took a pay cut for the first few yrs of partner vs the last 2 years of associate. Several also had to use most of their savings to buy in. Sure they had a good salary for the last few yrs as associate, but it was around then that their law school debt was paid off, so saving didn’t really accelerate until a couple of years in as a partner.
I never understand when people on here ask re retiring so early. I’m in finance, and there’s no way I could have slogged it out through the early years of 100 hour weeks if I didn’t deep down love the job and get a thrill out of working on certain deals, closing things, coming up with strategies, etc. It’s such a career of highs and lows bc so many amazing deals I’ve worked on never got over the finish line, so when things do, it’s thrilling. The longer I work, the easier things get bc of connections and past deal experience. It would be really hard to give all of that up and retire. I’ve never seen someone in law or finance solely for the money actually do well. They’re either not good enough at the job or they burn out quickly or burn bridges bc everyone can see right through them.

No, they didn’t “have to” use virtually all of their savings to buy in. Biglaw allows you either to buy in over time or helps arrange a buy in loan through a bank that’s more than happy to lend.

Again, this idea that buying in is so crippling is just not true. But it’s repeated so often on here that I’m starting to think it’s just wishful thinking — folks are hoping that in one way or another these Biglaw partners who made it when they didn’t aren’t raking in the money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Most of my EP friends actually took a pay cut for the first few yrs of partner vs the last 2 years of associate. Several also had to use most of their savings to buy in. Sure they had a good salary for the last few yrs as associate, but it was around then that their law school debt was paid off, so saving didn’t really accelerate until a couple of years in as a partner.
I never understand when people on here ask re retiring so early. I’m in finance, and there’s no way I could have slogged it out through the early years of 100 hour weeks if I didn’t deep down love the job and get a thrill out of working on certain deals, closing things, coming up with strategies, etc. It’s such a career of highs and lows bc so many amazing deals I’ve worked on never got over the finish line, so when things do, it’s thrilling. The longer I work, the easier things get bc of connections and past deal experience. It would be really hard to give all of that up and retire. I’ve never seen someone in law or finance solely for the money actually do well. They’re either not good enough at the job or they burn out quickly or burn bridges bc everyone can see right through them.

No, they didn’t “have to” use virtually all of their savings to buy in. Biglaw allows you either to buy in over time or helps arrange a buy in loan through a bank that’s more than happy to lend.

Again, this idea that buying in is so crippling is just not true. But it’s repeated so often on here that I’m starting to think it’s just wishful thinking — folks are hoping that in one way or another these Biglaw partners who made it when they didn’t aren’t raking in the money.

+1 - I'm not aware of any firm that doesn't let up-through-the-ranks partners buy in over 2-3 years via a reduction in their draw. Lateral partners are a different story, but IME their signing bonuses would cover the entire buy-in anyway.

But this is beside the point, because OP's question was about age 50. Even if there is a dip for a few years after you make partner in order to buy in, most 50 year olds (except those that spent time in government or worked for +4 years before law school) are beyond that. Also, their capital contribution arguably should be included in NW since it is returned 99% of the time. I'm not saying most 50 year olds have been able to save 10m yet, because I agree that private school, trips, social, etc. eat into savings significantly, but their inability to reach 10m would not be due to making a capital contribution.