Biglaw partner net worth?

[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.

This is probably about right, but many keep working until their 70s and beyond and then really rake it in without a ton of expenses.

[Anonymous]

Sigh... I mean, am I the only person here who remembers 2008?

[Anonymous]

Anonymous wrote:

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.

This is probably about right, but many keep working until their 70s and beyond and then really rake it in without a ton of expenses.

Most Biglaw firms don’t let partners remain equity earners in their 70s

[Anonymous]

Anonymous wrote:Sigh... I mean, am I the only person here who remembers 2008?

Biglaw partners still made big money in 2008. Less big maybe but still big.

[Anonymous]

I am an equity partner at what's considered a top firm. I make around $4 million per year (though that has risen steadily over the years so it hasn't always been that high) and am in the bottom half of partner comp at my firm (I think about 60-65% of the other partners at my firm make more than I do). I am 49 years old. My spouse and I have a combined net worth of ~18 million. Spouse works as well and makes around 400k per year so that is obviously great, too.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sigh... I mean, am I the only person here who remembers 2008?

Biglaw partners still made big money in 2008. Less big maybe but still big.

How did it shake out for Heller?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sigh... I mean, am I the only person here who remembers 2008?

Biglaw partners still made big money in 2008. Less big maybe but still big.

How did it shake out for Heller?

The overwhelming majority of biglaw firms did just fine. Heller was a outlier.

[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.

I am a biglaw partner and do it solely for the money. My closest friends at the firm are the same. We all do pretty well. Not everyone at the firm thinks like that, of course, and many (especially those who work until 70) love it. I will be long gone by 70.

[Anonymous]

Early Retired Biglaw partner here. I made equity in a well known DC firm 20 years ago in my early 40s and retired a decade later in my early 50s. My net worth when I made partner was probably in the mid six figures and consistently entirely of home equity and my 401k. My pay started at about 1/5 of what the average partner at my firm makes today and was about 1/3 of what they make today when I left. I never made $1 million in a year but came close near the end. And, yes, I was a partner in 2008 -- my 401k dropped far more than my compensation did that year.

During my ten years as an equity partner I paid lots and lots of college tuition and for very nice weddings and family vacations out of cash flow (no 529s, etc). Other than that we were not extravagant. We did not upsize on houses or cars, for example. And kids went to public schools.

I had a net worth of about 4 million when I quit, and a decade later (not working at all), we're more than double that at 8 million plus. Our standard of living has actually gone up as well, since the college and wedding expenses -- and retirement contributions -- are behind us.

If I was at 4 million a decade ago making less than half what partners are mking now and have $8 million now just from index fund investing and not earning any money at all from a job I cannot even imagine how much biglaw partners at 50 have today. But it is a LOT.

Oh, I paid my capital over time when working and it was all returned to me when I left. That's how I funded the first several years of my early retirement, in fact.

[Anonymous]

Early retired partner here. Sorry for the typos above. I'm in a hurry!

[Anonymous]

Anonymous wrote:Early Retired Biglaw partner here. I made equity in a well known DC firm 20 years ago in my early 40s and retired a decade later in my early 50s. My net worth when I made partner was probably in the mid six figures and consistently entirely of home equity and my 401k. My pay started at about 1/5 of what the average partner at my firm makes today and was about 1/3 of what they make today when I left. I never made $1 million in a year but came close near the end. And, yes, I was a partner in 2008 -- my 401k dropped far more than my compensation did that year.

During my ten years as an equity partner I paid lots and lots of college tuition and for very nice weddings and family vacations out of cash flow (no 529s, etc). Other than that we were not extravagant. We did not upsize on houses or cars, for example. And kids went to public schools.

I had a net worth of about 4 million when I quit, and a decade later (not working at all), we're more than double that at 8 million plus. Our standard of living has actually gone up as well, since the college and wedding expenses -- and retirement contributions -- are behind us.

If I was at 4 million a decade ago making less than half what partners are mking now and have $8 million now just from index fund investing and not earning any money at all from a job I cannot even imagine how much biglaw partners at 50 have today. But it is a LOT.

Oh, I paid my capital over time when working and it was all returned to me when I left. That's how I funded the first several years of my early retirement, in fact.

I knew you would post. You happened to retire prior to a huge stock market runup that may or may not be the case for current or future retirees. If I recall correctly, you also have maintained access to health insurance at your firm, which is not typical and a huge savings for you. You got very very lucky, which you don't like you acknowledge.

[Anonymous]

Anonymous wrote:

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.

Agree. Also the buy in is cash in/cash out. Sme firms pay interest on capital along the way, but that is really just money that otherwise would have been paid in comp. The value of the capital contribution does not grow beyond the cash contributed (which is after tax cash).

[Anonymous]

Anonymous wrote:

Anonymous wrote:Early Retired Biglaw partner here. I made equity in a well known DC firm 20 years ago in my early 40s and retired a decade later in my early 50s. My net worth when I made partner was probably in the mid six figures and consistently entirely of home equity and my 401k. My pay started at about 1/5 of what the average partner at my firm makes today and was about 1/3 of what they make today when I left. I never made $1 million in a year but came close near the end. And, yes, I was a partner in 2008 -- my 401k dropped far more than my compensation did that year.

During my ten years as an equity partner I paid lots and lots of college tuition and for very nice weddings and family vacations out of cash flow (no 529s, etc). Other than that we were not extravagant. We did not upsize on houses or cars, for example. And kids went to public schools.

I had a net worth of about 4 million when I quit, and a decade later (not working at all), we're more than double that at 8 million plus. Our standard of living has actually gone up as well, since the college and wedding expenses -- and retirement contributions -- are behind us.

If I was at 4 million a decade ago making less than half what partners are mking now and have $8 million now just from index fund investing and not earning any money at all from a job I cannot even imagine how much biglaw partners at 50 have today. But it is a LOT.

Oh, I paid my capital over time when working and it was all returned to me when I left. That's how I funded the first several years of my early retirement, in fact.

I knew you would post. You happened to retire prior to a huge stock market runup that may or may not be the case for current or future retirees. If I recall correctly, you also have maintained access to health insurance at your firm, which is not typical and a huge savings for you. You got very very lucky, which you don't like you acknowledge.

Excuse me? 2008 happened right smack in the middle of my tenure as an equity partner and my retirement accounts dropped in value by 50 percent — and as I said that and some home equity was literally all I had. So when someone says “remember 2008” I can say yes, I sure do.

As for health insurance, yes my firm covered it and still does, with me paying the full premium, but anyone who thinks that someone with millions of dollars in net worth — which most Biglaw equity partners in the 50s should be — can’t afford health insurance not provided by their employer is mistaken. It’s little more than a drop in the bucket for folks at that level even if it’s $5000 a month, which it isn’t.

But ok. I came from nothing, went to a non-elite law school, worked hard for a long time, took forever to make partner, made less than virtually anyone else at my firm, was careful with my money, and managed to retire early and still do well. All because I was “lucky.” 2008 didn’t happen to me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

Agree. Also the buy in is cash in/cash out. Sme firms pay interest on capital along the way, but that is really just money that otherwise would have been paid in comp. The value of the capital contribution does not grow beyond the cash contributed (which is after tax cash).

Early Retired here again. Yes this is exactly right. I viewed my buy in as forced savings. I knew I’d be getting it back and took that into account in my early retirement planning. And as you note you pay taxes on the buy in the year that the money is earned, so when you get it back it’s tax “free.” My capital contribution basically funded the first four years or so of my retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Early Retired Biglaw partner here. I made equity in a well known DC firm 20 years ago in my early 40s and retired a decade later in my early 50s. My net worth when I made partner was probably in the mid six figures and consistently entirely of home equity and my 401k. My pay started at about 1/5 of what the average partner at my firm makes today and was about 1/3 of what they make today when I left. I never made $1 million in a year but came close near the end. And, yes, I was a partner in 2008 -- my 401k dropped far more than my compensation did that year.

During my ten years as an equity partner I paid lots and lots of college tuition and for very nice weddings and family vacations out of cash flow (no 529s, etc). Other than that we were not extravagant. We did not upsize on houses or cars, for example. And kids went to public schools.

I had a net worth of about 4 million when I quit, and a decade later (not working at all), we're more than double that at 8 million plus. Our standard of living has actually gone up as well, since the college and wedding expenses -- and retirement contributions -- are behind us.

If I was at 4 million a decade ago making less than half what partners are mking now and have $8 million now just from index fund investing and not earning any money at all from a job I cannot even imagine how much biglaw partners at 50 have today. But it is a LOT.

Oh, I paid my capital over time when working and it was all returned to me when I left. That's how I funded the first several years of my early retirement, in fact.

I knew you would post. You happened to retire prior to a huge stock market runup that may or may not be the case for current or future retirees. If I recall correctly, you also have maintained access to health insurance at your firm, which is not typical and a huge savings for you. You got very very lucky, which you don't like you acknowledge.

Excuse me? 2008 happened right smack in the middle of my tenure as an equity partner and my retirement accounts dropped in value by 50 percent — and as I said that and some home equity was literally all I had. So when someone says “remember 2008” I can say yes, I sure do.

As for health insurance, yes my firm covered it and still does, with me paying the full premium, but anyone who thinks that someone with millions of dollars in net worth — which most Biglaw equity partners in the 50s should be — can’t afford health insurance not provided by their employer is mistaken. It’s little more than a drop in the bucket for folks at that level even if it’s $5000 a month, which it isn’t.

But ok. I came from nothing, went to a non-elite law school, worked hard for a long time, took forever to make partner, made less than virtually anyone else at my firm, was careful with my money, and managed to retire early and still do well. All because I was “lucky.” 2008 didn’t happen to me.

NP here. Retired Partner, and I always enjoy your posts and perspective.