Partner @ Law Firms - Unanticipated Expenses/Income or Disappointed with Starting Compensation

[Anonymous]

This is really helpful info, thanks!

[Anonymous]

Another lawyer here who knows that HR would definitely not have this information.

[Anonymous]

Anonymous wrote:I remember years ago my office was next to a new income partner. He spoke so loudly that I could hear every conversation. He had multiple conversations with senior (equity) partners about how he was taking a pay cut to become a partner. Apparently, one of their counter arguments was that they, as equity partners, were responsible for the lease. So new income partner would tell them he'd be happy to sign the lease. He ultimately left for another firm bc of comp.

Which sounds fine until the firm collapses. Most don't, of course, but just ask those partners who are part of the diaspora of failed firms and are still liable under old leases.

[Anonymous]

Sounds like your general question is about budgeting. I am in a similar situation, in that I get income from last year's profits, paid only twice a year (as dividends), from my company. We basically keep a really big cushion and ensure our expenses stay under that. For new projects, like re-doing a room in our house, we run cashflow numbers projected out for a year to make sure we can pull it off.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This article is absurd. These big-time lawyers don't ask questions? They're all boo-hoo'ing about how they weren't told certain things, but - who accepts a job offer at any level without understanding how their compensation is offered/affected. Here's one of my favorite quotes:

“I wish I’d have known that my in­come wouldn’t grow any more than it did, but nobody said anything,” says “Sue,” who became a nonequity partner at a midsize Boston firm in 2006. “I’d have had the same increase if I’d have remained an associate.”

Why didn't you ask? Boo hoo, fat cats.

This makes BigLaw partners look like even bigger jackasses than many already think they are.

You are not informed about the compensation package prior to accepting the offer so what are you talking about? At most firms you work your butt off for 7-10 years and then are up and out (eligible, but not offered) or you are eligible and invited to become a partner and THEN you learn how the partnership operates and how compensation works.

Sorry, don't buy it. There's no one in HR that can be asked? No one who's already a partner, assuming one would have built relationships over the 7-10 years you mention? This is all a load of crap and even more fuel for the 'BigLaw lawyers are overpaid paper pushers' argument.

Not the PP, but, to answer you...you don't know jack about how firms operate. NO, HR won't tell you what you'll be offered, they probably don't even know. And no, most associates can't ask how much they will be offered in advance, it would make them look bad because 1) partners don't like to answer questions about their compensation and 2) associates should never appear to assume that they will make partner. It's the way it is.

I worked in HR at Biglaw and I can tell you that we knew jack about shareholder compensation. I knew the salary and bonuses of every associate and special counsel but we had a single person who handled shareholder compensation in our main office and I guarantee she wasn't chatting with associates about it.

[Anonymous]

It blows my mind how the major legal minds ofcthis generation operate under such a wholly dysfunctional set of "rules." not knowing comp before taking a job? One person in the company who may or may not have info? None of these companies could pass an audit under these conditions - yet clients pay ridiculous amounts for their services?

[Anonymous]

Indeed. My father was sr. partner of a small/med. firm for many years and told me yrs. ago he didn't understand associates' desire to be partners come hell or high water, since at times the partners got paid less than the associates.

The article is a big reason among many that I steered clear of BigLaw firms.

You have to be crazy IMO to go for the brass ring and not even know what the partnership agreement says. It's nuts.

[Anonymous]

To those of you questioning how anyone can take a job without knowing the comp -- let's just say that biglaw operates on the same business model now as it did a 100 years ago and there is no desire to evolve. At my firm, partnership is the brass ring -- if you dare question anything about it (esp. the money), you are branded as not wanting it "enough." In the opinion of the senior partners, the work, life and prestige is so awesome that you should want it even if they pay you 100k.

As for asking partners that you are close with, at my firm, the majority don't tell the truth. There are mid level (age 40s) partners who are totally insecure and need to justify their life choices who have said "no partner in the firm makes less than $x." I know junior partners who say "I made less than the senior associates this year," which would be $x-$300,000. Clearly someone is not telling the truth. Frankly, as business has slowed across the industry, I don't know if comp is what it used to be but most don't want to admit that since it is the brass ring; junior partners at many firms are responsible for a lot of overhead, which has to push their comp down.

[Anonymous]

Anonymous wrote:Sounds like your general question is about budgeting. I am in a similar situation, in that I get income from last year's profits, paid only twice a year (as dividends), from my company. We basically keep a really big cushion and ensure our expenses stay under that. For new projects, like re-doing a room in our house, we run cashflow numbers projected out for a year to make sure we can pull it off.

OP here. Yes, you are right PP. If offered to buy into the partnership, then I would accept the offer. I am always budgeting to the very penny and the prospect of being paid in a different manner and less than what I am accustomed to is unsettling. Let's say you become partner as of January 1st, then when in most cases did you receive income? Did you receive a reduced salary or income than you received as a mid-level associate? Does 30% less salary sound accurate? Do you advise partner prospects to aggressively save now? Has anyone left BigLaw because you were dissatisfied with the partnership compensation within the first three years of becoming a partner? Also what about the capital contribution/loan to buy into the partnership? How does your 401k contribution work? The gist of my question is for those who became partner - what financial advice would you give partner prospects?

[Anonymous]

bump

[Anonymous]

LOL, much better to make $230K a year for 40 hours of work in house.

[Anonymous]

Ya know, I agree that associates don't know the ins and outs of partner compensation, but OP seems particularly clueless about how law firms operate - a first-year, perhaps, or possibly just a troll. Most definitely NOT someone who is on the cusp of partnership.

[Anonymous]

Anonymous wrote:Ya know, I agree that associates don't know the ins and outs of partner compensation, but OP seems particularly clueless about how law firms operate - a first-year, perhaps, or possibly just a troll. Most definitely NOT someone who is on the cusp of partnership.

Do you care to enlighten the "first-year" or "troll" with your wisdom and knowledge?

[Anonymous]

Exactly PP, that was the point of the thread.lol Sounds like that poster has little info to offer, which confirms what LLs have stated.

[Anonymous]

I have no pity for lawyers or psychologists/psychiatrists.

Eliminate the middle person, and our lives would be better.