Biglaw partner net worth?

[Anonymous]

Anonymous wrote:

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.

Thank you. I appreciate that and shouldn’t have snapped back like that. It’s not often I’m called “lucky” ha ha.

[Anonymous]

How much is a typical partner capital contribution?

[Anonymous]

I think it’s $30-35M NW at 50 for Kirkland tier equity partners.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

Thank you. I appreciate that and shouldn’t have snapped back like that. It’s not often I’m called “lucky” ha ha.

DP

I'm not a lawyer and I hear you. Decades of responsible decisions and hard work and some plonker calls you "lucky". I'm the same - scientist from No Name U who went to grad school without parental support. I saved, sent my kids to good private schools, put money in 529s, and am set to retire with $5M, plus health insurance if I choose to do so at 50 in a couple years. Honestly, I'm just going to put my hand up when the timing is right with layoff packages, so I can package out. I'm sure they will call that luck too - I call it planning.

[Anonymous]

Anonymous wrote:How much is a typical partner capital contribution?

It depends.

[Anonymous]

Anonymous wrote:I think it’s $30-35M NW at 50 for Kirkland tier equity partners.

Kirkland has the biggest disparity among equity partners of the top firms, so this will be very dependent on whether the partner is a big hitter or not. You have some folks in the 3-5 million per year range, so I doubt they have $30-35mm at 50. But then you have a few folks at 20 million per year so they're well above $35mm at 50.

[Anonymous]

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

Lawyers never stop working. Take it from the daughter and grand daughter of two judges who died on the bench.

[Anonymous]

I think the other big law compensation thread is a lot closer than these outliers making $4m for decades.

[Anonymous]

Oops, closer to reality.,

[Anonymous]

Anonymous wrote:I think the other big law compensation thread is a lot closer than these outliers making $4m for decades.

Didn't the other one say equity partners were making $3-4 million as only 4th year partners??? Or are you referring to even a different thread than that?

[Anonymous]

Anonymous wrote:

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.

Yeah there is gojng to be a difference between the person who made partner at age 32 or the one who made partner at 40 because they didn’t go straight through etc. all this varies a lot but I think tens of millions by 50 is not likely. Also agree with Po that the effective tax rate all in is pretty close to 50% when you consider state, local, fed plus things like SS, etc.

[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.

Ummmmm non-equity partner is not where the money is. Nope sorry 👎

[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.

You seem very defensive for someone secure in his choices. A lion does not concern himself with the opinion of the sheep.

[Anonymous]

DH is an equity partner (I work full time so don't start) and his equity buy in was financed by the firm that pays us back the interest. It's complicated but we weren't out any money to buy in. We've thought about paying it off early but there's really no point. Mid 40s, we try to keep our expenses low and our financial advisor says we'll be at about 30m at retirement.

[Anonymous]

Anonymous wrote:

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.

You seem very defensive for someone secure in his choices. A lion does not concern himself with the opinion of the sheep.

And that is why I expressed regret over this post. The one thing I am not insecure about is my decision to retire when I did, and the one thing I know is that nothing that I accomplished financial wise had anything to do with luck. So, yes, I agree with you. I was wrong.