Yes, tiny violin - did anyone else struggle first years of law partnership?

[Anonymous]

Anonymous wrote:OP it sounds like you’re spending more than you earn and didn’t ask any detailed questions about compensation in your new job.

What do you want? We can surmise that the house is an expensive house in a good school district. Send one or both kids to public school for a few years. Or refinance your house. Or apply for financial aid. Whatever.

Well, if you read my actual post, I asked if anyone else struggled at first and when it changed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP it sounds like you’re spending more than you earn and didn’t ask any detailed questions about compensation in your new job.

What do you want? We can surmise that the house is an expensive house in a good school district. Send one or both kids to public school for a few years. Or refinance your house. Or apply for financial aid. Whatever.

Well, if you read my actual post, I asked if anyone else struggled at first and when it changed.

Again, OP, can you confirm if you’re really talking about “overhead?”

[Anonymous]

OP, all of these answers are going to be firm and practice group dependant, as well as a function of the economy. No one here is going to be able to tell you. He should ask his peers a few years ahead of him.

Personally, I'd pull the kids from private. They'll be fine in public school for a few years.

You should also consider stepping back up to FT work. You can't afford to be PT right now.

You can always switch back if his pay increases, but don't spend yourself into a hole. What if the economy tanks? He'll be the first partner walked out (and yes, that does happen).

[Anonymous]

Anonymous wrote:OP, all of these answers are going to be firm and practice group dependant, as well as a function of the economy. No one here is going to be able to tell you. He should ask his peers a few years ahead of him.

Personally, I'd pull the kids from private. They'll be fine in public school for a few years.

You should also consider stepping back up to FT work. You can't afford to be PT right now.

You can always switch back if his pay increases, but don't spend yourself into a hole. What if the economy tanks? He'll be the first partner walked out (and yes, that does happen).

Just stop. None of this is necessary. Honestly you sound jealous.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, all of these answers are going to be firm and practice group dependant, as well as a function of the economy. No one here is going to be able to tell you. He should ask his peers a few years ahead of him.

Personally, I'd pull the kids from private. They'll be fine in public school for a few years.

You should also consider stepping back up to FT work. You can't afford to be PT right now.

You can always switch back if his pay increases, but don't spend yourself into a hole. What if the economy tanks? He'll be the first partner walked out (and yes, that does happen).

Just stop. None of this is necessary. Honestly you sound jealous.

Huh? Stop what? I tried to help OP. This was my first post on this thread and I'm an attorney. I experienced the 2008 recession at a big firm, so I'm probably more conservative than most, but it doesn't sound like OP can keep going the way she is without going into a financial hole. I personally wouldn't do that as I always want a cushion but, as I said, I'm also financially cautious having been at a firm in bad times.

(And I'm certainly not jealous of $240k a year in take home. That sounds tight and stressful. I've always thought that junior partners have the worst deal.)

[Anonymous]

Your tax withholding sounds really high for that income. I bet it is incorrect.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP it sounds like you’re spending more than you earn and didn’t ask any detailed questions about compensation in your new job.

What do you want? We can surmise that the house is an expensive house in a good school district. Send one or both kids to public school for a few years. Or refinance your house. Or apply for financial aid. Whatever.

Well, if you read my actual post, I asked if anyone else struggled at first and when it changed.

Most people were coming from being highly compensated senior associates and non-equity partners and had, you know, savings before doubling down on the mansion and private school. Its not fair that people can be this stupid and still be rich.

[Anonymous]

This happened to us when DH became a partner (I work too before anyone comes for me). Income on paper was the same, but our health insurance doubled, our tax situation changed, our forced retirement went up and we had to make yearly capital contributions. So our income actually went down quite a bit. I won't disgust you all with the figures but we break even, i.e. we aren't putting in any pools or fully funding 529s right now. We have a nanny for three kids under four so that will be a big expense lifted in a few years. Right now we just don't travel and watch our spending with the hope that in a few years we can build up savings again.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP it sounds like you’re spending more than you earn and didn’t ask any detailed questions about compensation in your new job.

What do you want? We can surmise that the house is an expensive house in a good school district. Send one or both kids to public school for a few years. Or refinance your house. Or apply for financial aid. Whatever.

Well, if you read my actual post, I asked if anyone else struggled at first and when it changed.

Most people were coming from being highly compensated senior associates and non-equity partners and had, you know, savings before doubling down on the mansion and private school. Its not fair that people can be this stupid and still be rich.

Oh, good lord. We saved and saved to buy a home. Then we bought the home. So we didn’t have much more in savings. We also have another income. If you’re not this rich, I’m going to assume you’re even more stupid. We do not have a “mansion”. We have one kid with special needs that requires private school. Most people don’t make, you know, wild assumptions when asked a simple question unless they are, you know, dicks.

[Anonymous]

Anonymous wrote:Your tax withholding sounds really high for that income. I bet it is incorrect.

Seems about right to me - maybe a little high. OP likely has to pay taxes in 15+ jurisdictions, plus UK and other countries.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The way we did it was taking a year or two, really cutting back on spending and increasing saving, and getting ahead of it. There are lots of possible permutations based on comp structure, but unfortunately, they all come down to this. It stinks for that year, OP, but it's a lot less stressful once you do it.

Yes, but as I said in my earlier posts, that’s not an option as the expenses are fixed. They cannot be altered.

This is true, private school tuition is essential and houses can’t be sold.

[Anonymous]

Get a credit line. I'm sure the firm has relationships with banks that have favorable programs/rates. And for the penny-pinchers reading this who just flipped out, this is not to add leverage or debt, this is to deal with a cash flow timing issue since OP will receive the cash at some point (uaually Nov-Dec in a huge distrubtion).

So use the credit for mothly expenses and use the distributions (and what's left of the tax distribs) to pay off the line. That's what we do. I have never had an outstanding balance for more than a month this way, and the one time I did I paid a bit of interest on it, but that was worth the ability to purchase what we needed during the year.

You can do it, but it takes a different cash and spending mindset. I suspect that most people on this board receive a W-2 and don't have to think about it that way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The way we did it was taking a year or two, really cutting back on spending and increasing saving, and getting ahead of it. There are lots of possible permutations based on comp structure, but unfortunately, they all come down to this. It stinks for that year, OP, but it's a lot less stressful once you do it.

Yes, but as I said in my earlier posts, that’s not an option as the expenses are fixed. They cannot be altered.

This is true, private school tuition is essential and houses can’t be sold.

OP, I'm the one who started this subthread, and the latest response wasn't me.

If you can't pare back temporarily, you can stick to a firm budget, which will at least mean you tread water, and not have to bite into any of your year-end comp. Alao, try to bank increases over the next couple of years. Finally, though this won't make as much a difference, if your spouse can either go back full time and get a job that supplies benefits, that'll help - I can't imagine what your health insurance premiums are.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The way we did it was taking a year or two, really cutting back on spending and increasing saving, and getting ahead of it. There are lots of possible permutations based on comp structure, but unfortunately, they all come down to this. It stinks for that year, OP, but it's a lot less stressful once you do it.

Yes, but as I said in my earlier posts, that’s not an option as the expenses are fixed. They cannot be altered.

This is true, private school tuition is essential and houses can’t be sold.

We would have to buy another home and I don’t know if you’ve noticed, but it’s not an ideal time to be a buyer. And private schools have contracts. You can’t just leave.

[Anonymous]

Anonymous wrote:Are you the spouse or what? Because you’re not being very clear.

If the $130k being taken out each year is actually overhead and not a capital contribution then the partners aren’t making $800k a year - they’re making $670k. Such bullshit, probably designed to make them look better for AmLaw purposes.

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