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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=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. [/quote]

You don’t understand what an equity partner is.  [/quote]

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.  [/quote]

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.[/quote]

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). [/quote]

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