BigLaw partner pay has ‘grown unbelievably,’ putting top lawyers ahead of investment bankers
Lawyer Pay
BigLaw partner pay has ‘grown unbelievably,’ putting top lawyers ahead of investment bankers
June 28, 2023, 9:30 am CDT
“Things have changed,” legal recruiter Mark Rosen told the Wall Street Journal. “Lawyer compensation has grown unbelievably.” Image from Shutterstock.
Fat paychecks taken home by top BigLaw partners are outpacing earnings by investment bankers.
The Wall Street Journal has the story.
“While bankers used to make multiples of what lawyers did, the lawyers have been zooming ahead, thanks to stagnant banker pay for all but the very top performers and changing dynamics at law firms,” the article reports.
The article says equity partners at top firms can make around $3 million or more per year, which is more than triple their earnings two decades ago. And some top partners are earning more than $15 million at firms that include Wachtell, Lipton, Rosen & Katz; Kirkland & Ellis; and Paul, Weiss, Rifkind, Wharton & Garrison.
“Things have changed,” legal recruiter Mark Rosen told the Wall Street Journal. “Lawyer compensation has grown unbelievably.”
The Wall Street Journal cites an analysis by the recruiting firm Bay Street Advisors, which found that the average managing director at a top 20 investment bank not leading a group made $1.9 million per year over the past three years. The figure was the same in 2007.
The article cites several reasons for ballooning paychecks for equity partners. They are getting “an outsize amount of work from the rise of private equity,” and they are working closely with corporate executives on issues such as regulations and succession planning. Another factor at play is the abandonment of lockstep compensation at top firms, leading to bidding wars for top talent.
Kirkland & Ellis has offered some lawyers compensation that could be worth $20 million or more per year for the first few years, according to the article. Yet the recruited lawyers can bring in $100 million or more in avenue revenue, according to Rosen.
Investment banker pay is stagnating, on the other hand, because of “pressure from regulators, increasing expenses and a move toward selling big banks’ brand names, rather than individuals,” the article reports.
