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nealric wrote:

surely after a few years they could afford it but it wouldn't be pocket change

Mayyybe some bank would give someone making $1M a year a $6M mortgage (though I somewhat doubt it these days). But they would be leveraged to the hilt. When you consider the ratio of after tax income to the cost of the property that's like someone making $100k buying a $1M place.

nealric wrote:

Taxation isn't the obstacle you think, especially at the high end.

http://www.irs.gov/pub/irs-soi/07intop400.pdf

Biglaw partners do get hit with taxes particularly hard compared with corporate executives of similar income. Biglaw partners don't get stock options (more ordinary income, less capital gains), they have to pay 100% of payroll taxes, and they usually end up paying 100% of their health insurance premiums.

Again, what exactly can't one afford with $1-3 million a year--which is increasing well over the rate of inflation--and a modest rate of savings?

In NYC, where a large percentage of biglaw partners are, quite a lot actually. For example: this is what $6 Million gets you in the Upper East Side: --LinkRemoved--. A very nice place, to be sure, but not crazy extravagant. At 2,500 sq feet, people in the midwest burbs have houses the same size that cost under $200k. Someone making $1M a year couldn't afford it.

nealric wrote:

Taxation isn't the obstacle you think, especially at the high end.
In NYC, where a large percentage of biglaw partners are, quite a lot actually. For example: this is what $6 Million gets you in the Upper East Side: --LinkRemoved--. A very nice place, to be sure, but not crazy extravagant. At 2,500 sq feet, people in the midwest burbs have houses the same size that cost under $200k. Someone making $1M a year couldn't afford it.

2500 sq. ft on the UES not extravagant???? WTF is extravagant, then? Do you have to own a fucking island? How can you compare a ranch house in suburban Kansas City to a luxury building in the most lusted-after zip code in the country?

nealric wrote:

2500 sq. ft on the UES not extravagant???? WTF is extravagant, then? Do you have to own a fucking island? How can you compare a ranch house in suburban Kansas City to a luxury building in the most lusted-after zip code in the country?

It's all relative. A 600sq ft studio in Harlem is extravagant compared to a shack in Hati. But you have to admit that the family in KC is living in the same amount of space.

My main point is that even biglaw partners aren't to the "money is no object" level of wealth.

nealric wrote:

Taxation isn't the obstacle you think, especially at the high end.

http://www.irs.gov/pub/irs-soi/07intop400.pdf

Biglaw partners do get hit with taxes particularly hard compared with corporate executives of similar income. Biglaw partners don't get stock options (more ordinary income, less capital gains), they have to pay 100% of payroll taxes, and they usually end up paying 100% of their health insurance premiums.

Again, what exactly can't one afford with $1-3 million a year--which is increasing well over the rate of inflation--and a modest rate of savings?

In NYC, where a large percentage of biglaw partners are, quite a lot actually. For example: this is what $6 Million gets you in the Upper East Side: --LinkRemoved--. A very nice place, to be sure, but not crazy extravagant. At 2,500 sq feet, people in the midwest burbs have houses the same size that cost under $200k. Someone making $1M a year couldn't afford it.

BruceWayne wrote: Irony at its best. In fairness, outside of NYC and parts of California, most people making that kind of salary can essentially afford whatever they want that's within reason (ie not a personal island, private jet, a professional sports franchise etc.). When you think about it, it's really quite remarkable just how expensive NYC is. You're practically paying to breath in Manhattan.

If it weren't, people all over would forego swank downtown condos and instead opt for doublewide trailers in the sticks.

Irony at its best.

mho11 wrote:

mho11 wrote:Let's use John Edwards as an example. From his bio it appears during his law career that he was always part of a law firm. He was a plaintiff lawyer who managed to win several million dollars. Based on the amount he won it appears he earned a large percentage of the winnings that went to him rather than the firm. I don't quite understand how the earnings works out when in trial law and how much goes to the lawyer vs the firm.

Back to my previous post, please. Does anyone have an answer?

nealric wrote:

If it weren't, people all over would forego swank downtown condos and instead opt for doublewide trailers in the sticks.

A lot of people out in the burbs have no interest whatsoever in living in Manhattan. People can and do forgo swank downtown condos for a house with a yard.

After all, a given person with a given budget for a house can either buy a tiny city condo, or a big suburban house based on personal preferences, and all of everyone's aggregate preferences give us a market price

nealric wrote:

Taxation isn't the obstacle you think, especially at the high end.

http://www.irs.gov/pub/irs-soi/07intop400.pdf

Biglaw partners do get hit with taxes particularly hard compared with corporate executives of similar income. Biglaw partners don't get stock options (more ordinary income, less capital gains), they have to pay 100% of payroll taxes, and they usually end up paying 100% of their health insurance premiums.

Again, what exactly can't one afford with $1-3 million a year--which is increasing well over the rate of inflation--and a modest rate of savings?

In NYC, where a large percentage of biglaw partners are, quite a lot actually. For example: this is what $6 Million gets you in the Upper East Side: --LinkRemoved--. A very nice place, to be sure, but not crazy extravagant. At 2,500 sq feet, people in the midwest burbs have houses the same size that cost under $200k. Someone making $1M a year couldn't afford it.

nealric wrote:

After all, a given person with a given budget for a house can either buy a tiny city condo, or a big suburban house based on personal preferences, and all of everyone's aggregate preferences give us a market price

But in NYC the market is skewed. A partner who works 60-70 hour weeks in midtown can't really choose a big suburban house. There isn't enough time in the day for them to spend 3 hours commuting. NYC has a disproportionate number of high-income people who need to live in a very small geographic area in order to make that income.

A thousand more square feet, less than half the price, and right next to a big fucking lake.

rayiner wrote:

nealric wrote:

Taxation isn't the obstacle you think, especially at the high end.

http://www.irs.gov/pub/irs-soi/07intop400.pdf

Biglaw partners do get hit with taxes particularly hard compared with corporate executives of similar income. Biglaw partners don't get stock options (more ordinary income, less capital gains), they have to pay 100% of payroll taxes, and they usually end up paying 100% of their health insurance premiums.

Again, what exactly can't one afford with $1-3 million a year--which is increasing well over the rate of inflation--and a modest rate of savings?

In NYC, where a large percentage of biglaw partners are, quite a lot actually. For example: this is what $6 Million gets you in the Upper East Side: --LinkRemoved--. A very nice place, to be sure, but not crazy extravagant. At 2,500 sq feet, people in the midwest burbs have houses the same size that cost under $200k. Someone making $1M a year couldn't afford it.

NYC is shit, pure shit.

This is what $2.7m buys you in Chicago: http://www.condo.com/PropertyDetails.aspx?ID=7598595

A thousand more square feet, less than half the price, and right next to a big fucking lake.

--ImageRemoved--

--ImageRemoved--

Kirkland, Sidley, etc, pay NYC lockstep to associates and have $1.5m+ PPP.

Hell if you're a lowly associate you can afford this:

--ImageRemoved--

Yes, your view includes both the John Hancock building and the big fucking lake. For $525k. Big. fucking. lake.

ResolutePear wrote:

A thousand more square feet, less than half the price, and right next to a big fucking lake.

And 3000 miles away from your job in NYC.

rayiner wrote:

ResolutePear wrote:

A thousand more square feet, less than half the price, and right next to a big fucking lake.

And 3000 miles away from your job in NYC.

Nah. Just a mile and a half from your $2.5m PPP job at Kirkland.

nealric wrote:

After all, a given person with a given budget for a house can either buy a tiny city condo, or a big suburban house based on personal preferences, and all of everyone's aggregate preferences give us a market price

But in NYC the market is skewed. A partner who works 60-70 hour weeks in midtown can't really choose a big suburban house. There isn't enough time in the day for them to spend 3 hours commuting. NYC has a disproportionate number of high-income people who need to live in a very small geographic area in order to make that income.

Gawd I wish I had Chicago ties.

ResolutePear wrote:^^ Yeah, but it's in Texas.

^^ Yeah, but it's in Texas.

nealric wrote:

If it weren't, people all over would forego swank downtown condos and instead opt for doublewide trailers in the sticks.

A lot of people out in the burbs have no interest whatsoever in living in Manhattan. People can and do forgo swank downtown condos for a house with a yard.

Irony at its best.

Not really. The number of biglaw partners making $1M+ is tiny outside of NYC. A lot of the NYC partners making that kind of money wouldn't be making it outside of NYC. That's the issue- biglaw is centered around high COL cities. You don't make $1M in biglaw living in St. Louis.

That's not what I meant by irony. I meant it's ironic that the city where most posters want to end up and make six figures+ is a city where making six figures plus isn't really a big deal. In addition, this notion that there are very few partners outside of NYC making big bucks is a prominent myth perpetuated on TLS. In many of the large metro areas in the US you can find law firm partners who make large sums of money. There are plenty of them in DC, Chicago, LA, Atlanta, Dallas, Houston, Miami etc. Living in Chicago or Atlanta as a law firm partner gives you a much, much higher standard of living than doing so in NYC.