Qualified per-hour pay rankings?

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Monochromatic Oeuvre
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Qualified per-hour pay rankings?

Postby Monochromatic Oeuvre » Sun May 26, 2013 7:52 pm

So first off, I apologize if this data is obvious or sitting right in front of me--I wouldn't really know where to find it. If someone could direct me, that would be great.

I'm looking for first-year associate total compensation (salary+bonus) for as many Biglaw firms as possible, qualified for both the total tax burden of the municipality and its cost of living, on a per-hour basis. The NALP Buying Power stuff is useful, but it doesn't account for bonuses/firms not paying market rate, or for hours worked.

For example, suppose I'm a 0L that reads Wachtell pays $250k and Bickel and Brewer pays $185k. If I leap to Wachtell wanting just because I want to make it rain, I've failed to consider:

1. 5% income difference between NYC and Dallas on state and local tax rates
2. Marginal federal rate of 33% instead of 28% on each dollar over $183k
3. NYC has twice the cost of living of Dallas
4. B&B associates work probably 10 fewer hours a week than Wachtell associates

So $250k at Wachtell divided by a 40 percent burden is $150k. I live Lifestyle X, which costs $100k in NYC, leaving me with $50,000/3500 hours = $14.29 disposable per hour worked
And $185k at Bickel divided by a 35 percent burden is $2300 is $120k. Lifestyle X only costs $50k in Dallas, leaving with $70,000/3000 hours = $23.33 disposable per hour worked

So what originally looked like a big Wachtell outpaying Bickel by 33% is actually, when practical measures are taken into account, Bickel outpaying Wachtell by 60%.

This is obviously an extreme example, but it would be very helpful if data that took all of this into account were presented. Again, sorry if it's right in front of me and I'm missing it, but could anyone direct me to this? Thanks.

rad lulz
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Re: Qualified per-hour pay rankings?

Postby rad lulz » Sun May 26, 2013 8:55 pm


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thesealocust
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Re: Qualified per-hour pay rankings?

Postby thesealocust » Sun May 26, 2013 11:10 pm

The components of your metric are all available and worthy of consideration, but your metric itself is retarded and would suggest you should turn down a clerkship with judge Kozinski and become a plumber in Mississippi.

Also, realize that your satisfaction with your life is going to be a matter of where you live, what you do, who you do it for, and how much time you spend doing it - not how much you get for it per hour. Somebody who loves Chicago with an interest in corporate isn't going to be happy banking a slightly better hourly wage doing oil & gas litigation in Dallas.

TooOld4This
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Re: Qualified per-hour pay rankings?

Postby TooOld4This » Mon May 27, 2013 9:17 am

thesealocust wrote:The components of your metric are all available and worthy of consideration, but your metric itself is retarded and would suggest you should turn down a clerkship with judge Kozinski and become a plumber in Mississippi.

Also, realize that your satisfaction with your life is going to be a matter of where you live, what you do, who you do it for, and how much time you spend doing it - not how much you get for it per hour. Somebody who loves Chicago with an interest in corporate isn't going to be happy banking a slightly better hourly wage doing oil & gas litigation in Dallas.


Since many associates are swayed by salary, I would hardly call the metric "retarded."

Knowing your effective pay rate is an important input, since you are, quite literally putting a dollar value on your time. Once you know what that rate is, you can make more informed decisions about location (factoring in whether your preference is likely to be temporary or life long), practice area, etc. Things that might matter to you in the abstract (practice area, for example) might not carry as much weight when you really look at the salary/hours trade off.

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Re: Qualified per-hour pay rankings?

Postby dailygrind » Mon May 27, 2013 9:54 am


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JamMasterJ
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Re: Qualified per-hour pay rankings?

Postby JamMasterJ » Mon May 27, 2013 10:44 am

TooOld4This wrote:
thesealocust wrote:The components of your metric are all available and worthy of consideration, but your metric itself is retarded and would suggest you should turn down a clerkship with judge Kozinski and become a plumber in Mississippi.

Also, realize that your satisfaction with your life is going to be a matter of where you live, what you do, who you do it for, and how much time you spend doing it - not how much you get for it per hour. Somebody who loves Chicago with an interest in corporate isn't going to be happy banking a slightly better hourly wage doing oil & gas litigation in Dallas.


Since many associates are swayed by salary, I would hardly call the metric "retarded."

Knowing your effective pay rate is an important input, since you are, quite literally putting a dollar value on your time. Once you know what that rate is, you can make more informed decisions about location (factoring in whether your preference is likely to be temporary or life long), practice area, etc. Things that might matter to you in the abstract (practice area, for example) might not carry as much weight when you really look at the salary/hours trade off.

I think being swayed by an extra 20K in an NY corporate A v. NY corporate B situation is a bit different than Wachtell v. BB Texas though.

OP, If I were you though, there are many numbers that you're not really looking at. The one constant, for instance, is your student loan number (assuming we're pretending you're coming from the same school). For that example (and I'm going to a more extreme differential), Wachtell 250K allows you to pay off a bigger chunk than a much lower salary at a much lower-COL city. You should also note that COL for someone who plans on [img]living[/img] off 100k/year in ANY city is a different calculus than those by whom the metric is calculated - 100K/yr requires (unless you need a 2 Br in Tribeca) more travelling, shopping etc (costs that aren't as well displayed in a COL calculator as the basics).

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thesealocust
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Re: Qualified per-hour pay rankings?

Postby thesealocust » Mon May 27, 2013 12:04 pm

(braces himself for this thread becoming yet another cost of living disaster debate)

Something else worth pointing out is that first year compensation and career trajectory/compensation are materially different. SOMEBODY from the class of 2014 is going to make partner at the 2 to 3 million+ PPP firms headquartered in major cities, and the people that don't at least might have more highly compensated career trajectories on average.

It's hard to even speak in averages, and everybody gets their own result as opposed to the average result, but the lock-step $160,000 entry level salary does not hold up over a career span, and as such it's short sighted to put too much weight on the first year calculations. It's the first year of your first job, it's the beginning of the journey and not the destination.

If you want to work in Texas groovy, and if you want to work in New York you'll be paying through the nose for that opportunity, but in either case the readily available information for that first year isn't telling the whole story.

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JamMasterJ
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Re: Qualified per-hour pay rankings?

Postby JamMasterJ » Mon May 27, 2013 12:25 pm

thesealocust wrote:(braces himself for this thread becoming yet another cost of living disaster debate)

Something else worth pointing out is that first year compensation and career trajectory/compensation are materially different. SOMEBODY from the class of 2014 is going to make partner at the 2 to 3 million+ PPP firms headquartered in major cities, and the people that don't at least might have more highly compensated career trajectories on average.

It's hard to even speak in averages, and everybody gets their own result as opposed to the average result, but the lock-step $160,000 entry level salary does not hold up over a career span, and as such it's short sighted to put too much weight on the first year calculations. It's the first year of your first job, it's the beginning of the journey and not the destination.

If you want to work in Texas groovy, and if you want to work in New York you'll be paying through the nose for that opportunity, but in either case the readily available information for that first year isn't telling the whole story.

unless, of course, you eat dollar pizza 15x per week :lol:

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thesealocust
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Re: Qualified per-hour pay rankings?

Postby thesealocust » Mon May 27, 2013 12:55 pm

JamMasterJ wrote:unless, of course, you eat dollar pizza 15x per week :lol:


We'll see who's laughing when I retire at 30 in order to rent out jet skis on a tropical island.

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Re: Qualified per-hour pay rankings?

Postby rad lulz » Mon May 27, 2013 12:59 pm

,
Last edited by rad lulz on Tue Oct 04, 2016 10:39 pm, edited 1 time in total.

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Monochromatic Oeuvre
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Re: Qualified per-hour pay rankings?

Postby Monochromatic Oeuvre » Mon May 27, 2013 1:00 pm

thesealocust wrote:The components of your metric are all available and worthy of consideration, but your metric itself is retarded and would suggest you should turn down a clerkship with judge Kozinski and become a plumber in Mississippi.


I don't think it suggests such a thing--it limits itself to merely a present-moment financial condition, whereas a prestigious clerkship is a)A good bet to raise your potential future income for the rest of your life and b) Valuable for a host of non-financial reasons. It's still just a money metric and goes only as far as a money metric can go. But in that respect, it's a more accurate measure of the practical effects of financial compensation than is an outright salary number, which seems to be by far the most disseminated figure.

Also, realize that your satisfaction with your life is going to be a matter of where you live, what you do, who you do it for, and how much time you spend doing it - not how much you get for it per hour. Somebody who loves Chicago with an interest in corporate isn't going to be happy banking a slightly better hourly wage doing oil & gas litigation in Dallas.


Very true. These seem to me to be, however, non-financial factors, as well as factors that could never be quantitatively applied for an apples-to-apples comparison. They're factors to weigh against financial interests--someone might find a lower take home than NYC instead of Dallas, but have it more than made up by the fact they absolutely love everything NYC has to offer. Or maybe they don't love NYC per se, but really enjoy doing M&A work. I'm only attempting to encompass a other-things-held-equal metric here, not sugest that financial considerations should be the only thing to take into account.

JamMasterJ wrote:OP, If I were you though, there are many numbers that you're not really looking at. The one constant, for instance, is your student loan number (assuming we're pretending you're coming from the same school). For that example (and I'm going to a more extreme differential), Wachtell 250K allows you to pay off a bigger chunk than a much lower salary at a much lower-COL city. You should also note that COL for someone who plans on living off 100k/year in ANY city is a different calculus than those by whom the metric is calculated - 100K/yr requires (unless you need a 2 Br in Tribeca) more travelling, shopping etc (costs that aren't as well displayed in a COL calculator as the basics).


100k is certainly a pretty luxurious COL, even in Manhattan, for a first-year associate. I just used it as an easy--and extreme--example. It's the ratio that really matters--if Lifestyle X is 60k in NYC and 30k in Dallas, you have the same disposable income (though it's not qualified for hours).

Relative desire to pay back loans obviously is an important factor in employment for many associates. Suppose you are committed to a bare-bones COL regardless of where you live (50k in NYC, 25k in Dallas). In that instance, you have more disposable income from Wachtell, and therefore more loan repayment. (Of course, you are living a pretty unfun life at that COL.) This ignores the extra 500 hours per year, but if this really doesn't matter to you and you're looking for all the work you can get, that might be a better decision. But maybe you intend on a slightly higher COL, or expect a faster burnout at Wachtell. Those would be other factors that affect present and future income to consider in the calculus.

Í'm just looking at an apples-to-apples comparison. But folks don't always live comparable lives. Obviously, different financial/life goals lead to different decisions.

thesealocust wrote:(braces himself for this thread becoming yet another cost of living disaster debate)

Something else worth pointing out is that first year compensation and career trajectory/compensation are materially different. SOMEBODY from the class of 2014 is going to make partner at the 2 to 3 million+ PPP firms headquartered in major cities, and the people that don't at least might have more highly compensated career trajectories on average.

It's hard to even speak in averages, and everybody gets their own result as opposed to the average result, but the lock-step $160,000 entry level salary does not hold up over a career span, and as such it's short sighted to put too much weight on the first year calculations. It's the first year of your first job, it's the beginning of the journey and not the destination.

If you want to work in Texas groovy, and if you want to work in New York you'll be paying through the nose for that opportunity, but in either case the readily available information for that first year isn't telling the whole story.


True. Obviously, expected future income is at least as relevant, if not moreso, in a long-term financial consideration than is any firm's starting salary. Though I think conceiving in averages may skew the purpose of the data, because presumably, for most people, each additional dollar has less marginal than the last, e.g. going from $50k to $100k is a much more significant $50k raise than going from $250k to $300k. Let's say Firm A and Firm B each had ten associates. In five years from now, all ten of Firm A's associates will make $200k. At Firm B, one associate will make $2.5M partner and the other nine will be unemployed (making zero). Almost everyone will say Firm A is the more desirable path even though Firm B has a higher expected future income.

But expected future income is nonetheless important as a factor to consider. Maybe burning out at Wachtell means you are way more likely to have six-figures lined up afterwards than burning out at B&B (enough to compensate for COL difference). It's a litle harder to speculate on that stuff--there isn't good data, to my knowledge--but it's an important factor to consider, and good evidence for recognizing the limitations of a metric that can only encompass the expected disposable income at one moment in time.

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thefuturenow
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Re: Qualified per-hour pay rankings?

Postby thefuturenow » Mon May 27, 2013 1:45 pm

SeaLo: to avert COL disaster debate:
Regarding exit options: if one seeks specific exit options e.g. Exxon Mobil--would one (corp. associate) be better served to forgo the V-somethings of NY and head to BB/VE?
Also, would you recommend non-finance exit option seekers to avoid V10s whose transactional work is mostly for finance institutions? Finally, did I assume incorrectly that NY corporate associates do work for mainly banks/insurance/HF type businesses?

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thesealocust
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Re: Qualified per-hour pay rankings?

Postby thesealocust » Mon May 27, 2013 2:02 pm

thefuturenow wrote:SeaLo: to avert COL disaster debate:
Regarding exit options: if one seeks specific exit options e.g. Exxon Mobil--would one (corp. associate) be better served to forgo the V-somethings of NY and head to BB/VE?
Also, would you recommend non-finance exit option seekers to avoid V10s whose transactional work is mostly for finance institutions? Finally, did I assume incorrectly that NY corporate associates do work for mainly banks/insurance/HF type businesses?


The NY firms have very varied client lists. Some are heavily focused on the banks and financial institutions, some are almost exclusively focused on the banks and financial institutions, and some are much more varied (good example: Quinn NY spends all of its time suing banks). Do your due diligence there.

Exit options are really hard to generalize, but if you want to go to a specific sector finding a firm that's in bed with that sector is prudent. Keep in mind that large company's often split work amongst a variety of firms; a firm that is business X's go-to firm for its usual business needs may still tap NY firms for major M&A/capital markets/finance work (hence why even the firms that do lots of finance work aren't only working for the banks).

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Advice Dog
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Re: Qualified per-hour pay rankings?

Postby Advice Dog » Tue May 28, 2013 11:18 pm

Dear Gentle OP,

I do not know if such a chart exists, but your concern is indeed well placed. I believe you should endeavor to compile such a chart. Many 0Ls, as you suggested, would be well suited knowing whether they should work at Wachtell, Boies, or Cravath. The choice of future elite firm can be mind-boggling to the 0L. I imagine most 0Ls and 1Ls face this problem and may pick Cravath over Wachtell without considering the standardized median pay-per-hour. 0L Wachtell leaping has become quite the epidemic.

Yours, etc.

Advice Dog

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guano
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Re: Qualified per-hour pay rankings?

Postby guano » Wed May 29, 2013 1:44 am

Yeah , this is retarded.
Figure out the lifestyle you want, and don't worry about the rest.
B&B Texas is a different lifestyle, socially and professionally, to Cravath NYC. But if you get into either, you won't be poor.




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