How much do first year equity partners make? Forum

[Anonymous User]

I think there's a lot of "grass is greener on the other side" sentiment ITT - and on similar threads. Quite honestly, if you want it enough (and I know, this is a big caveat), there are few more efficient and guaranteed paths to joining the American middle-upper (or straight-up upper) class and gaining generational wealth than elite BigLaw. You grind it out for 8-10 years and then it's guaranteed 7-figures for the next 30 years. People like to tout the vagaries of "business development" and the importance of having "killer" networking skills, but if you're at a V10/20, no one at the firm wants or needs you to bring in a client to prove your worth to the partnership - you just need to service Blackstone or Disney like they're your god (which they are lol). Partnership at McKinsey or Goldman are much more drawn out processes that are objectively more difficult from a numbers perspective and, tbh, I'm not sure i-bankers and consultants make that much more than the average V20 partner these days. Their WLB is also trash.

I agree that the compensation for a KKR MD or Sequoia partner (or joining some unicorn) is on another level, but those gigs are near impossible to get, even for Stanford or Harvard MBAs, much less for lawyers. And even if you got that position, you actually need to "make things" - i.e., make a good investment, find the next Facebook, etc. - that, arguably, require actual brainpower lol. I'm rambling, but the point is, if your goal is to make money in corporate (ignoring happiness, WLB, meaning, etc.), you should really be grateful to be in elite BigLaw. Few other white collar paths in 2022 give you tenure-like career with average $2 million+ annual partnership draws, with the ability to build a nest egg of $25-50 million by your fifties/sixties. Sure, you're never going to be a billionaire, but then again, no one on TLS is going to be one.

TITCR.

I said something similar upthread but would add that if you make equity at a Kirkland or Latham, you will be at ~$5 million/year 10 years from now. And there’s real potential to make 8 figures / year another 10 years after that (20 years into your career) if you ingrain yourself as a core member of a non-specialist practice group.

[Anonymous User]

I think there's a lot of "grass is greener on the other side" sentiment ITT - and on similar threads. Quite honestly, if you want it enough (and I know, this is a big caveat), there are few more efficient and guaranteed paths to joining the American middle-upper (or straight-up upper) class and gaining generational wealth than elite BigLaw. You grind it out for 8-10 years and then it's guaranteed 7-figures for the next 30 years. People like to tout the vagaries of "business development" and the importance of having "killer" networking skills, but if you're at a V10/20, no one at the firm wants or needs you to bring in a client to prove your worth to the partnership - you just need to service Blackstone or Disney like they're your god (which they are lol). Partnership at McKinsey or Goldman are much more drawn out processes that are objectively more difficult from a numbers perspective and, tbh, I'm not sure i-bankers and consultants make that much more than the average V20 partner these days. Their WLB is also trash.

I agree that the compensation for a KKR MD or Sequoia partner (or joining some unicorn) is on another level, but those gigs are near impossible to get, even for Stanford or Harvard MBAs, much less for lawyers. And even if you got that position, you actually need to "make things" - i.e., make a good investment, find the next Facebook, etc. - that, arguably, require actual brainpower lol. I'm rambling, but the point is, if your goal is to make money in corporate (ignoring happiness, WLB, meaning, etc.), you should really be grateful to be in elite BigLaw. Few other white collar paths in 2022 give you tenure-like career with average $2 million+ annual partnership draws, with the ability to build a nest egg of $25-50 million by your fifties/sixties. Sure, you're never going to be a billionaire, but then again, no one on TLS is going to be one.

To be fair, the grass is literally greener on the other side if you have more money, because money is green and you can cover the non-green parts of your grass with it

[thisismytlsuername]

For sure, I agree with the two posters who said that all you need to do to make $50 million in biglaw is work really hard for 8-10 years.

[Sackboy]

For sure, I agree with the two posters who said that all you need to do to make $50 million in biglaw is work really hard for 8-10 years.

The sarcasm is clear, but it's not particularly wrong. If you bill 2200-2400/yr. for a decade and work in a main or specialist corporate group, I'd give you a 80% shot at getting equity, assuming regular markets. $50 million is probably realistic if you're at a V20 with great financials and aren't a crazy spender. $20 million is probably more realistic if you're at a V50 with good financials and aren't a crazy spender.

[Anonymous User]

For sure, I agree with the two posters who said that all you need to do to make $50 million in biglaw is work really hard for 8-10 years.

The sarcasm is clear, but it's not particularly wrong. If you bill 2200-2400/yr. for a decade and work in a main or specialist corporate group, I'd give you a 80% shot at getting equity, assuming regular markets. $50 million is probably realistic if you're at a V20 with great financials and aren't a crazy spender. $20 million is probably more realistic if you're at a V50 with good financials and aren't a crazy spender.

This is incorrect. At least in my and my friends experience. You can certainly make counsel or income partner doing this. Equity is harder and would be much lower than 80%. Probably closer to 25%. But…. You have to be pretty good to generate an average of 2300 billables over a 8-10 year period. The average asssociates are not going to generate those kinds of hours when recessions and other slowdowns are factored in. so this is still a pretty high bar. Certainly equity is not a realistic option for 80% of all associates, regardless of their desires and work ethic.

[GauchoPI]

How about the USAO/SEC route for litigation?

A typical TLSer who did T-14/Dt clerk/V-20 will be competitive in all but SDNY/EDNY. And could even start-off in a flyover district with the possibility of eventually lateraling (obviously, this isn't true during slowdowns).

Without giving too many details, I have above-numbers and have done fairly well in BigFed interviews, with the caveat being that I'm geographically mobile.

Anyways, wouldn't 5-10 years in a USAO be a sure bet to returning to biglaw as a NEP or Of Counsel, with ability to get shares fairly quickly? And would it be easier to go to a V-10 that has lots of institutional clients vs a boutique/v-100? I would love insight into this process!

[Sackboy]

For sure, I agree with the two posters who said that all you need to do to make $50 million in biglaw is work really hard for 8-10 years.

The sarcasm is clear, but it's not particularly wrong. If you bill 2200-2400/yr. for a decade and work in a main or specialist corporate group, I'd give you a 80% shot at getting equity, assuming regular markets. $50 million is probably realistic if you're at a V20 with great financials and aren't a crazy spender. $20 million is probably more realistic if you're at a V50 with good financials and aren't a crazy spender.

This is incorrect. At least in my and my friends experience. You can certainly make counsel or income partner doing this. Equity is harder and would be much lower than 80%. Probably closer to 25%. But…. You have to be pretty good to generate an average of 2300 billables over a 8-10 year period. The average asssociates are not going to generate those kinds of hours when recessions and other slowdowns are factored in. so this is still a pretty high bar. Certainly equity is not a realistic option for 80% of all associates, regardless of their desires and work ethic.

80% of associates aren't putting this effort in and sticking around for a decade.

[Monochromatic Oeuvre]

I think 25% making equity is probably a realistic estimate for committed, motivated and well-liked senior associates. Without those qualifiers, it would be much lower.

[Anonymous User]

I think 25% making equity is probably a realistic estimate for committed, motivated and well-liked senior associates. Without those qualifiers, it would be much lower.

Agree with this. This is a small subset of even those who are willing to put in the work, which is a small subset of all associates. Hence why only like 2-5% of all big law associates make equity.

[Anonymous User]

For sure, I agree with the two posters who said that all you need to do to make $50 million in biglaw is work really hard for 8-10 years.

The sarcasm is clear, but it's not particularly wrong. If you bill 2200-2400/yr. for a decade and work in a main or specialist corporate group, I'd give you a 80% shot at getting equity, assuming regular markets. $50 million is probably realistic if you're at a V20 with great financials and aren't a crazy spender. $20 million is probably more realistic if you're at a V50 with good financials and aren't a crazy spender.

This is incorrect. At least in my and my friends experience. You can certainly make counsel or income partner doing this. Equity is harder and would be much lower than 80%. Probably closer to 25%. But…. You have to be pretty good to generate an average of 2300 billables over a 8-10 year period. The average asssociates are not going to generate those kinds of hours when recessions and other slowdowns are factored in. so this is still a pretty high bar. Certainly equity is not a realistic option for 80% of all associates, regardless of their desires and work ethic.

80% of associates aren't putting this effort in and sticking around for a decade.

And 80% of associates doing this will not be able to demonstrate a business case to becoming owners of the firm. Equity is totally different.

[Anonymous User]

Adding a data point for the thread topic: V50ish, first-year equity partner, $650k. A significant caveat is that we don't have a non-equity tier, so I'm more like an income partner (and will be so for 3-5 years), and I think the comp reflects that.

[RedNewJersey]

How about the USAO/SEC route for litigation?

A typical TLSer who did T-14/Dt clerk/V-20 will be competitive in all but SDNY/EDNY. And could even start-off in a flyover district with the possibility of eventually lateraling (obviously, this isn't true during slowdowns).

Without giving too many details, I have above-numbers and have done fairly well in BigFed interviews, with the caveat being that I'm geographically mobile.

Anyways, wouldn't 5-10 years in a USAO be a sure bet to returning to biglaw as a NEP or Of Counsel, with ability to get shares fairly quickly? And would it be easier to go to a V-10 that has lots of institutional clients vs a boutique/v-100? I would love insight into this process!

In places I'm familiar with, working 5-10 years at a random USAO would not be enough to guarantee returning as NEP or counsel. Location matters, as well as what you work on--prosecuting child pornographers, Indian country crimes, drug cases, etc. doesn't automatically translate to bread-and-butter internal investigations. If you can do significant white collar prosecutions in major cities, this is a great path. Other options can of course be valuable experience, but soft factors like location, what the experience was, connections to firms, and so forth will matter a lot (though lots of people really enjoy their time, so it's not a bad gig even if it doesn't lead to partnership).

[Anonymous User]

Adding a data point for the thread topic: V50ish, first-year equity partner, $650k. A significant caveat is that we don't have a non-equity tier, so I'm more like an income partner (and will be so for 3-5 years), and I think the comp reflects that.

Very helpful data point - seems more and more firms are moving to income partners - even if described as equity. What is PEP of the firm? Seems more helpful than vault.

Also are there any hurdles to getting materially higher pay in 3-5 years?

[Sackboy]

Adding a data point for the thread topic: V50ish, first-year equity partner, $650k. A significant caveat is that we don't have a non-equity tier, so I'm more like an income partner (and will be so for 3-5 years), and I think the comp reflects that.

Very helpful data point - seems more and more firms are moving to income partners - even if described as equity. What is PEP of the firm? Seems more helpful than vault.

Also are there any hurdles to getting materially higher pay in 3-5 years?

I think PEP would quickly reveal that its Morgan Lewis or A&P. Otherwise, I don't think any firm close to the V50 has a one-tier partnership. Though, I think Morgan Lewis moved to two-tier in the past year or so, so maybe it's just A&P lol. Or, maybe this is one of those one-tier partnerships that gives you a mixture of equity and base salary comp if you're a more "junior" "equity" partner, which might as well be fancy nonequity partnership.

[Anonymous User]

I just made equity partner at a V30. All in comp will be ~$850k first year.

Not to derail the thread, but should I get a financial advisor to manage my money? I know the general view is that its a waste of money for most, but does that change at this income level?

[Anonymous User]

I just made equity partner at a V30. All in comp will be ~$850k first year.

Not to derail the thread, but should I get a financial advisor to manage my money? I know the general view is that its a waste of money for most, but does that change at this income level?

You should do it. At this level, there are very significant tax decisions to make, which can help or harm you. It's not just long-term stuff like estate planning, it's also about timing of selling stock, taking out margin loans instead of selling, tax loss harvesting, structuring charitable contributions, paying for kids, etc. In my first few years as a partner I made some pretty large mistakes. On the one hand, they only represented a week or two of income, on the other, that's enough to buy a car...

[CLS2023A]

Please forgive this stupid question from a 3L lurking here. How do equity partners *also* function as quasi income partners in the initial years, as referenced in the posts above?

[Anonymous User]

Some of the numbers reported are a little surprising to me. I just made partner at my V50 firm and while I don't know my sharing ratio yet, I was told that first year partner could expect around $1-1.2 million the first year. But our PPP was over $3 million last year, so maybe that's it. We only have one class of partners.

[Sackboy]

Please forgive this stupid question from a 3L lurking here. How do equity partners *also* function as quasi income partners in the initial years, as referenced in the posts above?

Here is a base salary of $300,000 and a share of equity that "should" payout approximately $300,000, as opposed to here is a share of equity that "should" payout $600,000. Having more equity is always better if you (1) want more power in the firm and (2) think the firm is going to do well. Latham's nonequity partners famously make about $1M through a split of income and equity. It's basically a way to keep talent around, hedge for bad years, and further segment the equity class.

[Anonymous User]

Adding a data point for the thread topic: V50ish, first-year equity partner, $650k. A significant caveat is that we don't have a non-equity tier, so I'm more like an income partner (and will be so for 3-5 years), and I think the comp reflects that.

Very helpful data point - seems more and more firms are moving to income partners - even if described as equity. What is PEP of the firm? Seems more helpful than vault.

Also are there any hurdles to getting materially higher pay in 3-5 years?

I think PEP would quickly reveal that its Morgan Lewis or A&P. Otherwise, I don't think any firm close to the V50 has a one-tier partnership. Though, I think Morgan Lewis moved to two-tier in the past year or so, so maybe it's just A&P lol. Or, maybe this is one of those one-tier partnerships that gives you a mixture of equity and base salary comp if you're a more "junior" "equity" partner, which might as well be fancy nonequity partnership.

My V50 does the same. It’s nauseating having to listen to junior partners tell everyone they’re equity because they made a capital contribution, when they’re effectively making a similar amount to a Kirkland NSP

[Anonymous User]

Adding a data point for the thread topic: V50ish, first-year equity partner, $650k. A significant caveat is that we don't have a non-equity tier, so I'm more like an income partner (and will be so for 3-5 years), and I think the comp reflects that.

Very helpful data point - seems more and more firms are moving to income partners - even if described as equity. What is PEP of the firm? Seems more helpful than vault.

Also are there any hurdles to getting materially higher pay in 3-5 years?

I think PEP would quickly reveal that its Morgan Lewis or A&P. Otherwise, I don't think any firm close to the V50 has a one-tier partnership. Though, I think Morgan Lewis moved to two-tier in the past year or so, so maybe it's just A&P lol. Or, maybe this is one of those one-tier partnerships that gives you a mixture of equity and base salary comp if you're a more "junior" "equity" partner, which might as well be fancy nonequity partnership.

My V50 does the same. It’s nauseating having to listen to junior partners tell everyone they’re equity because they made a capital contribution, when they’re effectively making a similar amount to a Kirkland NSP

OP here. This more or less describes my comp structure--a bit of equity and mostly fixed. But formally, we only have one tier of partnership.

I'd rather not share PEP. But it's well north of A&P or Morgan Lewis.

To answer one question, the hurdle to substantially increasing comp over the next 3-5 years is developing a meaningful book of business.

Jealous of the other V50 guy/gal who's maybe clearing $1 million--good for you (seriously).

[Anonymous User]

Adding a data point for the thread topic: V50ish, first-year equity partner, $650k. A significant caveat is that we don't have a non-equity tier, so I'm more like an income partner (and will be so for 3-5 years), and I think the comp reflects that.

Very helpful data point - seems more and more firms are moving to income partners - even if described as equity. What is PEP of the firm? Seems more helpful than vault.

Also are there any hurdles to getting materially higher pay in 3-5 years?

I think PEP would quickly reveal that its Morgan Lewis or A&P. Otherwise, I don't think any firm close to the V50 has a one-tier partnership. Though, I think Morgan Lewis moved to two-tier in the past year or so, so maybe it's just A&P lol. Or, maybe this is one of those one-tier partnerships that gives you a mixture of equity and base salary comp if you're a more "junior" "equity" partner, which might as well be fancy nonequity partnership.

My V50 does the same. It’s nauseating having to listen to junior partners tell everyone they’re equity because they made a capital contribution, when they’re effectively making a similar amount to a Kirkland NSP

OP here. This more or less describes my comp structure--a bit of equity and mostly fixed. But formally, we only have one tier of partnership.

I'd rather not share PEP. But it's well north of A&P or Morgan Lewis.

To answer one question, the hurdle to substantially increasing comp over the next 3-5 years is developing a meaningful book of business.

Jealous of the other V50 guy/gal who's maybe clearing $1 million--good for you (seriously).

Doesn't the gig sound pretty terrible then? Working partner hours to make counsel money? Feels like a dead end job for anyone without a desire to build a book, and sounds like they should be aggressively shopping their resume around to find a gig where they can make their $1 million/year as a pure service partner, which shouldn't be all that difficult given the ridiculous partner billing rate and high realizations rates in the V30. Now obviously the assumption is that you are at least somehwat marketable, but not sure what the motiviation is to push for partner if you just end up with basically a counsel gig.

[Anonymous User]

Because if you do build a book of business you have the opportunity to make a lot more than counsel….? That’s the entire point. Not sure where you get the assumption PP has no desire to develop business.

Ability to “easily” lateral to a &1m+ service partner role is, at best, practice dependent…

What a weird take.

[Anonymous User]

Adding a data point for the thread topic: V50ish, first-year equity partner, $650k. A significant caveat is that we don't have a non-equity tier, so I'm more like an income partner (and will be so for 3-5 years), and I think the comp reflects that.

Very helpful data point - seems more and more firms are moving to income partners - even if described as equity. What is PEP of the firm? Seems more helpful than vault.

Also are there any hurdles to getting materially higher pay in 3-5 years?

I think PEP would quickly reveal that its Morgan Lewis or A&P. Otherwise, I don't think any firm close to the V50 has a one-tier partnership. Though, I think Morgan Lewis moved to two-tier in the past year or so, so maybe it's just A&P lol. Or, maybe this is one of those one-tier partnerships that gives you a mixture of equity and base salary comp if you're a more "junior" "equity" partner, which might as well be fancy nonequity partnership.

My V50 does the same. It’s nauseating having to listen to junior partners tell everyone they’re equity because they made a capital contribution, when they’re effectively making a similar amount to a Kirkland NSP

Don't undervalue the benefits of being an actual equity partner though. A junior equity partner at a V50 may make the same (maybe even less) than highly compensated Kirkland NSPs but, speaking from some experience here, there's a world of difference in terms of your perceived value when you are part of the equity group vs. a glorified senior associate.

[Anonymous User]

Please forgive this stupid question from a 3L lurking here. How do equity partners *also* function as quasi income partners in the initial years, as referenced in the posts above?

There are two meanings to this. One has already been discussed, i.e., the comp. is structured as a mix of income and equity. The second, which is more psychological, is: Getting into the equity tier in your first few years can be as much (often more) about whether you're liked and whether you have a good reputation with existing institutional clients than about your book. People, especially in the upper echelon of the V50, get equity all the time without having any real book, certainly no portable book. So in that sense too you're sort of an income partner even as a junior with equity -- your draw is being supported by institutional clients and the biz. dev. of the partnership. As time goes on as has already been pointed out if you want your compensation to increase you need to actually contribute to the firm's business growth.