How much do first year equity partners make? Forum

[Anonymous User]

I'm the original $650k new "equity" partner. Responding to no one in particular, I'm not really upset at the comp because, again, I recognize that I'm effectively an income partner by a different name. Based on other posts, it sounds like I theoretically could have gone to a similarly ranked firm that mints real equity partners after 8 years on the associate track and I could have been making > $1m right now. IDK. I definitely wasn't considering that factor when I was deciding on firms eight years ago. And I wonder whether I would really have made partner at one of those firms--seems like it would have to be harder.

Regardless, it's a fuck ton of money relative to my working class upbringing, so I'm really not losing sleep over what could have been. If it ever gets to the point where the cons outweigh the pros, I'll walk away with substantially more social and financial capital than I would have in almost any other scenario with my polisci degree from a state school.

Does the bold happen at v50 firms? After 8 years at my v50, we get income partnership (or counsel), not equity.

OP: I don't know; someone upthread seemed to be suggesting that. I'm skeptical.

[Anonymous User]

I made equity partner at my V30 this year. I’m class of 2015. All in comp is about $900k and increases substantially in 3+ years.

[Anonymous User]

I made equity partner at my V30 this year. I’m class of 2015. All in comp is about $900k and increases substantially in 3+ years.

Is this corporate or lit?

[Anonymous User]

I made equity partner at my V30 this year. I’m class of 2015. All in comp is about $900k and increases substantially in 3+ years.

Is this corporate or lit?

Corporate

[Anonymous User]

I made equity partner at my V30 this year. I’m class of 2015. All in comp is about $900k and increases substantially in 3+ years.

Is this corporate or lit?

Corporate

Is there a difference in partnership track/compensation between corporate and lit at your firm? Congrats btw!

[Anonymous User]

I made equity partner at my V30 this year. I’m class of 2015. All in comp is about $900k and increases substantially in 3+ years.

Is this corporate or lit?

Corporate

Is there a difference in partnership track/compensation between corporate and lit at your firm? Congrats btw!

Not formally, but I think at most firms corporate has a better chance of making partner earlier than lit.

[Sackboy]

Is there a difference in partnership track/compensation between corporate and lit at your firm? Congrats btw!

Not formally, but I think at most firms corporate has a better chance of making partner earlier than lit.

I'm pretty sure this is true at every biglaw firm except for QE and maybe a couple of other obvious exceptions. Cravath announced something like 7 new corporate partners and 1 new litigation partner this year. If you want to do lit and have a reasonable shot at equity, I'd go to a boutique or maybe midlaw. Biglaw lit is brutal to get equity in, and you no doubt are going to make less than corporate folks, on average.

[Anonymous User]

Is there a difference in partnership track/compensation between corporate and lit at your firm? Congrats btw!

Not formally, but I think at most firms corporate has a better chance of making partner earlier than lit.

I'm pretty sure this is true at every biglaw firm except for QE and maybe a couple of other obvious exceptions. Cravath announced something like 7 new corporate partners and 1 new litigation partner this year. If you want to do lit and have a reasonable shot at equity, I'd go to a boutique or maybe midlaw. Biglaw lit is brutal to get equity in, and you no doubt are going to make less than corporate folks, on average.

Yeah relative partnership chances are generally determined by how profitable and large your practice is (because there needs to be enough work to add you to the partnership, and that work needs to be profitable enough for your efforts to be worth the huge boost in comp). This will play our differently at different firms, but generally speaking at most BigLaw firms that would mean your partnership chances are:

M&A or possibly CapM > other corporate > commercial lit or possibly white collar > other lit > specialists.

Nobody has a good chance of making equity. But on a relative basis, an M&A associate has a better shot than a general lit associate, who has a better shot than an environmental or tax associate.

The above also applies to how much each partner makes compared to the others within the partnership, generally speaking.

[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.

Circling back here, confirmed that my all-in comp as a first year equity partner is just over $1M. But most others in my class will be at $800k or $900k. I should be around this level for a couple of years and then can break into $1.5M+.

[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.

Circling back here, confirmed that my all-in comp as a first year equity partner is just over $1M. But most others in my class will be at $800k or $900k. I should be around this level for a couple of years and then can break into $1.5M+.

Curious as to how you got more than your peer first year EPs. Do you know why you got more shares? Is it a practice group thing or something you did?

[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.

Circling back here, confirmed that my all-in comp as a first year equity partner is just over $1M. But most others in my class will be at $800k or $900k. I should be around this level for a couple of years and then can break into $1.5M+.

Curious as to how you got more than your peer first year EPs. Do you know why you got more shares? Is it a practice group thing or something you did?

The sharing ratios for all partners at my firm are visible to each partner. As for why I got more shares, it's probably because I'm in a niche, transactional practice with the highest billing rates in the firm and I've always been a high biller. There are a few others in a practice like M&A that are at my level (or slightly higher), but I think as far as a specialist goes, this is as high as you can get out the gate.

[Anonymous User]

First year share partners at K&E make $1.5 million as part of the "transition year". Afterwards it is based on share count x earnings per share, which most recently resulted in comp of around $2.5 million.

[Anonymous User]

First year share partners at K&E make $1.5 million as part of the "transition year". Afterwards it is based on share count x earnings per share, which most recently resulted in comp of around $2.5 million.

Is there any way to reduce taxes on that comp? Just curious if they do something or all taxed like ordinary income

[topherdane]

First year share partners at K&E make $1.5 million as part of the "transition year". Afterwards it is based on share count x earnings per share, which most recently resulted in comp of around $2.5 million.

Is there any way to reduce taxes on that comp? Just curious if they do something or all taxed like ordinary income

Partners at all firms should be able to take advantage of tax-deferred SEP contributions with a cap at $66K for 2023 tax year. In addition, at the firm level, cash benefit plans might provide some benefit (that’s is passed through to partners).

Several states (including NY) have recently passed laws allowing firms to pay State tax at the firm level, so they pass through less federally taxable money to partners. This is just a workaround after the TCAJA crippled the SALT deduction 5 years ago.

Firms can try to shift money around between various offices, but this obviously runs a risk of getting into trouble.

Otherwise, standard individual tax planning applies. Harvest stock losses, defer gains when you can, keep good track of charitable contributions, etc.