Why do a lot of biglaw lawyers say they're not "living the life" financially-wise? Forum

[Anonymous User]

Hi everyone,

I'm not sure if this falls within the anonymous exception but because my firm is able to be figured out from the info provided, I went anonymous. Sorry if not okay.

I got a summer offer for a NJ firm paying 3100 a week; hopefully will get FT. Only will have 50K in loans when graduate. I just don't get why a lot of the NYC lawyers I talk to say they're not well off. From what I understand a salary of 160 or 180 a year is at least upper middle class.

Is it the not guaranteed future salary? loan payments? NYC cola? or comparison to banking salaries?

I feel like at least in NJ salary affords a house, a nice car and vacations every year while still saving some so just not sure where I'm off.

Thanks in advance!

[lawhopeful100]

Hi everyone,

I'm not sure if this falls within the anonymous exception but because my firm is able to be figured out from the info provided, I went anonymous. Sorry if not okay.

I got a summer offer for a NJ firm paying 3100 a week; hopefully will get FT. Only will have 50K in loans when graduate. I just don't get why a lot of the NYC lawyers I talk to say they're not well off. From what I understand a salary of 160 or 180 a year is at least upper middle class.

Is it the not guaranteed future salary? loan payments? NYC cola? or comparison to banking salaries?

I feel like at least in NJ salary affords a house, a nice car and vacations every year while still saving some so just not sure where I'm off.

Thanks in advance!

A lot of people have more than 50k in loans. Many at 200k or higher.

[Anonymous User]

Because what you have in total loans, I paid off last year in principal alone, and will continue to for at least a few years.

[sweets91]

Hi everyone,

I'm not sure if this falls within the anonymous exception but because my firm is able to be figured out from the info provided, I went anonymous. Sorry if not okay.

I got a summer offer for a NJ firm paying 3100 a week; hopefully will get FT. Only will have 50K in loans when graduate. I just don't get why a lot of the NYC lawyers I talk to say they're not well off. From what I understand a salary of 160 or 180 a year is at least upper middle class.

Is it the not guaranteed future salary? loan payments? NYC cola? or comparison to banking salaries?

I feel like at least in NJ salary affords a house, a nice car and vacations every year while still saving some so just not sure where I'm off.

Thanks in advance!

it's also really relative - maybe compared to the lawyer's peers he feels that he's not AS well off. Also, NYC is expensive to live in

[Anonymous User]

Loans. The job is also miserable, so even when the loans are paid off you have to save like crazy because it's either shitty legal exit options with slightly better hours or a full reset on your career. Sucks.

[Desert Fox]

Because it's not really worth it. You don't feel rich because you aren't. 180k maybe lower upper middle class in NYC. You can't even afford a two bedroom apartment within a 30 min walk to work. Most of the country would laugh at that.

[KMart]

Loans. That explains why this board is so adamant about going to school at the right price.

[RaceJudicata]

In that vein, when do loans become "manageable" on a typical big law salary/career trajectory? i.e. $75k, 100k, 150k, etc. ?

[umichman]

I think you are correct though. if you graduate int eh perfect position, little to no loans, in a 180k job in a non-nyc in a group you can stick aroudn in for a while, i think you are not lower class. Lawyers are a complainy bunch. No doubt though that loans in NYC can put a cramp in anyone's style.

[thegrayman]

I think a lot of it is psychological, when you're stressed out you don't feel comfortable. I made more in biglaw than I do now, yet I felt "poor" because I was always stressed out and felt like the sky was falling, so I would never pull the trigger on expensive things. I was too worried about getting fired and my income falling to zero to ever relax and actually enjoy the money I was making.

[unlicensedpotato]

Combination of opportunity and financial cost of law school and the fact that your annual income may very well peak at 32ish (and even this is a "good" outcome).

[dixiecupdrinking]

Primarily because they're entitled whiners who lack perspective.

[SFSpartan]

The correct answer is likely some combination of all of the above. Though I think it's a lack of perspective more than loans or high COL (which both suck too) that contribute to this. I think the lack of perspective is really a product of human nature. Most biglawyers work with and for clients that are wealthier than they are. Most of these folks make more $$$ despite hours that are less than or on par with biglawyers. When everyone around you seems to have more money than you do, it's easy to have your perspective skewed, despite the fact that first year associates at market paying firms are in the top 10% of salaries nationwide.

Also wouldn't be surprised if those that didn't feel they were "living the life" financially skewed toward K-JDs that never worked in service jobs before. I never worked a service job as my sole source of income. However, I did work in the service industry (waiting tables, tending bar, and doing room service) to pay living expenses in college. I can attest to the fact that this work makes me super grateful to have a job where I can sit in a comfy chair in an air-conditioned office all day.

[dixiecupdrinking]

Yeah, I mean the job can suck, but there's no reasonable case that it's not highly compensated.

[Anonymous User]

The correct answer is likely some combination of all of the above. Though I think it's a lack of perspective more than loans or high COL (which both suck too) that contribute to this. I think the lack of perspective is really a product of human nature. Most biglawyers work with and for clients that are wealthier than they are. Most of these folks make more $$$ despite hours that are less than or on par with biglawyers. When everyone around you seems to have more money than you do, it's easy to have your perspective skewed, despite the fact that first year associates at market paying firms are in the top 10% of salaries nationwide.

Also wouldn't be surprised if those that didn't feel they were "living the life" financially skewed toward K-JDs that never worked in service jobs before. I never worked a service job as my sole source of income. However, I did work in the service industry (waiting tables, tending bar, and doing room service) to pay living expenses in college. I can attest to the fact that this work makes me super grateful to have a job where I can sit in a comfy chair in an air-conditioned office all day.

Perspective definitely matters. Sure, compared to just about every other white collar job biglaw is fucking miserable, but if all you know is manual labor and food service jobs then biglaw is alright.

[star fox]

I think you are correct though. if you graduate int eh perfect position, little to no loans, in a 180k job in a non-nyc in a group you can stick aroudn in for a while, i think you are not lower class. Lawyers are a complainy bunch. No doubt though that loans in NYC can put a cramp in anyone's style.

The general rule of thumb (for everyone) is if your loans are less than your first year salary that's manageable.

[jbagelboy]

After taxes, loan payments, and high base COL, first and second year associates aren't actually taking home that much money. People are also risk averse and feel like they need to 'save.' You don't feel "rich" or well off with constantly negative net worth.

By the time you're a third or fourth year, if you last that long, you have made a decent chunk in your loans and at the new market scale you're pulling in nearly $300k pretax all in. At that point biglawyers start living more luxuriously, buying a german car, a downpayment on a house or upgrade to a two bedroom, taking more vacations. People also run into additional expenses like weddings and children at this point though that limit their extravagances.

Also, consider more generally that standards for "wealth" in this country have changed over the past two decades. A six figure plus income in the 1990s carried with it the cultural impetus--or stigma--of an upper middle class lifestyle. Today in places like the bay area or metropolitan new york, many of the commodities that signal structural wealth--owning a nice home, a vacation cottage, several cars and private school tuitions for the kids--remain out of reach for many years.

Lastly, I don't think bankers are of any relevance. With the latest pay boost, salaries for junior attorneys and banking associates (post-MBA) have practically leveled off, with top performers at bulge bracket making ~$240k, mid-performers $200k and lower end near the $135k base, but salary increases less substantial and less frequent than attorney lock step. The biggest difference between these two groups is that bankers typically have far less student loan debt, so they enjoy a much higher percentage of their take-home pay.

[KMart]

I think you are correct though. if you graduate int eh perfect position, little to no loans, in a 180k job in a non-nyc in a group you can stick aroudn in for a while, i think you are not lower class. Lawyers are a complainy bunch. No doubt though that loans in NYC can put a cramp in anyone's style.

The general rule of thumb (for everyone) is if your loans are less than your first year salary that's manageable.

This is a good rule of thumb but remember it's general. I'm risk-averse so I wouldn't take a 150k debt load for school. It's going to depend on who you are and what you're looking for.

[lavarman84]

Because it's not really worth it. You don't feel rich because you aren't. 180k maybe lower upper middle class in NYC. You can't even afford a two bedroom apartment within a 30 min walk to work. Most of the country would laugh at that.

Stop living in New York.

[Anonymous User]

Lastly, I don't think bankers are of any relevance. With the latest pay boost, salaries for junior attorneys and banking associates (post-MBA) have practically leveled off, with top performers at bulge bracket making ~$240k, mid-performers $200k and lower end near the $135k base, but salary increases less substantial and less frequent than attorney lock step. The biggest difference between these two groups is that bankers typically have far less student loan debt, so they enjoy a much higher percentage of their take-home pay.

Comparing just the numbers out of the gate is quite deceptive; assuming they're not drummed out immediately, junior and mid-level bankers make quite a bit more. These are CS's figures (self-reported, mid-bucket):

AO 0, 125k base, 35k flat bonus (100% cash) (stub year)
AO 1, 150k base, 97k bonus (100% cash)
AO 2, 175k base, 125k (100% cash)
AO 3, 200k base, 200k (100% cash)

(The disparity continues to grow at least at the VP level -- the next 3-5 years -- and my guess is that post-IB comp packages are significantly better than the equivalent of going in house.)

http://www.wallstreetoasis.com/forums/2 ... discussion

[A. Nony Mouse]

Because it's not really worth it. You don't feel rich because you aren't. 180k maybe lower upper middle class in NYC. You can't even afford a two bedroom apartment within a 30 min walk to work. Most of the country would laugh at that.

Stop living in New York.

I don't (and I also get paid less than almost everyone in this thread), but NY does have the most biglaw jobs, especially if you don't have ties to other major cities.

[dabigchina]

People like to compare up, not down.

Biglaw associates will not compare themselves to big4 accountants (who work just as much for 1/3 of the pay). They will compare themselves to investment bankers and conclude that their lives suck.

Investment bankers will compare themselves to PE/HF guys and conclude that their lives suck.

I have no idea who PE/HF guys compare themselves to because I can't even imagine having that much money.

Also crippling debt. Don't pay sticker kids.

[iowa_john12]

Just to clarify, is your question why people like me, who have to make monthly payments of $3-4k for 10 years, think we're not "living the life" financially with an employer who has a roughly 80% attrition rate by year 5?

I could literally lease a Ferrari for the amount of my monthly payments. Instead I have a roommate in a shitty walkup. You're asking why I don't feel like I'm living the life financially? If I play my cards right, my net worth will be zero in 8-10 years of working 60-80 hour weeks. Is that what you're getting at?

[Anonymous User]

People like to compare up, not down.

Biglaw associates will not compare themselves to big4 accountants (who work just as much for 1/3 of the pay). They will compare themselves to investment bankers and conclude that their lives suck.

Investment bankers will compare themselves to PE/HF guys and conclude that their lives suck.

I have no idea who PE/HF guys compare themselves to because I can't even imagine having that much money.

Also crippling debt. Don't pay sticker kids.

Not really relevant to the thread, but in case any auditors considering law school read this, former big 4 auditor turned biglawyer here. Big 4 audit was better than corporate biglaw in every way except pay (or maybe prestige for any fuckers dumb enough to buy into that). Obviously pay matters, but I include exit options when I say big 4 audit is better. I didn't realize how shitty corporate big law exit options are relative to the business world until I was already in big law.

[star fox]

Just to clarify, is your question why people like me, who have to make monthly payments of $3-4k for 10 years, think we're not "living the life" financially with an employer who has a roughly 80% attrition rate by year 5?

I could literally lease a Ferrari for the amount of my monthly payments. Instead I have a roommate in a shitty walkup. You're asking why I don't feel like I'm living the life financially? If I play my cards right, my net worth will be zero in 8-10 years of working 60-80 hour weeks. Is that what you're getting at?

You're like under 30 probably. Who cares about your net worth. Your cash flow is quite high. Your life may suck but get some perspective on your financial situation.