How much do first year equity partners make? Forum

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How much do first year equity partners make?

Post by Anonymous User » Thu Sep 15, 2022 11:41 pm

I'm at a V50 firm and my understanding is that first year equity partners make just over $1 mil to start. Our PPP is around $3 mil. Is this sort of ratio normal? What have others seen?

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 2:01 am

Image
Anonymous User wrote:
Thu Sep 15, 2022 11:41 pm
I'm at a V50 firm and my understanding is that first year equity partners make just over $1 mil to start. Our PPP is around $3 mil. Is this sort of ratio normal? What have others seen?

Not an equity partner, but that appears higher than average based on anecdotes I’ve heard.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 6:53 am

Anonymous User wrote:
Thu Sep 15, 2022 11:41 pm
I'm at a V50 firm and my understanding is that first year equity partners make just over $1 mil to start. Our PPP is around $3 mil. Is this sort of ratio normal? What have others seen?
I'm at a firm with similar financials and low 7 figures is what I've heard here as well. I also understand after a few years of small bumps it's really hard to break away and make more, even though PPP is obviously much higher.

But I think this varies significantly from firm to firm. For example, I think some of the highly profitable firms that bring you through the NEP ropes for a while before granting equity might start higher, in part because their new EPs are more senior. My firm is all equity.

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Re: How much do first year equity partners make?

Post by Lesion of Doom » Fri Sep 16, 2022 9:23 am

A drunken junior partner at my old v30 told me he started at 850k, but that had been a few years prior. Would guess around 2015.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 9:34 am

I imagine it swings wildly depending on the year right? Like a first year equity partner in 2021 probably made a lot more than a first year equity partner in 2022.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 9:55 am

Anonymous User wrote:
Fri Sep 16, 2022 9:34 am
I imagine it swings wildly depending on the year right? Like a first year equity partner in 2021 probably made a lot more than a first year equity partner in 2022.
A junior partner at the V10 I was at at the time told me his income actually went down in the initial months following making partner. Something both about when the firm actually collects on receivables (heavily weighted toward year's end), and about how the firm records profits on a quarterly basis. Switching from a set salary to a less frequent profit share payout meant he had to go a while with less coming in. Obviously he came out way ahead in the end, but it wasn't instant riches.

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Re: How much do first year equity partners make?

Post by trebekismyhero » Fri Sep 16, 2022 10:47 am

Anonymous User wrote:
Fri Sep 16, 2022 6:53 am
Anonymous User wrote:
Thu Sep 15, 2022 11:41 pm
I'm at a V50 firm and my understanding is that first year equity partners make just over $1 mil to start. Our PPP is around $3 mil. Is this sort of ratio normal? What have others seen?
I'm at a firm with similar financials and low 7 figures is what I've heard here as well. I also understand after a few years of small bumps it's really hard to break away and make more, even though PPP is obviously much higher.

But I think this varies significantly from firm to firm. For example, I think some of the highly profitable firms that bring you through the NEP ropes for a while before granting equity might start higher, in part because their new EPs are more senior. My firm is all equity.
This seems to be correct based on what my friends at different firms are experiencing. For example, I know partners at a V20, which has only equity partnership, starts out first year partners at just over $600k, even though their PPP is around $4m. So even though their equity partners, their initial salary isn't that different from NSPs at Kirkland and others that have two track. The benefit is that you are a real partner and it is much harder to push you out, but comp isn't amazing at the beginning.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 10:55 am

I've been told that the above is correct. You start at X and then for the next 5 or 10 years your draws will increase and then you'll level off outside of you being a rainmaker. So, maybe PPP is $3M and you start at $850K. That would mean that maybe after 5-10 years you're at $1.5M (let's assume no inflation for the point of illustration). From there, you're pretty stuck without becoming a major firm asset.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 11:07 am

Damn... idk if that is worth it tbh

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Re: How much do first year equity partners make?

Post by Wanderingdrock » Fri Sep 16, 2022 12:57 pm

Anonymous User wrote:
Fri Sep 16, 2022 11:07 am
Damn... idk if that is worth it tbh
Depends, I guess. If you're working hard enough to make partner, after you make it you're probably not working that much harder than you already were (though maybe a little differently), but your income is scaling better than any other realistic option for most people in that position. If you value work-life balance more than that, cool (I do), but you're probably not making partner.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 1:49 pm

Wanderingdrock wrote:
Fri Sep 16, 2022 12:57 pm
Anonymous User wrote:
Fri Sep 16, 2022 11:07 am
Damn... idk if that is worth it tbh
Depends, I guess. If you're working hard enough to make partner, after you make it you're probably not working that much harder than you already were (though maybe a little differently), but your income is scaling better than any other realistic option for most people in that position. If you value work-life balance more than that, cool (I do), but you're probably not making partner.
Agreed, it probably depends on the firm but at my firm, the partners (even junior ones) are not really billing the way that you would as a senior associate trying to make partner. Instead, they are supposed to push more work down to associates and their share ratio is better off if they are keeping more in the group busy. It's more supervisory work than grunt work. Now they are having to do more biz dev, which might be a trade off for some.

But if you're making $500k as a senior associate, it definitely seems worth it to double your income and have the kind of job security that comes with making partner.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 2:15 pm

It's worth it to make more money than you were last year, pretty much by definition. It's just that after all the work you out into it, and how hard it is to be in the tiny group that makes the cut, you'd think the pot of gold would be bigger.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 3:15 pm

Obligatory Kirkland & Ellis: $1.5m in a "transitional" year (that the Firm Committee just created last year) and then ~$2.5m minimum shares your first real full year. (Qualifiers: This is probably one of the highest figures in the entire legal industry and also almost no one makes shares at Kirkland anymore.)

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 3:18 pm

Anonymous User wrote:
Fri Sep 16, 2022 2:15 pm
It's worth it to make more money than you were last year, pretty much by definition. It's just that after all the work you out into it, and how hard it is to be in the tiny group that makes the cut, you'd think the pot of gold would be bigger.
One of my consistent experiences with biglaw is everything is worse than it's made out to be. I struggle to think of more than a few examples where something that had been talked about ended up being *better* than it was described.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 3:19 pm

Anonymous User wrote:
Fri Sep 16, 2022 3:15 pm
Kirkland: $1.5m in a "transitional" year (that the first just created last year) and then ~$2.5m minimum shares your first real full year.
I've heard these numbers thrown around, and they almost seem too good to be true. $2.5m is a lot more than lots of partners make even when they get more senior.

That said, don't most people get shares long after the typical election time for firms that don't call their 7th years "partners?" Not to shit on KE (their PPP and growth continues to be impressive), but those folks have some ground to make up for lost time as NEPs.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 3:23 pm

Anonymous User wrote:
Fri Sep 16, 2022 3:19 pm
Anonymous User wrote:
Fri Sep 16, 2022 3:15 pm
Kirkland: $1.5m in a "transitional" year (that the first just created last year) and then ~$2.5m minimum shares your first real full year.
I've heard these numbers thrown around, and they almost seem too good to be true. $2.5m is a lot more than lots of partners make even when they get more senior.

That said, don't most people get shares long after the typical election time for firms that don't call their 7th years "partners?" Not to shit on KE (their PPP and growth continues to be impressive), but those folks have some ground to make up for lost time as NEPs.
They're not too good to be true in the sense that the numbers are real. Kirkland is that rich. The equity spread is about 10:1 meaning there's a range of $2.5m - $25m though like with all firms it's not a uniform distribution there's a lot more people making 3/4/5m than 25m. (But I sometimes lol thinking some lawyer dweeb who went to Hofstra is now making more than most professional athletes--we really are paying some people $20m+, which is just mind-blowing.) Where it's "too good to be true" comes from: 1) most people have to work a long, long time to get equity here, like you'll hear about people getting equity after fifteen+ years in the trenches, which is insane; 2) it's extremely hard to get equity even if you put in the time--part of that is fed by the value of shares which they don't want to just give away; the current favored practice is to deposit people into the permanent purgatory of non-equity partner and string them along for as many years as possible (while billing them out at $1,500 an hour).

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 4:39 pm

First year equity partners at LW make above $2M (and it’s actually possible to make equity there!).

Per the broader discussion above though the range for first year equity comp across firms is wide and often depends on a number of overlapping variables (partnership structure and comp ratio, credit system, practice, etc.)

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 4:44 pm

A few clarifying points:

(1) The spread at KE is 9:1.

(2) Many partners still bill 2,000+ at V10 firms.

(3) There are very few people at KE sitting at the $20 million cap. Most of your Hofstra KE dweebs are making $3-4M and not $20M.

(4) If you want equity AND a life, biglaw isn't for you (it certainly wasn't for me, which is why I left for a boutique).

(5) If you want equity, $$$$$$, and a life, you won't achieve that anywhere outside of a few very unicorn situations.

The best you can realistically dream for is a boutique billing 1600/yr. as an equity partner and making $700k-$1.2M or something like that. You'll hear various unicorn gigs where people make way more or whatever, but just like with law school assume you have the potential of a median biglaw associate and play your cards from there.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 4:46 pm

Anonymous User wrote:
Fri Sep 16, 2022 3:15 pm
Obligatory Kirkland & Ellis: $1.5m in a "transitional" year (that the Firm Committee just created last year) and then ~$2.5m minimum shares your first real full year. (Qualifiers: This is probably one of the highest figures in the entire legal industry and also almost no one makes shares at Kirkland anymore.)
Can you clarify the bolded? Are they keeping on NSPs indefinitely? I thought the structure was 4 years as NSP then up or out, is that no longer true?

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 4:48 pm

LW also has a very large non-equity tier that it pays very well (think $800K-1M), so it can juice up the floor of its equity partnership. Kirkland has similar arrangements, but they are far fewer than at LW. Also, "you can actually get equity there" is pretty flame. Latham's percentage of lawyers who are equity partners = 17.86%
Kirkland's percentage of lawyers who are equity partners = 16.20%. Both are abysmal. More equitable shops like Skadden and Cooley are around 20%. You can still get paid quite well in the mid-law scene at some shops with more like 30-40%. These shops can often actually feel collegial and friendly too, which is a rarity in biglaw, beyond marketing tell you that the passive aggressiveness you're experiencing is actually what collegial and friendly feels like.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 4:50 pm

Anonymous User wrote:
Fri Sep 16, 2022 3:18 pm
Anonymous User wrote:
Fri Sep 16, 2022 2:15 pm
It's worth it to make more money than you were last year, pretty much by definition. It's just that after all the work you out into it, and how hard it is to be in the tiny group that makes the cut, you'd think the pot of gold would be bigger.
One of my consistent experiences with biglaw is everything is worse than it's made out to be. I struggle to think of more than a few examples where something that had been talked about ended up being *better* than it was described.
How about the actual work we do? The expectation I had from everything leading up to it is that it's really hard. But it's not, it's pretty easy actually.

Also this may be Stockholm syndrome but working late nights and weekends sounded like absolutely hell but is totally fine and if anything helps space out 45 hour weeks and kills dead time. (OTOH, I do not enjoy 45+ weeks).

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 4:52 pm

Anonymous User wrote:
Fri Sep 16, 2022 4:46 pm
Anonymous User wrote:
Fri Sep 16, 2022 3:15 pm
Obligatory Kirkland & Ellis: $1.5m in a "transitional" year (that the Firm Committee just created last year) and then ~$2.5m minimum shares your first real full year. (Qualifiers: This is probably one of the highest figures in the entire legal industry and also almost no one makes shares at Kirkland anymore.)
Can you clarify the bolded? Are they keeping on NSPs indefinitely? I thought the structure was 4 years as NSP then up or out, is that no longer true?
Their point is that very few people go "up" in the "up or out" model at KE. KE brings in a shit ton of lateral partners. Even in a massive group like Executive Comp, which is 60+ attorneys at this point, they'll make 1 internal SP every few years. Most SPs at KE seem to lateral over after getting equity elsewhere. I'm sure if you're a corporate superstar who dedicates his or her life to the firm for 9 years you'll have a shot, but otherwise you're "out."

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 5:01 pm

Anonymous User wrote:
Fri Sep 16, 2022 4:48 pm
LW also has a very large non-equity tier that it pays very well (think $800K-1M), so it can juice up the floor of its equity partnership. Kirkland has similar arrangements, but they are far fewer than at LW. Also, "you can actually get equity there" is pretty flame. Latham's percentage of lawyers who are equity partners = 17.86%
Kirkland's percentage of lawyers who are equity partners = 16.20%. Both are abysmal. More equitable shops like Skadden and Cooley are around 20%. You can still get paid quite well in the mid-law scene at some shops with more like 30-40%. These shops can often actually feel collegial and friendly too, which is a rarity in biglaw, beyond marketing tell you that the passive aggressiveness you're experiencing is actually what collegial and friendly feels like.
Correct there is a non equity tier for LW though I would note that those partners actually do get some equity and have a full voting share, you can make equity straight from associate at LW, and the range in comp for non equity actually goes up much higher (more like $1.5M as I understand it). Regarding making equity, looking at the percentage of equity partners isn’t the only question, it’s also about how many of those equity partners come from the associate or non-equity ranks (as opposed to lateral equity partners). That rate is much higher at LW than KE.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 5:18 pm

Anonymous User wrote:
Fri Sep 16, 2022 4:44 pm
A few clarifying points:

(3) There are very few people at KE sitting at the $20 million cap. Most of your Hofstra KE dweebs are making $3-4M and not $20M.
Cap is beyond $20m now.

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Re: How much do first year equity partners make?

Post by Anonymous User » Fri Sep 16, 2022 8:24 pm

Anonymous User wrote:
Fri Sep 16, 2022 4:44 pm
A few clarifying points:

(1) The spread at KE is 9:1.

(2) Many partners still bill 2,000+ at V10 firms.

(3) There are very few people at KE sitting at the $20 million cap. Most of your Hofstra KE dweebs are making $3-4M and not $20M.

(4) If you want equity AND a life, biglaw isn't for you (it certainly wasn't for me, which is why I left for a boutique).

(5) If you want equity, $$$$$$, and a life, you won't achieve that anywhere outside of a few very unicorn situations.

The best you can realistically dream for is a boutique billing 1600/yr. as an equity partner and making $700k-$1.2M or something like that. You'll hear various unicorn gigs where people make way more or whatever, but just like with law school assume you have the potential of a median biglaw associate and play your cards from there.
At least regarding (2), I've worked at two V10 firms and in both cases the partners routinely billed more than 2,000 hours.

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