How much, exactly, does being a Kirkland NSP suck? Forum

[Anonymous User]

Imagine that you are a K&E 4th year in a no-income tax state.

How much, exactly, will you be behind "associates" at the firm across the street if they make you a "partner" in a couple years ?

There's tons of anecdotes in the Kirkland Megathread about paying blended taxes (up from your state's zero), paying for healthcare, paying for accountants, etc. But no one gives hard numbers or (better yet) the formulas that determine them. Would be so helpful if anyone can lay out the math.

[Anonymous User]

Imagine that you are a K&E 4th year in a no-income tax state.

How much, exactly, will you be behind "associates" at the firm across the street if they make you a "partner" in a couple years ?

There's tons of anecdotes in the Kirkland Megathread about paying blended taxes (up from your state's zero), paying for healthcare, paying for accountants, etc. But no one gives hard numbers or (better yet) the formulas that determine them. Would be so helpful if anyone can lay out the math.

My numbers are a bit dated (before some of the most recent raises) and rounded for anonymity, and I'm in a state with income tax, and I have some investments/real estate stuff in here, but here you go:

Last year of associate total income: 432,000
First year of NSP total income: 468,000

Last year of associate AGI: 428,000
First year of NSP AGI: 425,000

Last year of associate total taxes: 124,000
First year of NSP total taxes: 142,000

So yeah, it sucks.

[Anonymous User]

Maybe it's because it's all so distant and abstract to me as a junior. But if you were to ask me where I'd rather be in 5 years, I'd pick making 450 with a title of partner over 500 as an associate. I see a lot of KE junior partners who lateral over to other firms as partner, or get in house jobs that are better than associates do.

[Anonymous User]

Maybe it's because it's all so distant and abstract to me as a junior. But if you were to ask me where I'd rather be in 5 years, I'd pick making 450 with a title of partner over 500 as an associate. I see a lot of KE junior partners who lateral over to other firms as partner, or get in house jobs that are better than associates do.

I don't necessarily doubt this, but isn't there a point where the "game is up", so to speak? As in, other firms and companies seeking in-house attorneys will know that most NSPs are just senior associates, and adjust in their hiring accordingly?

[Anonymous User]

I'll answer the title question: it sucks so much to be a Kirkland NSP that a whole bunch of us (in NY office) who are senior associates are thinking hard about lateraling to another firm just to avoid the terrible income/tax/limbo purgatory that is Kirkland NSP. It's shameful how much the SPs profit off of seniors/NPPs breaking our backs for them and for them to be so stingy towards us.

[Anonymous User]

I'll answer the title question: it sucks so much to be a Kirkland NSP that a whole bunch of us (in NY office) who are senior associates are thinking hard about lateraling to another firm just to avoid the terrible income/tax/limbo purgatory that is Kirkland NSP. It's shameful how much the SPs profit off of seniors/NPPs breaking our backs for them and for them to be so stingy towards us.

But at least you still have the prestige...

[Anonymous User]

I'm a New York NSP but lateraled from one of the NY-based lockstep firms. I think the "suck" is most acute the first year.

Most obvious is comp. The hit to take-home comp is real and there's no opportunity for "upside" as an NSP 1. We're paid the 7th year scale and our "rankings" all reset at 3 for the first year (i.e., none of us are eligible for a 1 or 2 no matter how good we are). So the only path to make a higher bonus is to bill more hours, which largely isn't worth it. Starting NSP 2 and 3, people can start to break out in comp which helps blunt the hit on tax/benefits - either we're on track for shares or highly-valued NST so our comp goes up. So those of us who are gunning for shares are still grinding and taking on more deals, which translates to higher hours, in exchange for less take-home pay and a standard bonus. The attitude around here is that the NSPs that want a long-term future here will suck it up and those that don't will leave.

The less obvious but probably more important is that "the market" doesn't really view you as a partner yet. NSP 2s and 3s have way more experience running deals that they can leverage into equity (or accelerated equity) at other firms. Don't have that yet as an NSP 1, so you're still largely regarded as a 7th year associate both internally and externally. This should solve itself over time if you can endure the work-more-for-less-money bit...

In sum, it forces you to decide if you want to be an equity partner here or somewhere else.

[Anonymous User]

What are the numbers that show a decrease in comp from 6th year associate to first year NSP? I'm not seeing that anywhere here.

Also does it really compare unfavorably to 7th year associate at another firm?

[Anonymous User]

What are the numbers that show a decrease in comp from 6th year associate to first year NSP? I'm not seeing that anywhere here.

Also does it really compare unfavorably to 7th year associate at another firm?

First, your health insurance is no longer subsidized by the firm, so that expense increases. Second, you're required to pay for malpractice, pull out an additional insurance / umbrella policy. Third, depending on where you live, the PTET hit can be large. Fourth, beginning NSP 1, the firm deducts ~$20k from your 401k and deposits it into a retirement vehicle, which increases to ~$40k the following 2 years. Last, you're pretty much forced to hire an accountant, which is another couple K.

Also, you're required to make estimated tax payments every quarter--not necessarily a hit, but for me, I largely deferred paying taxes until the end of the year out of my bonus to have a higher monthly cash flow, so this really makes a difference.

I'm probably missing something, but yes, its a meaningful difference. On a cash flow basis, I was better off as a 6th year.

[Anonymous User]

What is PTET and how is it calculated?

[Anonymous User]

I'm a New York NSP but lateraled from one of the NY-based lockstep firms. I think the "suck" is most acute the first year.

Most obvious is comp. The hit to take-home comp is real and there's no opportunity for "upside" as an NSP 1. We're paid the 7th year scale and our "rankings" all reset at 3 for the first year (i.e., none of us are eligible for a 1 or 2 no matter how good we are). So the only path to make a higher bonus is to bill more hours, which largely isn't worth it. Starting NSP 2 and 3, people can start to break out in comp which helps blunt the hit on tax/benefits - either we're on track for shares or highly-valued NST so our comp goes up. So those of us who are gunning for shares are still grinding and taking on more deals, which translates to higher hours, in exchange for less take-home pay and a standard bonus. The attitude around here is that the NSPs that want a long-term future here will suck it up and those that don't will leave.

The less obvious but probably more important is that "the market" doesn't really view you as a partner yet. NSP 2s and 3s have way more experience running deals that they can leverage into equity (or accelerated equity) at other firms. Don't have that yet as an NSP 1, so you're still largely regarded as a 7th year associate both internally and externally. This should solve itself over time if you can endure the work-more-for-less-money bit...

In sum, it forces you to decide if you want to be an equity partner here or somewhere else.

Mostly correct, but one thing I'll add is that it's not as though an NSP 1 can just "decide" to grind it out for a few years and then make shares; lots of NSPs can't do that because the firm isn't willing to make them SPs even if they were willing to grind it out for another 3, 4, 5 years. They'll hide behind phrases like "market drivers" or "business decisions" whether to promote an NSP to SP, but, at least for litigation anyway, your chances are very slim even if you grind more and more once you get NSP.

The system is basically designed just like the rest of Big Law in that as a pyramid, it weans people out as you get more senior. K&E has proven through its actions moreso than its words that it doesn't care all that much about homegrown talent; it'll chew you up, pay you .1% over market so that it can say it has "above market comp," and then have you leave once you're an early NSP and lateral in partners as needed. There's really no incentive to stay through NSP years, which is why so many of us are looking at different options once we're at this stage.

[Anonymous User]

I'm a New York NSP but lateraled from one of the NY-based lockstep firms. I think the "suck" is most acute the first year.

Most obvious is comp. The hit to take-home comp is real and there's no opportunity for "upside" as an NSP 1. We're paid the 7th year scale and our "rankings" all reset at 3 for the first year (i.e., none of us are eligible for a 1 or 2 no matter how good we are). So the only path to make a higher bonus is to bill more hours, which largely isn't worth it. Starting NSP 2 and 3, people can start to break out in comp which helps blunt the hit on tax/benefits - either we're on track for shares or highly-valued NST so our comp goes up. So those of us who are gunning for shares are still grinding and taking on more deals, which translates to higher hours, in exchange for less take-home pay and a standard bonus. The attitude around here is that the NSPs that want a long-term future here will suck it up and those that don't will leave.

The less obvious but probably more important is that "the market" doesn't really view you as a partner yet. NSP 2s and 3s have way more experience running deals that they can leverage into equity (or accelerated equity) at other firms. Don't have that yet as an NSP 1, so you're still largely regarded as a 7th year associate both internally and externally. This should solve itself over time if you can endure the work-more-for-less-money bit...

In sum, it forces you to decide if you want to be an equity partner here or somewhere else.

Mostly correct, but one thing I'll add is that it's not as though an NSP 1 can just "decide" to grind it out for a few years and then make shares; lots of NSPs can't do that because the firm isn't willing to make them SPs even if they were willing to grind it out for another 3, 4, 5 years. They'll hide behind phrases like "market drivers" or "business decisions" whether to promote an NSP to SP, but, at least for litigation anyway, your chances are very slim even if you grind more and more once you get NSP.

The system is basically designed just like the rest of Big Law in that as a pyramid, it weans people out as you get more senior. K&E has proven through its actions moreso than its words that it doesn't care all that much about homegrown talent; it'll chew you up, pay you .1% over market so that it can say it has "above market comp," and then have you leave once you're an early NSP and lateral in partners as needed. There's really no incentive to stay through NSP years, which is why so many of us are looking at different options once we're at this stage.

If you have what it takes to become an SP (legal talent, ability to generate revenue, etc.) you will make it. Of course just grinding it out is not enough to make equity at a place where PPP is $7 million. The firm might say things like that just to protect your bruised ego but ultimately it is a business decision feelings be damned. You'd be naive to think otherwise.

[Anonymous User]

I'm a New York NSP but lateraled from one of the NY-based lockstep firms. I think the "suck" is most acute the first year.

Most obvious is comp. The hit to take-home comp is real and there's no opportunity for "upside" as an NSP 1. We're paid the 7th year scale and our "rankings" all reset at 3 for the first year (i.e., none of us are eligible for a 1 or 2 no matter how good we are). So the only path to make a higher bonus is to bill more hours, which largely isn't worth it. Starting NSP 2 and 3, people can start to break out in comp which helps blunt the hit on tax/benefits - either we're on track for shares or highly-valued NST so our comp goes up. So those of us who are gunning for shares are still grinding and taking on more deals, which translates to higher hours, in exchange for less take-home pay and a standard bonus. The attitude around here is that the NSPs that want a long-term future here will suck it up and those that don't will leave.

The less obvious but probably more important is that "the market" doesn't really view you as a partner yet. NSP 2s and 3s have way more experience running deals that they can leverage into equity (or accelerated equity) at other firms. Don't have that yet as an NSP 1, so you're still largely regarded as a 7th year associate both internally and externally. This should solve itself over time if you can endure the work-more-for-less-money bit...

In sum, it forces you to decide if you want to be an equity partner here or somewhere else.

Mostly correct, but one thing I'll add is that it's not as though an NSP 1 can just "decide" to grind it out for a few years and then make shares; lots of NSPs can't do that because the firm isn't willing to make them SPs even if they were willing to grind it out for another 3, 4, 5 years. They'll hide behind phrases like "market drivers" or "business decisions" whether to promote an NSP to SP, but, at least for litigation anyway, your chances are very slim even if you grind more and more once you get NSP.

The system is basically designed just like the rest of Big Law in that as a pyramid, it weans people out as you get more senior. K&E has proven through its actions moreso than its words that it doesn't care all that much about homegrown talent; it'll chew you up, pay you .1% over market so that it can say it has "above market comp," and then have you leave once you're an early NSP and lateral in partners as needed. There's really no incentive to stay through NSP years, which is why so many of us are looking at different options once we're at this stage.

If you have what it takes to become an SP (legal talent, ability to generate revenue, etc.) you will make it. Of course just grinding it out is not enough to make equity at a place where PPP is $7 million. The firm might say things like that just to protect your bruised ego but ultimately it is a business decision feelings be damned. You'd be naive to think otherwise.

I'm the NY NSP. Ideally someone gets cues that they're being groomed for shares -- the right mentors will make sure you get the right staffing and promote you to other corners of the firm. But agree it's never about just grinding. Lots of things have to go right, particularly how your practice fits in with the market outlook. But ultimately i think the NSP system is the worst for people who are in the "let's see how this goes" camp. If you're not heading for the exit and not ready to throw your hat into the ring, floating in NSP purgatory (more hours, less pay, derision from peers at equity-only shops) is going to feel shittier

[Anonymous User]

Do fleeing K&E 7th years get "demoted" back to associate at their new firms, or do they tend to wind up "counsel" or fake partner again? Wondering if theyre able to bring themselves to let go of the title.

[Sackboy]

Do fleeing K&E 7th years get "demoted" back to associate at their new firms, or do they tend to wind up "counsel" or fake partner again? Wondering if theyre able to bring themselves to let go of the title.

I've seen many go back to being associates. Fake partner and counsel do happen, but I'd say the associate "demotion" is more common. Few firms are willing to budget on their internal timelines just because you came from a firm that has a different one.