Sara Randazzo’s Wall Street Journal article about pay and structure differences at big law firms has been getting a lot of attention. The article is a masterpiece and is a must read for people interested in how big firms operate.
This is the first of multiple posts about the issues the article raises.
Four hundred of Kirkland & Ellis LLP’s top lawyers gathered in May at an oceanfront resort in Southern California to toast another banner year.
Kirkland was the highest-grossing law firm in the world for the second year running, earning $3.76 billion in revenue. When a slide flashed on the screen, showing the value of the firm’s shares, the partners in the room quickly did the math. They would be taking home $1.75 million to $15 million.
Not invited were another 560 partners, who were back at the firm’s 15 offices around the world, working. Though outwardly carrying the same title as those lounging poolside in California, they hold no equity in the firm and generally can expect to make $800,000 at most. While a comfortable living, the salary and its implied second-class status is not the reward many expected after striving to join the venerated partnership.
This is life at the modern law firm, where not all partners are created equal, and data and money rule.
Boo freaking hoo. No one feels sorry for those non-equity partners except themselves.
Anyone making $800,000 a year to practice law should be thrilled. There are thousands of great lawyers who don’t make a quarter that.
Why would a lawyer making $800,000 feel like a second-class citizen? Because someone down the hall makes even more. For the envious, it’s more about wanting others to make less than them making more.
Most would never admit this, of course. But a few would.
A problem for big law firms is that most of the attorneys don’t know how good they have it.
I’ve had this discussion with a lot of former big law firm attorneys like myself. We hate listening to big firm lawyers bitch about their firm. We don’t think they would be so unhappy if they had experience operating a solo or small firm practice where not only are there no salaries for the owner(s), but you can lose money.
Most non-equity partners have it great. Yes, they have to work a lot of hours and endure the firm bureaucracy. It’s a fair trade.
Rainmakers provide the fuel that keeps the machine running. At most firms, rainmakers will be the highest paid because they are the hardest to replace. It might even be impossible. That’s just reality.
Congratulations to the lock-step firms. It’s a great model. But it would never work for everyone. I’ll have more to say on this topic in a future post.