Today, The Legal Times asks “Are Senior Associates Making More Than Junior Partners?”
Answer: sometimes, particularly if the firm has a nonequity partnership tier.
Here’s the math, using Arent Fox as an example:
“[S]enior associates can earn as much as $280,000 in base salary and—if they meet targets for generating business—an additional $100,000 in bonuses. Total: $380,000. First-year nonequity partners start off with a pay rate of $310,000. But they subtract $20,000 to cover their own benefits. Their total: $290,000.”
So: what exactly is the point of being a non-equity partner—so you can have your name on the letterhead? Do firms even still put the partners' names on the stationery? (See bloggy discussion of this strange state of affairs here and here.)
This really isn’t an example of that perennial bugbear ‘compression’—it’s more like ‘inversion.’ It’s an extreme manifestation of the fact that, as The Legal Times puts it, “[T]he market determines associate salaries, but profits determine partner pay. And the two don't always match up.”
I don't think it is an especially bold prediction to say that soon, all this will be seen as a temporary glitch in BigLaw's natural order.
- posted by brian
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