06-10-2003, 12:04 AM
Six or seven figures? Well, the partners sometimes make seven -- according to the American Lawyer's list, the top firms have average pay per partner at around $3 million (Wachtell), it drops off very fast from there, outside of the top 10 firms I'm not even sure if it's $1 million average. (Note that the AmLaw list is average partner pay. Actual figures per partner are not disclosed. Since firms have more junior and more senior partners, the highest-paid can make upwards of $4 or $5 million, while other partners make less than the average).
As for associates, my firm (along with every other big firm in New York, except Skadden) pays 125 starting, and a yearly bonus which varies but may be 10k or 15k. Skadden pays 140 starting, but no bonuses. So it's 6 of one, half a dozen of the other. These numbers aren't any big secret, as they are generally reported in the New York Law Journal, AmLaw, and on sites like findlaw.com.
I don't know anyone's billing rate exactly, but it is widely known that senior partners at top firms bill out at $500-$600 per hour. New associates bill out at $150-200. Everyone else is in between.
The theory is "leverage." A partner cannot earn $3M or $5M a year at a $500 / hour rate. Even if they bill 2500 or 3000 hours, that's 3000 x 500 = $1,500,000.
However, the firms have a ratio of 2.5 or 3 associates per partner.
Associate numbers (ballpark guess):
Salary + bonus 140k
Overhead 70-80k? (Secretary, computer, office, training, bar membership fees, plus absorbed cost of any pro bono).
Total cost maybe 220k (I'm not sure exactly how much overhead is. I've seen numbers but i can't recall them right now).
Billiing at $150 / hour times 2200 hours = $330,000 income.
So, the firm makes $110k on that associate.
Add a few hundred more, rinse and repeat.
(Actually, from what I've read, the training costs are high enough and clients able enough to force billing reductions for new associates that a lot of firms lose money on first-years, they then start earning it back and the 3rd and 4th year associates, and so on, make the most money for those firms).
And, I'm back to work. :(
As for associates, my firm (along with every other big firm in New York, except Skadden) pays 125 starting, and a yearly bonus which varies but may be 10k or 15k. Skadden pays 140 starting, but no bonuses. So it's 6 of one, half a dozen of the other. These numbers aren't any big secret, as they are generally reported in the New York Law Journal, AmLaw, and on sites like findlaw.com.
I don't know anyone's billing rate exactly, but it is widely known that senior partners at top firms bill out at $500-$600 per hour. New associates bill out at $150-200. Everyone else is in between.
The theory is "leverage." A partner cannot earn $3M or $5M a year at a $500 / hour rate. Even if they bill 2500 or 3000 hours, that's 3000 x 500 = $1,500,000.
However, the firms have a ratio of 2.5 or 3 associates per partner.
Associate numbers (ballpark guess):
Salary + bonus 140k
Overhead 70-80k? (Secretary, computer, office, training, bar membership fees, plus absorbed cost of any pro bono).
Total cost maybe 220k (I'm not sure exactly how much overhead is. I've seen numbers but i can't recall them right now).
Billiing at $150 / hour times 2200 hours = $330,000 income.
So, the firm makes $110k on that associate.
Add a few hundred more, rinse and repeat.
(Actually, from what I've read, the training costs are high enough and clients able enough to force billing reductions for new associates that a lot of firms lose money on first-years, they then start earning it back and the 3rd and 4th year associates, and so on, make the most money for those firms).
And, I'm back to work. :(