Certain firms are, in my opinion, routinely underrated in the Vault 100 rankings of law firm prestige. One of them is Williams & Connolly, currently #16, which strikes me as a top 10 firm. Another is Munger Tolles & Olson, which is all the way down at #34.

Munger is an amazing firm. Its attorneys work on major matters, including great pro bono cases, and its lawyers boast incredible pedigrees, with more Supreme Court clerks than you can shake a gavel at (wooed by $300,000 signing bonuses). At the same time, MTO gets top scores for diversity. These commitments to diversity and pro bono helped propel Munger to the #1 spot in the American Lawyer’s A-List rankings, which measure overall firm fabulosity (based on revenue per lawyer, pro bono work, attorney diversity, and associate satisfaction).

In light of all this, I’m still wondering why Munger doesn’t fare better in the Vault rankings (for whatever the Vault rankings are worth, and you’re free to argue about that). Perhaps MTO is hurt by its relatively small size and tight geographic focus, with offices in just two cities, Los Angeles and San Francisco. Or perhaps prestige is tied partly to partner profit, and Munger doesn’t hunger enough for money.

How much do MTO partners earn? Financial disclosures for two younger Munger partners, both nominated to the Ninth Circuit, shed a little light on this question….

Here’s a report from the National Law Journal:

The Los Angeles-based Munger Tolles reported $1.56 million in profits per partner in 2012, which ranked them No. 39 in that category on the Am Law 200, NLJ affiliate The American Lawyer’s annual survey of law firm revenues.

The two nominees – John Owens in Los Angeles and Michelle Friedland in San Francisco – each disclosed compensation of about half of that amount, according to records filed with the Senate Judiciary Committee. President Obama nominated them for openings on the court on August 1.

Now, PPP of $1.6 million is nothing to scoff at, but it’s not crazy-high by Biglaw standards either. It gets Munger to #39 in the Am Law 200 ranked by profits per partner. MTO founding partner Charlie Munger might be worth $1.2 billion, but he made his fortune through investing (with the likes of Warren Buffett), not from the practice of law.

John Owens and Michelle Friedland might not have broken seven figures a year during their time at Munger, but they certainly have million-dollar résumés:

Owens and Friedland both graduated from Stanford Law School, clerked for a U.S. Supreme Court justice and are about the same age — Owens was born in 1971, Friedland in 1972. But they have taken different paths to becoming litigation partners at Munger.

John Owens graduated from Stanford Law School in 1996, finishing first in his class; clerked for Judge J. Clifford Wallace on the Ninth Circuit, followed by Justice Ruth Bader Ginsburg (an interesting combo, since Judge Wallace tended to feed more to the conservatives); and worked as a federal prosecutor for more than a decade. He joined MTO in January 2012.

Michelle Friedland graduated from Stanford Law School in 2000, finishing second in her class; clerked for Judge David Tatel on the D.C. Circuit, followed by Justice Sandra Day O’Connor (again, interesting combo, since Tatel Tots tend to clerk for more-liberal justices); and taught at Stanford Law as a lecturer for two years. She joined MTO in 2004 and became partner in 2010.

Now, on to what you’ve been waiting for, the money numbers:

John Owens

Firm compensation in 2012: $840,845
Firm compensation in 2013 (partnership draw, as of 8/6/2013): $310,000
Firm capital account value: $34,516
Primary residence value: $826,000
Net worth: $2.5 million

Owens’s compensation from last year, a shade over $800K, is in line with what one would expect for a junior partner at a firm with $1.6 million in average PPP. His 2013 draw of about $300K shows how partners need to be financially prudent, given that much of their compensation comes in big clumps after collections ramp up late in the year.

The capital account value is modest. Compare it to Jeh Johnson’s Paul Weiss capital account before he became general counsel to the Defense Department ($200,000), Eric Holder’s Covington capital account before he became attorney general (between $500,000 and $1 million), and Mary Jo White’s Debevoise capital account before she became SEC chair (between $500,000 and $1 million).

Owens’s net worth is robust. He spent most of his career as a federal government lawyer, with less than two years in private practice, and yet has has a net worth of $2.5 million — more than several Supreme Court justices. Perhaps he has some family money? Owens is a nice WASPy surname.

Michelle Friedland

Firm compensation in 2011: $630,438
Firm compensation in 2012: $765,942
Firm compensation in 2013 (partnership draw, as of 8/2/2013): $252,500
Firm capital account value: $65,680
Securities holdings value: $4.6 million
Net worth: $6.3 million

Friedland’s compensation is also in line with what one might expect. She earned a little less than John Owens last year, but it’s worth noting that he has a few years of seniority on her (1996 graduation versus 2000 graduation), meaning that he’d be entitled to more money in a pure lockstep system. In a non-lockstep system, the gap might be explainable by the need to woo Owens from the U.S. Attorney’s Office, assuming multiple firms were courting him to join in 2012.

Her securities holdings are impressive, at $4.6 million. What stocks does she own? I’d like to know, since she seems to have some investing prowess. Of course, if she gets confirmed, big stock holdings can be a pain due to recusals; query whether she might unload some securities at that point.

Friedland’s net worth is delicious. It’s not exactly Mary Jo White’s $16 million, but it’s higher than the $4.3 million of Katherine Forrest, the former Cravath partner who’s now a judge on the S.D.N.Y. And Friedland — born in 1972, so 41 at some point this year — is younger than both Forrest and White (49 and 65, respectively).

On the other hand, both Forrest and White enjoy amazing retirement benefits — $380,000 a year in Forrest’s case, and $500,000 a year in White’s case (paid out in a lump sum to White to cover the next few years, to avoid conflicts of interest for her at the SEC). It looks like Friedland (and Owens) won’t enjoy such bounty. This is from Friedland’s response to question 20 of the Senate Judiciary Committee questionnaire:

Ouch. Well, on the bright side, at least Munger Tolles will never be saddled with expensive obligations to retired partners. And boy Dewey know how that can hurt a firm’s financials.

Leaving Munger for the federal bench will certainly slow the growth in net worth for both Owens and Friedland. But considering that they’re both already millionaires and that their next jobs, assuming confirmation, carry six-figure salaries, lifetime tenure, and generous retirement benefits, they don’t need to fret about their finances. You’ll never see them doing doc review for $17 an hour.

Congratulations to John Owens and Michelle Friedland, on both their magnificent legal careers and net worths, and good luck to them during the confirmation process.

Munger Partners, Up for Ninth Circuit, Disclose Pay [National Law Journal (sub. req.)

Earlier: 2014 Vault Law Firm Rankings: Which Firm Is The Most Prestigious In The Land?
It’s Official: Supreme Court Clerkship Bonuses Hit A New High
The Best Law Firms for Diversity (2014)
Best in the Biglaw Show: The 2013 Am Law A-List


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