Rich People

Is Biglaw all about the benjamins?

Is being a partner that different from being an associate? Contrary to popular belief, becoming a law firm partner is not a path to instant riches. In the early years, your compensation might not be that much higher than it was when you were an associate or counsel. Your taxes might go up, you might have to pay for your own health insurance and other benefits, and you might have to buy into the partnership. Sure, you might be able to borrow the capital contribution from a bank — but remember, you’re liable on that loan, and the bank might pursue you if it doesn’t get repaid.

Our partner readers sometimes complain about the stereotype that they’re all fat cats. As one of them recently wrote, “[Please don't write] about being admitted to partnership and instantly becoming rich…. At virtually every firm, you become a partner and then start to hope that, over the course of a career, your income will increase to ‘average partner income’ and your hours will decrease to ‘average partner hours.’ Rainmakers reach that goal quickly, but many partners — perhaps a majority in most firms — spend a lifetime waiting for, and never reaching, those goals.”

Of course, that’s the subjective experience of one reader. What does the big picture show? There’s a new report out about partner pay that contains lots of interesting information….

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If the mountain will not come to Muhammad, then Muhammad must go to the mountain. Or Muhammad will just buy the mountain — for $18 million.

Check out our latest Lawyerly Lair. It features a 10,000-square-foot mansion, a 2,500-square-foot guesthouse, 48 acres of land, 13 formal gardens, a one-acre pond (with bridge), a swimming pool and spa….

And its own mountaintop. Did we mention the mountaintop?

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Once you pay for a house, a car and child care, it’s not that much money. You feel like regular middle-class people.

Stefan Baugh, a former Katten Muchin Rosenman partner, who quit his job to start a private equity firm and make more money.

(Baugh gives more explanation of his #firstworldproblems, after the jump…)

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Don’t you just hate it when rude and inefficient airline administrators ruin your vacation by stranding you on the ski leg of your vacation in Aspen, causing you to almost miss your cruise leaving out of Florida? It’s so annoying to have to stay in a series of luxury hotels across the country because the airline industry can’t get its act together.

I’m doing a silly parody of rich people problems, but honestly, if I have to choose between well-offf Americans and the fools and crooks who run the airline industry, I’m going to throw my lot in with the rich people every time. Especially when some employees are allegedly hurling racial insults at them.

It was a wild holiday vacation for the the Shulick family of Philadelphia. Luckily, patriarch David Shulick is a lawyer, so he knows that when the airlines push you around, you can sue….

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John B. Quinn, founding partner of Quinn Emanuel, is one of our favorites here at Above the Law. We like people who have personality.

We also like people who are so rich they just don’t give a f**k. Quinn seems to have gotten to the point where he can legitimately start a Twitter account called “rich people problems.”

We have evidence of his tribulations from the the San Francisco reception desk of Quinn Emanuel….

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Ed. note: This post is by Will Meyerhofer, a former Sullivan & Cromwell attorney turned psychotherapist. He holds degrees from Harvard, NYU Law, and The Hunter College School of Social Work, and he blogs at The People’s Therapist. His new book, Way Worse Than Being A Dentist, is available on Amazon, as is his previous book, Life is a Brief Opportunity for Joy (affiliate links).

As The People’s Therapist, my door is always open. I don’t turn away poor clients.

“Pay whatever you can afford,” I tell them.

Naturally, they get what they pay for. If I’m a little sleepy, or staring at the clock – who are they to complain? Come to think of it, why do we have to talk about them all the time anyway….

Just kidding.

But let’s be real — are things any different with the the high-fidelity first-class traveling set than they are with folks flying “comfort class”? I ask myself that question a lot. I do it to stay honest….

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Some J.D. holders are swimming in money.

For some holders of the Juris Doctor degree, “J.D.” has depressing meanings: Just Debt, Job Disabled, Justifiably Depressed.

But for others, “J.D.” stands for something happier: Just Dollars. Lots and lots and lots of them.

Partners at large law firms do quite well for themselves. So do general counsel at major corporations.

But they are pikers compared to members of the Forbes 400, the annual list of the 400 richest Americans prepared by Forbes magazine. The 2011 list has been issued — and it contains a number of lawyers and law school graduates….

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And now is the time on Above the Law where Elie gets to say “I told you so.”

About five months ago, I mentioned on this site that making $250,000 a year does not make you rich. People got angry with me for saying that. In the comments and around the internet. Apparently stating an obvious fact in a society that is dealing with a widening gulf between the haves and have-nots is controversial.

But at least I confined my financial musings to people in the six-figure range. A new report from Fidelity Investments says that people who are sitting on seven figures of wealth don’t feel rich until they have about $7.5 million.

[Throat-clearing noise.]

I TOLD YOU SO….

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Late last night, Congress passed a compromise tax bill that will, among other things, cap the estate tax at 35% (with a $5 million exemption). If not for this compromise, the estate tax would have returned in 2011, at rates as high as 55 percent (with a $1 million exemption).

Hallelujah. Anytime you can save wealthy dead people millions of dollars during a time of crushing federal deficits, that’s something you just have to do. Way to go, Obama. When I voted for you in 2008, really I was just trying to vote for four more years of Bush’s ruinous fiscal policies.

Obama isn’t just saving money for all the dauphins eager to get their hands on their inheritances; he could be saving lives. Duke Law professor Richard Schmalbeck apparently thinks that rich old people might have killed themselves in droves over the next two weeks. Schmalbeck suggests that after spending a lifetime working hard and earning money, hundreds “or even a few thousand” of the aging rich might have committed suicide in the waning days of 2010, in order to pass on as much of their money to their children as they can before the estate tax returns in 2011.

I shudder to think that somebody would commodify their own life in such a way. But then again, I’m not rich. Maybe you only get rich in this country by being the kind of person who would gladly kill yourself if the price is right…

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If you’re going to generate million-dollar fees, you’re going to need million-dollar clients. And in New York, the self-proclaimed center of the universe, America’s millionaires come to live and mingle. So says the Metro Wealth Index, which has completed its annual report on high-net worth individuals:

New York City continued to top the Index and had more [high-net worth individuals] than the next top three [metropolitan statistical areas] – Los Angeles, Chicago and Washington, D.C. – combined.

The power might have shifted to Washington, the glitz might be in L.A., and the coronary disorders might be in Chicago — but New York still has the money. Lots of it.

And with money comes jobs and clients. Right?

What other cities around the country are faring well in terms of the millionaire count?

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(And what about other cities?)

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