The New Partner Payday Gold Standard: $20 Million
The partner compensation game has changed.
Twenty million dollars is a lot of money for a lawyer (or anyone, tbh) to make in a year. Yes, even for very talented Biglaw types. But that benchmark is becoming increasingly common due to the pressure coming from the very top of Biglaw.
Simpson Thacher recently made headlines for deciding to keep up with the Kirklands, Lathams, and Paul Weisses of Biglaw. That is, increasing the top of their pay scale to the $20M benchmark, because as Alden Millard, chair of the firm’s executive committee, said, they “intentionally made the decision to adjust our compensation structure to attract and retain the best talent across our global platform.”
Those moves have a knock-on effect throughout Biglaw. As Peter Zeughauser, chair of the Zeughauser Group, told Law.com, “This is reverberating throughout the Am Law 200, getting more money into the hands of top performers, particularly young top performers, who wouldn’t get as much under a typical tier system.”
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And the demand for these top partners keeps on growing — along with their books of business, as Kristin Stark, a principal at consulting firm Fairfax Associates, says, “What’s enabling firms to pay this much money is there’s so much demand for services and those individuals have been able to capitalize on that and triple and quadruple the size of their books, which were already large to start with.”
So that’s why we see Davis Polk leader Neil Barr saying, “While we have not always prioritized the lateral market, this is a tremendous opportunity for us. So we will be leaning into the market to try and advance our strategic objectives.” And Weil Gotshal is revising criteria for partner compensation. Even Cleary Gottlieb — once the poster child for lockstep partner compensation — has reportedly backed off of that standard.
The biggest and richest Biglaw firms are increasingly the only ones that can compete for the largest rainmakers in the hottest and most lucrative practice areas. Yeah, the stratification between the Biglaw haves and have-nots is only going to get worse.
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Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @Kathryn1@mastodon.social.
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