“This is a new phenomenon,” said Suzanne Kane, a San Francisco-based partner at recruitment firm Macrae Inc. I think we will. They say they will. In other cases, an annual salary is paid in conjunction with one of the other compensation models on this list. Most law firm partners don`t expect pandemic-related pay drops – Report But what about the high end of the profession? In this article, we look at the compensation of the 100 highest-paid general counsel compared to partners in large law firms (measured by earnings per partner). We find that a partnership with participation on a cash remuneration basis is more lucrative than a general counsel. But the story is more complicated when you factor in stock options. The average compensation of all partners was $675,000 The General Counsel Compensation Survey ranks General Counsel based on total cash compensation. The top 100 highest-paid GCs received an average total compensation of $2.42 million. We don`t know how much the top 100 highest-paid partners earned during the comparison period, but we can say that the top law firm in Am Law ranking – Wachtell – had 85 participating partners and a profit per partner of $6.33 million. The above comparisons mask some important factors.
Internally, it is important to note that the highest paid attorneys general receive a significant portion of their compensation in the form of equity. By factoring in stock options, some general counsel roles become much more attractive. For example, if you look at the 2020 surveys, when stock compensation is taken into account, the number of general counsel who exceed Wachtell`s earnings per partner jumps from two to 41. And some of the attorneys general have total compensation that would exceed even the highest-paid rainmaker. For example, Chewy GC Susan Helfrick received a total compensation of $30.3 million (including less than $1 million in cash). Kate Adams, Apple`s GC, received $3.56 million in cash compensation, but her total compensation was $25.2 million. What about earnings growth over this ten-year period? Who did better from a growth perspective: the Top 100 General Counsels or the partnership of Top-Am law firms? The following table shows the results, sorted by growth rate. The law firms in the table were among the top 10 law firms in the 2010 edition of the Am Law 200. We see legal counsel in the middle of the pack, outpacing some partnerships and lagging behind others. I work in an Amlaw 100 company.
My information is not very current, but a few years ago, the lowest paid partner was making about $750,000 and the highest was about $5 million, I believe. We are not a company where numbers go crazy. The report is based on survey responses from 1,815 partners in the U.S. between May 5 and July 18 of this year. PPP is a fairly good estimate of the average. But the difference between the lowest paying partner and the highest paid partner can be quite dramatic. Becoming a partner has tantalizing perks – and the exorbitant salary is one of them. The exact amount that partners earn at large law firms depends on the type of partner they are and the compensation plan they have accepted. The average time billed by partners reached 1,721 hours, “a full week” more than the 1,680 billable hours reported by the survey in 2020, Lowe said.
Unbilled time has decreased compared to the last survey. Part of membership is also accepting a buyback plan. He plans ahead for each situation in which the partner is downgraded. Their shares in the company are usually distributed to the remaining partners and their salary is renegotiated. To own part of the business, a new partner must acquire an interest in the business. It is a way of rewarding partners for maintaining their partner status by increasing compensation each year they stay. It follows the same thought process as tenure. Buyback amounts are not public documents, but according to JD Supra, they can often be so high that some companies offer loans to promising partners so they can cover the costs. Note: Payroll may appear to be incorrect in years when base salary has increased. We have implemented the “Total” column to prorate the total amount paid to an affiliate based on the portion of the year it was paid under the previous salary range and the portion of the year in which it was paid under the updated salary range. Inflation data are from the Bureau of Labor Statistics` CPI Inflation Calculator and are updated in October of each year. Annual bonuses are expected bonuses based on last year`s bonus numbers.
Each year, annual premiums are usually announced in November or December. There are two types of legal partners – equity and non-equity. Both types earn income in different ways and are responsible for different parts of the business. Kane, Macrae`s recruiter, said she`s helped a Bay Area partner double her pay with a step aside over the past two years. The partner had grown up in poverty and the first thing she did with her new compensation was “trick” a Mercedes Sprinter pickup truck to travel with her family, Kane said. It is called the Cravath scale because it is an offshoot of the Cravath system and because Cravath, Swaine & Moore LLP is generally regarded as a pioneer when it comes to partner salaries (despite the fact that other companies such as Milbank and Simpson Thacher were the first to move first-year salaries in recent years). Given the lockdown, staff and law students (as well as their internal counterparts) tend to keep a close eye on changes in Biglaw`s salary range. How does that compare to a decade ago? If we analyze the 2010 editions of the same surveys, we find that little has changed.
According to the 2010 General Counsel Compensation Survey, the top 100 General Counsel earned an average total compensation of $1.56 million. Wachtell`s profit per partner was $4.3 million, a figure surpassed only by a general counsel. 28 The Am law firms made profits per partner above the general counsel average of $1.56 million. The pandemic-induced increase in legal work and drastic costs have resulted in a “surplus” of profits at Latham of more than $1.9 million per partner over two years. A similar calculation by Paul Weiss Wharton Rifkind & Garrison shows that the partners earned about $1.4 million more than long-term growth trends would have predicted.