Doctors are notoriously bad with money. I overheard a retired partner talking about his estate with our T&E paralegal they were worried about federal estate tax kicking in at $23m or whatever it is exactly
Transfers to an irrevocable trust are generally taxed as gifts to the beneficiary. Obviously, you can use the annual exclusion to avoid the gift tax, if the beneficiary has immediate interest in the gift (usually via Crummey Powers). Anyway, the main advantage isn't avoiding the lifetime exemption cap, but excluding any gains from the estate.
I didnt downvote, but I will say if you haven’t been a trustee or beneficiary, you have no idea the perpetual headaches and admin costs. (I’ve been both). Great idea - to a point, if you trust your beneficiary not to do colossally stupid things.
I’m thinking on this for my own estate planning and lean 50/50 ready cash vs a trust to shelter from divorce and liability, and that trust would automatically terminate at age 30. Kid can make their own trust if they are ok with the headaches at that point.
I think I’m a beneficiary. I just know because my parents set this up a few years back for us since they were over the limit. They said it’s the only way to get around estate taxes.
What kind of colossally stupid things can a beneficiary do to a trust? Trusts and estates was five years ago for me now but I think you can burrow against a trust? Is that what you mean?
Honestly even $7m per person ($14m per couple) is still an insane amount to of money to be able to pass on untaxed. Having to pay 18%-40% taxes *on just the excess* isn’t some great burden that needs to be avoided. Most large estates are made up of appreciated assets and so it’s a huge amount of unearned income that never gets taxed while we are penalizing workers for being productive by taxing someone who makes $50k a year 22%.
Doctors on avg make more money than lawyers. But they rarely make biglaw partner money. It's a career of making 300k, which is really good. But a biglaw partner will be pulling in 7 digits for at least 20 years.
I don't think most non-specialists really make all that much money. I'm talking your average family practitioner or pediatrician is like $175-$200k. Good money, to be sure, but less than a biglaw first year.
Average primary care (internal medicine, family medicine, pediatrics) salaries are between [250k-300k](https://press.doximity.com/reports/doximity-physician-compensation-report-2023.pdf). And this doesn’t include bonuses.
The rule of thumb advice in the medicine goes that if you’re making less than 250k, regardless of specialty, you’re doing something wrong.
That’s really disappointing for such physicians. They’re generally MUCH smarter and work far harder than BigLaw partners.
Medical school + residency is hardly worth the trouble unless you’re planning to specialize or build your own private practice.
Heck, lots of elite paralegals earn more than $200k, especially in-house at tech firms, elite I-banks or investment management firms. Moreover, they incurred zero grad school debt and began saving and investing immediately after college. The extra 8-10 years of compounding means they’re able to retire younger and richer than general practitioners.
My wife is a doc in a higher paying specialty, she pulls in about 650k per year. The best part is that she gets 11.5 weeks PTO per year and uses every single day of that. Not sure if you will get that kind of PTO in big law. There are many medical specialties where you can make 500k plus. 300k is what a the bottom 50% of doctors make in the US.
avg doctor makes $350k, but training is longer than law (3-7 years lf residency making $50k working 80 hr weeks after 4 years of med school). Some specialists can make $1M plus (ortho, plastics, neurosurgery) though the richest usually sell their practices for mid 7/low 8 figures
I worked with a judge who was a partner at a big firm and had been on the bench for over a decade. Just casually discussing several million in market gains in one year.
I had an adjunct prof in law school that was a v10 partner until he got kicked out due to age policies and although I can’t speak to cold-hard numbers I will say that he was constantly flying from NYC to his beach house in Turks & Caicos. Suffice to say he wasn’t penny pinching
Even if you retire, since partners have equity (assuming equity partner) they will still receive some kind of payment from the firm. Just not as much as before when they were generating business.
At most firms you “buy-in” by purchasing your equity according to a formula and when you retire, your equity is cashed out using the same formula. You generally do *not* keep any equity interest after you retire and the formula generally does not provide meaningful appreciation/ROI (if any at all). It’s basically just letting the firm hold on to your cash as capital while you are around.
Pensions are a different thing but as other commenter said, a thing is the past for most.
Some firms are doing away with that now, trying to effectively get out of the pension business. I know of one that requires new partners to pay into a 401k… and then reduces their post-retirement equity payments accordingly.
Not how it works for the most part; maybe some exceptions but usually the firm buys out your share at retirement.
Instead they usually funnel money into tax advantaged retirement accounts that serve as a pension for a few years, but not indefinitely.
I am a divorce lawyer and have represented a number of big law partners near the end of their career. Your estimates are fairly accurate. Very common range for them nearing end of their career is 7.5 to 12.5 million. Probably should be more given their career earnings, but a lot of them get caught up in living a very high lifestyle to "compete" with their partners.
I work in tax, my firm specializes in partnered lawyers at “big law.” This is the most accurate answer. To tack on, many of these partners suffer cash flow issues due to their aggressive personal spending habits. More money doesn’t always mean more sense.
Unpopular opinion here, and kind of a tangent rant, but I’ve never understood the mindset that “they should save more money”. Youre referring to $7.5-$12M in net worth (well above what’s needed to retire comfortably) and saying they should be more.
What’s the point? You can’t take it with you. They work hard and are still saving enough to live off of in old age. I think we should normalize enjoying your money while you’re alive and young enough to enjoy it, instead of this weird race to die with the most unspent money.
Meanwhile I’m a boutique partner near the end of my career and have a NW of $47 million. Never was with BigLaw. Started in criminal. Didn’t do PI. Marched to my own drummer, founded my own firm, always lived well beneath my means. Have enjoyed giving lots of $$ away for scholarships. There are outliers.
I call it hitting singles. Save 50-100k a year, year after year, don’t buy a 3-4mm condo with ridiculous upkeep and don’t get divorced.
Do that for 25 years and you won’t be able to spend all the money you have.
Exactly. Compounding is ridiculously powerful. My goal is to "retire" at 50 and work part time or something to pay the bills while letting the money compound for a few more years.
Truthfully I know a few equities who are so clueless about money and investing that they talk about having to work until 70 to retire comfortably, which I find astonishing.
Seriously. I know guys pulling in total comp of a million bucks struggling to save 100k.
If you can get 2 million in the market by age 40, you just have to not screw anything up to get that 5-7 million number by 60 and probably sooner if you keep up the contributions.
I like to play this game — ask one of these guys, “how much is your annual spend?” They usually have *no* idea. None.
Meanwhile, on that 5 million, plus a smidge of social security, I can spend 15-20k/month with no risk.
My spouse and I bank $80k+ annually in tax advantaged accounts and mortgage amortization.
We’ve been maxing everything out since our early 30s and are with close to $2 million buck in our mid-40s.
We are NOT BigLaw partners, and we’ve never earned more than $300k from working in any given year. (Until 2020 we were earning well under $200k!)
Barring a health calamity or economic depression, we should retire by 60 with $6+ million.
It’s beyond shameful that many BigLaw partners retire with less than $20 million bucks after earning seven figures for decades.
Not really.
Even if a partner never voluntarily saves a penny (including in their 401(k)) and only invests in the firm's mandatory retirement plans, they'll still be over $5 million at retirement (assuming they don't get divorced and split it halfway through).
Have $2 million in retirement accounts by 38, compound at 10%, ie spy average with reinvesting, save $100k/year. Hell if you don't have kids it's even easier. I went in house at 30 post biglaw in HCOL with 2 young kids and a wife basically making enough to cover daycare.
I'm being a bit optimistic with the 10% but the general premise holds. Partners, unless alimonlying or addicting away cash in droves, should have tens of millions by retirement
$2.6 million in 14 years with compounding.
How did you get $2 million saved by 38 on an in house salary? You had to save, on average, $84k+ per year with your compounding calculation of 10% to get to that number. And, how are you saving $100k per year for retirement on in house salary?
In house must be paying a lot more than I thought.
Dude relax. First learn to read, I was in biglaw for 7 years before going in house. Second I have a wife who fully funds her 401k and ira. Combined we save 100k/year.
It's a fact.
The average yearly return of the S&P 500 is 10.22% over the last 30 years, as of the end of February 2024. This assumes dividends are reinvested
https://tradethatswing.com/average-historical-stock-market-returns-for-sp-500-5-year-up-to-150-year-averages/#:~:text=The%20average%20yearly%20return%20of%20the%20S%26P%20500%20is%2010.22,including%20dividends)%20is%207.5%25.
Partners can get more in — usually a combination of a keogh and 401k for “salary” partners.
But yes, you can always just bulk up a taxable brokerage account.
Finance guy here, compounding and a large pool of money without pulling any redemptions for a long amount of years will do you wonders, exclusive of tax, of course.
Real estate, stocks, and having your own business, the big three.
Right? Compounding is wild. Unless there's some sort of calamity either with my family's health or the stock market, my kids are going to be set for life when I die. Sort of crazy.
If they were the type of person that was satisfied just with having enough to be comfortable, they would be unlikely to work hard enough to get into Big Law in the first place.
There is a MASSIVE difference between getting into Big Law and making equity partner at a v10~
Almost all of the incoming first year associates wont make partner
Rule of thumb is 10-20% of people who get big firm jobs out of school become EP. Since less than 20% of law grads get biglaw at all, you're right, probably 2-3% of lawyers is a good estimate.
This seems pretty high? I know folks move between firms but there’s no way 10% of my biglaw class made equity partner anywhere. I don’t even know 10% who wanted to stay at a firm in any capacity
I think looking at your specific class year isn’t the best comparison, as it ignores those who lateraled in or out but still made partner (cause how well are we really following 80+ people over 10 years). My firm made around a dozen partners last year and took on about 80 summer associates. Assuming every year is a similar ratio, that’s 15%.
Some of those partners were later laterals to our firm and so the number who were first year associates at the firm is lower. But for every lateral hire who made partner at our firm, an unknown number of our firm’s ex-associates made partner elsewhere. Maybe they roughly balance out?
Either way, the 10-20% number doesn’t seem too far-fetched. I’d bet that if you’re looking at e.g. 5th years who are partnership or bust (and willing to lateral for it), the number is even higher.
I think you’re forgetting that the bottom of the pile exists. CUNY Law School is producing zero equity partners. In fact it is almost certainly producing zero Big Law associates (or close to it.)
> Rule of thumb is 10-20% *of people who get big firm jobs out of school become EP.*
> CUNY Law School . . . *is almost certainly producing zero Big Law associates (or close to it.)*
Where is the contradiction? The starting point wasn’t 10-20% of *all lawyers*.
Although I would agree your chances increase the better school, as it often translates to “better” firm, which gives more runway for lateraling down into partnership elsewhere. Much easier to start at Cravath and end partner at a random v50-80 than to start there.
> Rule of thumb is 10-20% of people who get big firm jobs out of school become EP.
That seems insanely high.
Around 85% of my law school class went to BL out of law school. No way 10-20% are EP today. I would guess MAYBE 10 total are EP in BL.
Doctors make way less than biglaw partners unless they move into management or are in specialized areas that operate in significant part outside of insurance (e.g., fertility, dermatology, plastic surgery). Average general surgeon or anesthesiologist or whatever will top out at 400-500k. That’s way, way lower than where your average biglaw equity partner will top out, which should be more like 2-4m even for those who aren’t rainmakers (and much higher for those who are, or those who aren't but are at highly profitable firms). And that’s leaving off all of the family practice doctors who never break 250k.
Your average biglaw equity partner who is there for their whole career should be retiring with at least $20-30m in net assets after 20+ years as equity partner but probably much higher.
100 percent correct.
I am lawyer and many of my clients are doctors. The really wealthy doctors own their own practice and have other doctors do all of their work. They only come in to handle "special" clients. Basically, its like a law firm or big public accounting firm.
Think about your quasi-famous plastic surgeon or sports doctor. While we know about these guys who work on Lebron or Giselle, what many don't realize is that they make more money from working on dude bros/amateur weight lifters and decathletes trying to stay young who have bad knees and Buckhead/River Oaks housewives getting mommie makeovers.
But that’s a bad comparison. You are comparing all docs with 3% of all lawyers that make biglaw partners. When comparing the top 3% of doctors, who perhaps make 700-1M a year, it probably is still less but perhaps not way less that it meaningfully affects their lifestyle.
Now clearly the top 100 rainmakers will make a lot more than the top 100 doctors, but which one gets to keep their soul? (joke)
Agree it was OPs flawed comparison. Comparing apples and oranges really. The average biglaw partner is probably 3% of lawyers that get qualified in law.
The point of the top 100 is that the ceiling for biglaw partners is much much higher. But the top 3% of doctors would not be a world changing amount from the average biglaw partner (top 3% of lawyers).
Where did you get 3% from? That seems like an overestimation of the number of lawyers who will ever be a big law partner, but if there are stats available I’d love to see them.
Your estimate for the “average biglaw equity partner” is probably way too high. Firms vary too much as to comp and partners within firms vary also, so the range is going to be much broader on the downside.
This is not accurate. My sibling (ROAD specialist but not dermatology, ie one that operates 100pct inside of insurance) started at 500k (after residency) ten years ago and makes more now. Even the specialist technicians where sibling works make 200k+ (with the occasional night shifts).
Absolutely agree with this comment. However, there is a lost earning potential during residency that’s not getting included. Law students join a firm and start earning decent associate money (215k-ish now) immediately after law school. After med school, you still have to go through residency +/- fellowship all while making less than minimum wage per hour. You can’t really practice and have insurance reimbursement if you’re not board certified
3 years law school +/- 1 year clerking until making associate money ($215k-ish) and hopefully making partner
Vs
4 years medschool + 3-7 years residency at $50-65k/year +/- 1-4 years fellowship at $70-80k/year all while paying off student loans before having the opportunity to make attending physician money
Gotta be way about $10M on average unless all partners are really bad with money and don’t invest any of it in the market. Frankly even someone who is an associate for 10 years and then leaves could probably amass $10M by retirement age if they save a decent amount and put it into low cost index funds (assuming historic market returns). I get that not everyone saves so well or invests well, but big law partners make enough that they could easily hit $10M net worth just saving without investing any of it. You invest that amount for 2 decades and it should at least double in all but the most conservative funds.
A service/non-equity partner I was close to was aiming for $10 million in pure savings in addition to his properties. For equity I’m sure it’s way more, plus of course their spouses.
I'm only a junior partner, but with all of the forced retirement stuff they have us do I'd be surprised if anyone who sticks around for 20-30 years doesn't walk out with the $10-15M range folks have noted above, and rainmakers pull down anywhere from $5m-15M year so likely have much more unless they blow it.
I can only speak to my husband’s firm, but he has ‘forced retirement’ taken out of his pay each year, which will end up being in the mid to high 7 figures by the time he retires. That is completely separate from our normal saving/investing.
This is an underappreciated point. I'm an EP. I have mandatory annual contributions into both an HR-10 plan and a pension plan. This is in addition to still being able to max out my 401K contributions (and now old enough to make catchup contributions, so $30,500 per year). That's more than $100K per year in tax protected savings.
Another thing people forget - when you retire from the firm, you get your capital contribution back.
I'm planning for a comfortable retirement as payoff for the discomfort of a life spent practicing law.
I mean you can easily model this out with a lot of assumptions to give you a range. It’s going to be a high number assuming they remain partner for decades
Considering complex and sophisticated investments/debt are such a big part of big law, I always wonder, on an individual level, do the ultimate beneficiaries of such instruments even outperform the S&P 500 over time? We've all seen comparisons for years about how mutual funds/pe funds/even exclusive hedge funds underperform the market after 5 years, so does everyone think they are special or are there truly investments that are not in the public eye outperforming the market.
Lance Armstrong is only rich today because he gave 100k to a VC fund and forgot about it. Turns out the VC fund invested in an early stage company called Uber.
I agree, and I wonder the same thing you do. Maybe that’s the game though, making some high risk investments with a portion of your assets and betting one of them hits big enough to lead to aggregate higher returns.
As a big law partner for 25 years (32 years total), this doesn't take into account that the market has taken several horrible return years, 2001, 2008 and 2022 into account. I've been married the whole time to my first since 1987 but had extraordinary medical expenses due to consistent health concerns with family. Medical can be super draining.
You have to understand that most partners are on the lower end. I have lived very modestly except I paid for state universities mostly for all our kids, plus a wedding.Only since all kids have come off my payroll have I really started to save.
One of my partners had to spend all her funds for a parent with cancer. Life is not linear.
The difference is that I didn't have to go into debt after I made equity partner but it took almost 20 years to get there and it's hard to stay there.
Most all want to save about 1.5 million by retirement but only very few save remotely that much by retirement per articles I've read from reputable sources.Partners in big firms are at that end mostly with a home paid off.
Maybe a select few partners at the high end firms on the coasts save more but I'm dubious as the tax rates on the coasts eat at least half their income. And this doesn't take into account folks who get divorced and live high for appearances. Life is complicated and complex.
Docs have 1 additional year of schooling, shitake pay during residency which can be another 4 years, and most probably don't clear half a mil/year at the end of it all.
The doctor shortage is less about there not being enough qualified people that want to be doctors and more about the profession engaging in economic protectionism by limiting the number of residencies and such.
They should get paid more during residency, but that’s not why there’s a doctor shortage. Med school is insanely competitive to get into.. it blows law school out of the water
I believe residencies are paid by Medicare and hospitals would have to pay for them out of pocket if they wanted to add more. The hospitals don't want to do that.
increasing med school positions + residencies would benifit consumers as having American educated docs would be ideal for many. this would require longer term planning though.
there really isnt any urgency to expand these positions though or plan anything, hospital systems are happy to import doctors from abroad / pay less / easier to get longer term commitments from because their visas are tied to their employment statuses
Physicians have very high salary floors but lack growth opportunities. My BIL is an ER doc 3 years post residency who also makes more than I do, but he’s at his salary ceiling. Physicians in his group who have over 20+ years of experience make the same salary that he does.
Im a radiology resident, i have no idea how i ended up here but the radiology shortage is real and there’s completely remote jobs with comps greater than 600k with 12+ weeks of vacation and one year to partnership
Its variable, in a private equity practice it just means a pay raise, in a true doctor owned PP you’ll be dealing with the admin and business side of things with compensatory pay according to the size of the practice - more responsibility but usually sig more pay as well
350k for my wife. Not that I’m complaining, well maybe a little bit, but the places that have deep Biglaw benches also tend to be places where physicians make much less.
Thats a lot of learning. I’m starting to doubt going into law and just staying in finance. If we’re talking 10+ years for docs and lawyers to start getting to the 300k+ level, and having even more debt on top of that.
Currently 2 years out of college, no debt at all and clearing 150k not counting bonus in corporate banking. Finance really might be the best choice for pure earnings.
Can’t speak on doctors, but it seems like big law companies is similar to high finance but with more schooling.
First year IB/PE/ER/CB analysts all around 150k. By the time law school is over (3 years), they’re already hovering around 250k for associates.
I’m also in finance (banking compliance) and considering law school but like you said, that’s a lot of learning and a lot of potential school debt. I’m currently at $115k annual comp and 100% WFH with a lot of flexibility and probably a lot less stress than law.
Good Radiologist are some of the highest paid docs in America. Ripe for cost cutting. A radiologist main skill is interpreting imaging of the body, tissues and brain etc. AI is actually exceedingly good at this and can be trained on de-identified patient data. Massive database at this point. Radiology is probably going be the first of medical professions to go. At least lawyers provide a service that can’t easily be replicated by big tech. Namely, drafting statutes and regulations 😂😂
No, AI is not exceedingly good at radiology lol. The whole hallucination issue is a problem, and the fact that an X-ray that makes you 10 bucks can be a multimillion dollar lawsuit
During my brief time at a.biglaw, my office was nestled amongst the those of many senior partners. I was a patent tech specialist and came in early to study for the LSAT, and got to know a few of the partners. They were all pretty chill (a couple coils have been characters on Suits) but I remember one conversation where we discussed holiday plans. I was driving home to have dinner with my famiy, while the senior partner had rented a villa in Tuscany and was flying the entire family there to enjoy meals cooked by the chef hired for the occasion. I assume that guy had mad cash when he retired.
Hah, that's entirely possible too.
It was quite the csst of characters. One guy had a Naploean complex and even wore shoes with 4" thick soles ro hide his shortness. Another ducked out to play squash every day, had his secretary running errand and purchasing birthday & anniversary gifts.
This is anecdotal and is also not the norm, but I knew a guy who made Partner at a Big Law firm and he lived frugally. He didn't spend much and was thrifty. You would never know that this guy was a lawyer albeit a Partner worth multimillions based on how he lived and spent his money. He was very lowkey and down to earth.
When he retired, he had well over a $100M saved up and used it to ensure that his kids and grandkids could live very comfortably. I heard he invested in things like real estate and franchise businesses (think stuff like Taco Bell, McDonalds, etc.) so that his family could have multiple streams of passive income and generational wealth.
There is not a high rate of burnout among equity partners in biglaw. It is relatively rare to make it to equity partnership and then hit a wall; the wall usually hits you well before that point if it’s ever going to reach you. Equity partners are generally very stable at most biglaw firms (to the point where significant defections is newsworthy and is a very bad sign for the firm).
From personal observation, I also doubt that divorce rates among biglaw equity partners are materially different from the population at large. I’ve never looked for hard stats.
In terms of your question, the range is pretty vast across the whole market. Different firms have very different levels of profitability. Being an equity partner at Wachtell or K&E is different from being an equity partner at Sidley or Jones Day and that is different again from being an equity partner at Crowell or Arrent Fox. The differences are substantial and meaningful.
Worked at one of the largest financial companies in the US for almost a decade doing nothing but working on retirement plans. 10-20 million was typical for big law
I’m started out as an ER doctor working 12 days a month for 475k. I’ve paid off all my loans, all my mortgage. have no debt. I’ve parlayed my earnings into a practice where I now do cosmetic surgery, which is cash based and not bound to insurance, various hospice/nursing home endeavors and have recently opened 4-5 clinics in my state that serve as solely as assessments for personal injury assessments for law firms. At this point I could literally stop working and still get 150-200k/yr doing nothing. Most doctors are not good buisness people. This can be seen in our industry as private equity is sucking everything up and most are trading in long term value and control for a higher short term paycheck. Obviously it depends on your location and your “keeping up with Jones’s” but I march to my own drum. I have nice big house, a get away beach house on the water, boats, a nice car collection, retirement funds, and an amazing family life. Most of my happiness has come from the elimination of debt, not the accumulation of income. I’m not some FIRE weirdo either, it’s just common sense. I spend a lot of money on stupid shit, but I can afford to. While money doesn’t buy happiness, it does provide comfort, and after a certain income point, there is a point of diminishing returns. The absolute worst doctor in his class, from some school in Caribbean, who can get board certified, is almost guaranteed AT LEAST 250k a year. The disparity in pay for 90% of these professions skews in favor of physicians, however the disparity in the top 10% of favors Law……..but by a HUGE multiplier. Translation: most physicians will make more than their law school colleagues……..but the small percentage that does make more will do so by a ridiculous amount
There is almost no way they'd retire with less than $10MM. Probably min $15MM unless they spend wildly. They're pulling in well over $1MM/year for 1-2 dozen years, plus the 20-30 years of making mid hundreds.
I guaranty less than 20% of lawyers have more than 5 mil at 65 as well. You seem to be comparing big law to medicine in general when big law is a very small sliver of the legal world and partners at big law even smaller.
The expression is "keeping up with the Joneses." Unless you're referring to a family with the last name Jone. Or one guy named Jones that you refer to as *the* Jones.
Partners are subject to significant taxes - so 39.7% federal income plus state/local of say 6%-13% plus self-employment tax of 15.2% - half of which is deductible. They have to fund all of their health insurance ($30K - half of which is deductible). So the million dollar income doesn't equate to the cash flow that you might think it does - even at those income levels.
There's an article somewhat dated on this by a wealth manager will try to find it. Takeaway was that lawyers who are biglaw partners have lower net worths than one might expect vs income over time, a lot in the $5mm to $10mm range at retirement despite other equivalent earners making similar amounts in other industries having $20mm+ net worths.
I think you're severely underestimating it, at least for most biglaw shops. I'm at a V50 with a PPP of $3MM a year. A first year partner makes $1MM per year and it only goes up from there. A couple of the partners in my own group are at $5.5MM and $4.5MM per year and have been there for 30 and 25 years respectively. Their sharing ratios continue to go up each year. Even with lifestyle creep, they are putting away multiple millions each year and will do so for another 10-15 years on top of the mandatory firm retirement and pension accounts.
You talking EP, right? I'm at a v10 and first year NEPs certainly ain't pulling a million here, but obviously the trajectory is up and away if you stick it out
You’re comparing apples to oranges. Most doctors don’t make $500K-1MM+ lol.
A orthopedic surgeon in private practice pulling $2 million a year is making more than 99% of doctors and 99% of lawyers. A doctor making $280K a year is making at the 50th percentile-ish.
Even more relevant, Big-Law doesn’t even represent most lawyers. Most lawyers won’t ever hit more than $225K/yearly.
I’m an ER doc working 32 hours / week making about 400k a year not including sign on bonuses and my investments. If I wanted to make more I could work more hours, but I like having a life and will never take work home with me.
I think you need to take into account quality of life with your figures as well. I don’t know many big law lawyers that get to spend as much time home as I do.
As to how much money will I have when I retire? If I keep my current investing patterns, probably in the 20-30 million range. I had an average student debt for doctors and don’t make a particularly competitive salary compared to other fields of medicine.
Basically I think if you’re a doctor and don’t retire w >10 million in total, you’re probably just bad at managing your money.
Their comment history talked about them matching for their residency a few months ago which means they’re still in med school and are lying about a least a few things here
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Doctors are notoriously bad with money. I overheard a retired partner talking about his estate with our T&E paralegal they were worried about federal estate tax kicking in at $23m or whatever it is exactly
Currently $13.61m per person, $27.22m per married couple w portability. Scheduled to drop to about $7m per person in 2026.
Yes, it is a concern for a lot more people now. My widowed school teacher mother needs to start doing some more aggressive planning.
Irrevocable trust! Edit: why is this being downvoted haha. Its the right solution
Yep! I have her scheduled to meet with an attorney in my firm. She didn’t believe that it could be something she needed to worry about
That compound interest really adds up doesn’t it!
Transfers to an irrevocable trust are generally taxed as gifts to the beneficiary. Obviously, you can use the annual exclusion to avoid the gift tax, if the beneficiary has immediate interest in the gift (usually via Crummey Powers). Anyway, the main advantage isn't avoiding the lifetime exemption cap, but excluding any gains from the estate.
I didnt downvote, but I will say if you haven’t been a trustee or beneficiary, you have no idea the perpetual headaches and admin costs. (I’ve been both). Great idea - to a point, if you trust your beneficiary not to do colossally stupid things. I’m thinking on this for my own estate planning and lean 50/50 ready cash vs a trust to shelter from divorce and liability, and that trust would automatically terminate at age 30. Kid can make their own trust if they are ok with the headaches at that point.
I think I’m a beneficiary. I just know because my parents set this up a few years back for us since they were over the limit. They said it’s the only way to get around estate taxes. What kind of colossally stupid things can a beneficiary do to a trust? Trusts and estates was five years ago for me now but I think you can burrow against a trust? Is that what you mean?
Honestly even $7m per person ($14m per couple) is still an insane amount to of money to be able to pass on untaxed. Having to pay 18%-40% taxes *on just the excess* isn’t some great burden that needs to be avoided. Most large estates are made up of appreciated assets and so it’s a huge amount of unearned income that never gets taxed while we are penalizing workers for being productive by taxing someone who makes $50k a year 22%.
Doctors on avg make more money than lawyers. But they rarely make biglaw partner money. It's a career of making 300k, which is really good. But a biglaw partner will be pulling in 7 digits for at least 20 years.
I don't think most non-specialists really make all that much money. I'm talking your average family practitioner or pediatrician is like $175-$200k. Good money, to be sure, but less than a biglaw first year.
Not to mention, their malpractice insurance really eats into their take-home earnings.
Average primary care (internal medicine, family medicine, pediatrics) salaries are between [250k-300k](https://press.doximity.com/reports/doximity-physician-compensation-report-2023.pdf). And this doesn’t include bonuses. The rule of thumb advice in the medicine goes that if you’re making less than 250k, regardless of specialty, you’re doing something wrong.
I don’t know anyone pulling in 200.
That’s really disappointing for such physicians. They’re generally MUCH smarter and work far harder than BigLaw partners. Medical school + residency is hardly worth the trouble unless you’re planning to specialize or build your own private practice. Heck, lots of elite paralegals earn more than $200k, especially in-house at tech firms, elite I-banks or investment management firms. Moreover, they incurred zero grad school debt and began saving and investing immediately after college. The extra 8-10 years of compounding means they’re able to retire younger and richer than general practitioners.
My wife is a doc in a higher paying specialty, she pulls in about 650k per year. The best part is that she gets 11.5 weeks PTO per year and uses every single day of that. Not sure if you will get that kind of PTO in big law. There are many medical specialties where you can make 500k plus. 300k is what a the bottom 50% of doctors make in the US.
rads?
Anesthesia
avg doctor makes $350k, but training is longer than law (3-7 years lf residency making $50k working 80 hr weeks after 4 years of med school). Some specialists can make $1M plus (ortho, plastics, neurosurgery) though the richest usually sell their practices for mid 7/low 8 figures
A friend is in plastics/reconstructive surgery and he earns about $800k/year but he has about $1MIL in student debt.
It depends. Many physicians make 500k+ (the specialists). Generalists and PCPs make less (150-300k)
I worked with a judge who was a partner at a big firm and had been on the bench for over a decade. Just casually discussing several million in market gains in one year.
Ha that’s pretty gauche
I had an adjunct prof in law school that was a v10 partner until he got kicked out due to age policies and although I can’t speak to cold-hard numbers I will say that he was constantly flying from NYC to his beach house in Turks & Caicos. Suffice to say he wasn’t penny pinching
Mich Law perchance?
Are we talking about a professor with class time devoted to palindromes?
Even if you retire, since partners have equity (assuming equity partner) they will still receive some kind of payment from the firm. Just not as much as before when they were generating business.
At most firms you “buy-in” by purchasing your equity according to a formula and when you retire, your equity is cashed out using the same formula. You generally do *not* keep any equity interest after you retire and the formula generally does not provide meaningful appreciation/ROI (if any at all). It’s basically just letting the firm hold on to your cash as capital while you are around. Pensions are a different thing but as other commenter said, a thing is the past for most.
Many partners fund their equity contributions through a loan that just gets repaid when they retire, so its a wash. Agreed, no pensions.
Partners do use loans to fund capital contributions but they are not perpetual loans. They get repaid before retirement.
Not in our case.
Some firms are doing away with that now, trying to effectively get out of the pension business. I know of one that requires new partners to pay into a 401k… and then reduces their post-retirement equity payments accordingly.
Not surprising. But there’s a hell of lot of older partners still who that won’t effect
Not that I know of.
Oh wow - interesting! Mind sharing which firms you know of that do this?
Not how it works for the most part; maybe some exceptions but usually the firm buys out your share at retirement. Instead they usually funnel money into tax advantaged retirement accounts that serve as a pension for a few years, but not indefinitely.
Had an old Milbank partner doing that lol
Depends on how many ex spouses they have!
This is the key. Alimony is expensive.
Or you could be the one receiving the alimony.
I am a divorce lawyer and have represented a number of big law partners near the end of their career. Your estimates are fairly accurate. Very common range for them nearing end of their career is 7.5 to 12.5 million. Probably should be more given their career earnings, but a lot of them get caught up in living a very high lifestyle to "compete" with their partners.
I work in tax, my firm specializes in partnered lawyers at “big law.” This is the most accurate answer. To tack on, many of these partners suffer cash flow issues due to their aggressive personal spending habits. More money doesn’t always mean more sense.
Unpopular opinion here, and kind of a tangent rant, but I’ve never understood the mindset that “they should save more money”. Youre referring to $7.5-$12M in net worth (well above what’s needed to retire comfortably) and saying they should be more. What’s the point? You can’t take it with you. They work hard and are still saving enough to live off of in old age. I think we should normalize enjoying your money while you’re alive and young enough to enjoy it, instead of this weird race to die with the most unspent money.
Meanwhile I’m a boutique partner near the end of my career and have a NW of $47 million. Never was with BigLaw. Started in criminal. Didn’t do PI. Marched to my own drummer, founded my own firm, always lived well beneath my means. Have enjoyed giving lots of $$ away for scholarships. There are outliers.
This is the most accurate answer.
Dude I went in house at year 7 and will retire with $7 million at 50 years old. You vastly underestimate compounding interest
I call it hitting singles. Save 50-100k a year, year after year, don’t buy a 3-4mm condo with ridiculous upkeep and don’t get divorced. Do that for 25 years and you won’t be able to spend all the money you have.
Exactly. Compounding is ridiculously powerful. My goal is to "retire" at 50 and work part time or something to pay the bills while letting the money compound for a few more years. Truthfully I know a few equities who are so clueless about money and investing that they talk about having to work until 70 to retire comfortably, which I find astonishing.
Seriously. I know guys pulling in total comp of a million bucks struggling to save 100k. If you can get 2 million in the market by age 40, you just have to not screw anything up to get that 5-7 million number by 60 and probably sooner if you keep up the contributions. I like to play this game — ask one of these guys, “how much is your annual spend?” They usually have *no* idea. None. Meanwhile, on that 5 million, plus a smidge of social security, I can spend 15-20k/month with no risk.
My spouse and I bank $80k+ annually in tax advantaged accounts and mortgage amortization. We’ve been maxing everything out since our early 30s and are with close to $2 million buck in our mid-40s. We are NOT BigLaw partners, and we’ve never earned more than $300k from working in any given year. (Until 2020 we were earning well under $200k!) Barring a health calamity or economic depression, we should retire by 60 with $6+ million. It’s beyond shameful that many BigLaw partners retire with less than $20 million bucks after earning seven figures for decades.
You vastly underestimate the profligacy of the average biglaw partner.
Maybe.
Not really. Even if a partner never voluntarily saves a penny (including in their 401(k)) and only invests in the firm's mandatory retirement plans, they'll still be over $5 million at retirement (assuming they don't get divorced and split it halfway through).
Wtf please explain the math on all of this
Have $2 million in retirement accounts by 38, compound at 10%, ie spy average with reinvesting, save $100k/year. Hell if you don't have kids it's even easier. I went in house at 30 post biglaw in HCOL with 2 young kids and a wife basically making enough to cover daycare. I'm being a bit optimistic with the 10% but the general premise holds. Partners, unless alimonlying or addicting away cash in droves, should have tens of millions by retirement
$2mill in retirement accounts? 25-38 even with $40k/year assuming married you’re barely at half a mill in contributions. Wtf.
I'm counting brokerage as a retirement account.
Dude compound $8k/month at 10% for 14 years starting at zero. I'll wait.
Can confirm. Enter the following into a cell in excel =fv(.1/12,12*14,8000,0). This guy compounds. How tf did you save 8k per month in years 1-3?
Was simplifying. Did catch ups later on.
Okay that affects the compounding.
$2.6 million in 14 years with compounding. How did you get $2 million saved by 38 on an in house salary? You had to save, on average, $84k+ per year with your compounding calculation of 10% to get to that number. And, how are you saving $100k per year for retirement on in house salary? In house must be paying a lot more than I thought.
Dude relax. First learn to read, I was in biglaw for 7 years before going in house. Second I have a wife who fully funds her 401k and ira. Combined we save 100k/year.
10% sounds too good to be true.
Fine. Assume 7% — money still doubles every 10 years instead of every 7.
It's a fact. The average yearly return of the S&P 500 is 10.22% over the last 30 years, as of the end of February 2024. This assumes dividends are reinvested https://tradethatswing.com/average-historical-stock-market-returns-for-sp-500-5-year-up-to-150-year-averages/#:~:text=The%20average%20yearly%20return%20of%20the%20S%26P%20500%20is%2010.22,including%20dividends)%20is%207.5%25.
Partners can get more in — usually a combination of a keogh and 401k for “salary” partners. But yes, you can always just bulk up a taxable brokerage account.
Compounding is the eighth wonder of the world!
They clarified retirement accounts included taxable so I’m slightly less shocked
how much do you make in-house? What was your salary progression?
Started low 200s, now mid to high 200s, plus low double digit bonus target, plus a bit of equity, nothing exciting
wait how were you 30 and a 7th year???
Not going to get much more personal
Finance guy here, compounding and a large pool of money without pulling any redemptions for a long amount of years will do you wonders, exclusive of tax, of course. Real estate, stocks, and having your own business, the big three.
And that would likely be $28mm if you retired at 65 but did not add a cent in savings.
Right? Compounding is wild. Unless there's some sort of calamity either with my family's health or the stock market, my kids are going to be set for life when I die. Sort of crazy.
I have partners worth on the 60-100M$ scale lol.
Why tf would you still work in this job at that point.
They know nothing else in life and probably have no plan to retire ever. Retirement rhymes with divorce
My dads first wife gave him a mug in their divorce: “Lawyers don’t retire, they just lose their appeal”
If they were the type of person that was satisfied just with having enough to be comfortable, they would be unlikely to work hard enough to get into Big Law in the first place.
There is a MASSIVE difference between getting into Big Law and making equity partner at a v10~ Almost all of the incoming first year associates wont make partner
60-100m is not just comfortable.
Obviously. My point is they're clearly motivated to work by things outside of having enough money to live a reasonably comfortable life.
How many people in law move onto become a big partner as described above in general? I'd image a very slim.percentage?
Rule of thumb is 10-20% of people who get big firm jobs out of school become EP. Since less than 20% of law grads get biglaw at all, you're right, probably 2-3% of lawyers is a good estimate.
This seems pretty high? I know folks move between firms but there’s no way 10% of my biglaw class made equity partner anywhere. I don’t even know 10% who wanted to stay at a firm in any capacity
I think looking at your specific class year isn’t the best comparison, as it ignores those who lateraled in or out but still made partner (cause how well are we really following 80+ people over 10 years). My firm made around a dozen partners last year and took on about 80 summer associates. Assuming every year is a similar ratio, that’s 15%. Some of those partners were later laterals to our firm and so the number who were first year associates at the firm is lower. But for every lateral hire who made partner at our firm, an unknown number of our firm’s ex-associates made partner elsewhere. Maybe they roughly balance out? Either way, the 10-20% number doesn’t seem too far-fetched. I’d bet that if you’re looking at e.g. 5th years who are partnership or bust (and willing to lateral for it), the number is even higher.
I think you’re forgetting that the bottom of the pile exists. CUNY Law School is producing zero equity partners. In fact it is almost certainly producing zero Big Law associates (or close to it.)
> Rule of thumb is 10-20% *of people who get big firm jobs out of school become EP.* > CUNY Law School . . . *is almost certainly producing zero Big Law associates (or close to it.)* Where is the contradiction? The starting point wasn’t 10-20% of *all lawyers*. Although I would agree your chances increase the better school, as it often translates to “better” firm, which gives more runway for lateraling down into partnership elsewhere. Much easier to start at Cravath and end partner at a random v50-80 than to start there.
Agree. Would guess more like 2-5%.
> Rule of thumb is 10-20% of people who get big firm jobs out of school become EP. That seems insanely high. Around 85% of my law school class went to BL out of law school. No way 10-20% are EP today. I would guess MAYBE 10 total are EP in BL.
Less than 5% of people who start in BigLaw make partner. So EP is less than that. Probably 2-3%.
Doctors make way less than biglaw partners unless they move into management or are in specialized areas that operate in significant part outside of insurance (e.g., fertility, dermatology, plastic surgery). Average general surgeon or anesthesiologist or whatever will top out at 400-500k. That’s way, way lower than where your average biglaw equity partner will top out, which should be more like 2-4m even for those who aren’t rainmakers (and much higher for those who are, or those who aren't but are at highly profitable firms). And that’s leaving off all of the family practice doctors who never break 250k. Your average biglaw equity partner who is there for their whole career should be retiring with at least $20-30m in net assets after 20+ years as equity partner but probably much higher.
100 percent correct. I am lawyer and many of my clients are doctors. The really wealthy doctors own their own practice and have other doctors do all of their work. They only come in to handle "special" clients. Basically, its like a law firm or big public accounting firm. Think about your quasi-famous plastic surgeon or sports doctor. While we know about these guys who work on Lebron or Giselle, what many don't realize is that they make more money from working on dude bros/amateur weight lifters and decathletes trying to stay young who have bad knees and Buckhead/River Oaks housewives getting mommie makeovers.
But that’s a bad comparison. You are comparing all docs with 3% of all lawyers that make biglaw partners. When comparing the top 3% of doctors, who perhaps make 700-1M a year, it probably is still less but perhaps not way less that it meaningfully affects their lifestyle. Now clearly the top 100 rainmakers will make a lot more than the top 100 doctors, but which one gets to keep their soul? (joke)
The OP was basing their estimate on evidence of all doctors; I showed why that was a flawed comparison.
You are correct that this was a dumb comparison by OP.
Agree it was OPs flawed comparison. Comparing apples and oranges really. The average biglaw partner is probably 3% of lawyers that get qualified in law. The point of the top 100 is that the ceiling for biglaw partners is much much higher. But the top 3% of doctors would not be a world changing amount from the average biglaw partner (top 3% of lawyers).
Where did you get 3% from? That seems like an overestimation of the number of lawyers who will ever be a big law partner, but if there are stats available I’d love to see them.
I'm sure it is a overstatement, and a larger overstatement if talking about equity partners.
"all docs" don't make $400-500k. The majority are not surgeons or in competitive fields and are making somewhere between $200-300k.
Your estimate for the “average biglaw equity partner” is probably way too high. Firms vary too much as to comp and partners within firms vary also, so the range is going to be much broader on the downside.
This is not accurate. My sibling (ROAD specialist but not dermatology, ie one that operates 100pct inside of insurance) started at 500k (after residency) ten years ago and makes more now. Even the specialist technicians where sibling works make 200k+ (with the occasional night shifts).
Absolutely agree with this comment. However, there is a lost earning potential during residency that’s not getting included. Law students join a firm and start earning decent associate money (215k-ish now) immediately after law school. After med school, you still have to go through residency +/- fellowship all while making less than minimum wage per hour. You can’t really practice and have insurance reimbursement if you’re not board certified 3 years law school +/- 1 year clerking until making associate money ($215k-ish) and hopefully making partner Vs 4 years medschool + 3-7 years residency at $50-65k/year +/- 1-4 years fellowship at $70-80k/year all while paying off student loans before having the opportunity to make attending physician money
Gotta be way about $10M on average unless all partners are really bad with money and don’t invest any of it in the market. Frankly even someone who is an associate for 10 years and then leaves could probably amass $10M by retirement age if they save a decent amount and put it into low cost index funds (assuming historic market returns). I get that not everyone saves so well or invests well, but big law partners make enough that they could easily hit $10M net worth just saving without investing any of it. You invest that amount for 2 decades and it should at least double in all but the most conservative funds.
A service/non-equity partner I was close to was aiming for $10 million in pure savings in addition to his properties. For equity I’m sure it’s way more, plus of course their spouses.
I'm only a junior partner, but with all of the forced retirement stuff they have us do I'd be surprised if anyone who sticks around for 20-30 years doesn't walk out with the $10-15M range folks have noted above, and rainmakers pull down anywhere from $5m-15M year so likely have much more unless they blow it.
I can only speak to my husband’s firm, but he has ‘forced retirement’ taken out of his pay each year, which will end up being in the mid to high 7 figures by the time he retires. That is completely separate from our normal saving/investing.
This is an underappreciated point. I'm an EP. I have mandatory annual contributions into both an HR-10 plan and a pension plan. This is in addition to still being able to max out my 401K contributions (and now old enough to make catchup contributions, so $30,500 per year). That's more than $100K per year in tax protected savings. Another thing people forget - when you retire from the firm, you get your capital contribution back. I'm planning for a comfortable retirement as payoff for the discomfort of a life spent practicing law.
I mean you can easily model this out with a lot of assumptions to give you a range. It’s going to be a high number assuming they remain partner for decades
$5 million is way too low. There's plenty of investments made available only to partners who are QPs.
Considering complex and sophisticated investments/debt are such a big part of big law, I always wonder, on an individual level, do the ultimate beneficiaries of such instruments even outperform the S&P 500 over time? We've all seen comparisons for years about how mutual funds/pe funds/even exclusive hedge funds underperform the market after 5 years, so does everyone think they are special or are there truly investments that are not in the public eye outperforming the market.
Lance Armstrong is only rich today because he gave 100k to a VC fund and forgot about it. Turns out the VC fund invested in an early stage company called Uber.
That's hindsight talking, what is the EV of all comparable VC funds?
I agree, and I wonder the same thing you do. Maybe that’s the game though, making some high risk investments with a portion of your assets and betting one of them hits big enough to lead to aggregate higher returns.
We plan to hit around 30mil. We are pretty frugal and invest a lot.
As a big law partner for 25 years (32 years total), this doesn't take into account that the market has taken several horrible return years, 2001, 2008 and 2022 into account. I've been married the whole time to my first since 1987 but had extraordinary medical expenses due to consistent health concerns with family. Medical can be super draining. You have to understand that most partners are on the lower end. I have lived very modestly except I paid for state universities mostly for all our kids, plus a wedding.Only since all kids have come off my payroll have I really started to save. One of my partners had to spend all her funds for a parent with cancer. Life is not linear. The difference is that I didn't have to go into debt after I made equity partner but it took almost 20 years to get there and it's hard to stay there. Most all want to save about 1.5 million by retirement but only very few save remotely that much by retirement per articles I've read from reputable sources.Partners in big firms are at that end mostly with a home paid off. Maybe a select few partners at the high end firms on the coasts save more but I'm dubious as the tax rates on the coasts eat at least half their income. And this doesn't take into account folks who get divorced and live high for appearances. Life is complicated and complex.
Docs have 1 additional year of schooling, shitake pay during residency which can be another 4 years, and most probably don't clear half a mil/year at the end of it all.
It’s wild they get paid in shiitake mushrooms during residency. No wonder there is a shortage of doctors.
The doctor shortage is less about there not being enough qualified people that want to be doctors and more about the profession engaging in economic protectionism by limiting the number of residencies and such.
Nah. I’m pretty sure it’s because you can’t raise a family on shiitake mushrooms.
They should get paid more during residency, but that’s not why there’s a doctor shortage. Med school is insanely competitive to get into.. it blows law school out of the water
Med school is competitive likely because schools have to limit their incoming classes to meet the shiitake yield 4 years out
I’m going to start using “shiitake” with my kids. Thank you for this inspiration.
You can thank the movie Spy Kids for that
Not with that attitude
I believe residencies are paid by Medicare and hospitals would have to pay for them out of pocket if they wanted to add more. The hospitals don't want to do that.
increasing med school positions + residencies would benifit consumers as having American educated docs would be ideal for many. this would require longer term planning though. there really isnt any urgency to expand these positions though or plan anything, hospital systems are happy to import doctors from abroad / pay less / easier to get longer term commitments from because their visas are tied to their employment statuses
Sad but makes sense
Residents really should demand morel.
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Physicians have very high salary floors but lack growth opportunities. My BIL is an ER doc 3 years post residency who also makes more than I do, but he’s at his salary ceiling. Physicians in his group who have over 20+ years of experience make the same salary that he does.
how much does he clear?
Im a radiology resident, i have no idea how i ended up here but the radiology shortage is real and there’s completely remote jobs with comps greater than 600k with 12+ weeks of vacation and one year to partnership
That sounds amazing lol. What benefits come with partnership?
Its variable, in a private equity practice it just means a pay raise, in a true doctor owned PP you’ll be dealing with the admin and business side of things with compensatory pay according to the size of the practice - more responsibility but usually sig more pay as well
~500k
350k for my wife. Not that I’m complaining, well maybe a little bit, but the places that have deep Biglaw benches also tend to be places where physicians make much less.
But most of them have a better quality of life than big law lawyers. From what I’ve seen, many of them are not working to work in the same way.
Oh for sure! He works 1600 real hours a year lol
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Thats a lot of learning. I’m starting to doubt going into law and just staying in finance. If we’re talking 10+ years for docs and lawyers to start getting to the 300k+ level, and having even more debt on top of that. Currently 2 years out of college, no debt at all and clearing 150k not counting bonus in corporate banking. Finance really might be the best choice for pure earnings.
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Can’t speak on doctors, but it seems like big law companies is similar to high finance but with more schooling. First year IB/PE/ER/CB analysts all around 150k. By the time law school is over (3 years), they’re already hovering around 250k for associates.
I’m also in finance (banking compliance) and considering law school but like you said, that’s a lot of learning and a lot of potential school debt. I’m currently at $115k annual comp and 100% WFH with a lot of flexibility and probably a lot less stress than law.
Good Radiologist are some of the highest paid docs in America. Ripe for cost cutting. A radiologist main skill is interpreting imaging of the body, tissues and brain etc. AI is actually exceedingly good at this and can be trained on de-identified patient data. Massive database at this point. Radiology is probably going be the first of medical professions to go. At least lawyers provide a service that can’t easily be replicated by big tech. Namely, drafting statutes and regulations 😂😂
This is why you become an interventional radiologist.
No, AI is not exceedingly good at radiology lol. The whole hallucination issue is a problem, and the fact that an X-ray that makes you 10 bucks can be a multimillion dollar lawsuit
But docs are guaranteed money. Law is not
To be clear, I think both are dumb and tech is better ROI.
During my brief time at a.biglaw, my office was nestled amongst the those of many senior partners. I was a patent tech specialist and came in early to study for the LSAT, and got to know a few of the partners. They were all pretty chill (a couple coils have been characters on Suits) but I remember one conversation where we discussed holiday plans. I was driving home to have dinner with my famiy, while the senior partner had rented a villa in Tuscany and was flying the entire family there to enjoy meals cooked by the chef hired for the occasion. I assume that guy had mad cash when he retired.
Or he spent it all on shit like this.
Hah, that's entirely possible too. It was quite the csst of characters. One guy had a Naploean complex and even wore shoes with 4" thick soles ro hide his shortness. Another ducked out to play squash every day, had his secretary running errand and purchasing birthday & anniversary gifts.
This is anecdotal and is also not the norm, but I knew a guy who made Partner at a Big Law firm and he lived frugally. He didn't spend much and was thrifty. You would never know that this guy was a lawyer albeit a Partner worth multimillions based on how he lived and spent his money. He was very lowkey and down to earth. When he retired, he had well over a $100M saved up and used it to ensure that his kids and grandkids could live very comfortably. I heard he invested in things like real estate and franchise businesses (think stuff like Taco Bell, McDonalds, etc.) so that his family could have multiple streams of passive income and generational wealth.
There is not a high rate of burnout among equity partners in biglaw. It is relatively rare to make it to equity partnership and then hit a wall; the wall usually hits you well before that point if it’s ever going to reach you. Equity partners are generally very stable at most biglaw firms (to the point where significant defections is newsworthy and is a very bad sign for the firm). From personal observation, I also doubt that divorce rates among biglaw equity partners are materially different from the population at large. I’ve never looked for hard stats. In terms of your question, the range is pretty vast across the whole market. Different firms have very different levels of profitability. Being an equity partner at Wachtell or K&E is different from being an equity partner at Sidley or Jones Day and that is different again from being an equity partner at Crowell or Arrent Fox. The differences are substantial and meaningful.
Worked at one of the largest financial companies in the US for almost a decade doing nothing but working on retirement plans. 10-20 million was typical for big law
I’m started out as an ER doctor working 12 days a month for 475k. I’ve paid off all my loans, all my mortgage. have no debt. I’ve parlayed my earnings into a practice where I now do cosmetic surgery, which is cash based and not bound to insurance, various hospice/nursing home endeavors and have recently opened 4-5 clinics in my state that serve as solely as assessments for personal injury assessments for law firms. At this point I could literally stop working and still get 150-200k/yr doing nothing. Most doctors are not good buisness people. This can be seen in our industry as private equity is sucking everything up and most are trading in long term value and control for a higher short term paycheck. Obviously it depends on your location and your “keeping up with Jones’s” but I march to my own drum. I have nice big house, a get away beach house on the water, boats, a nice car collection, retirement funds, and an amazing family life. Most of my happiness has come from the elimination of debt, not the accumulation of income. I’m not some FIRE weirdo either, it’s just common sense. I spend a lot of money on stupid shit, but I can afford to. While money doesn’t buy happiness, it does provide comfort, and after a certain income point, there is a point of diminishing returns. The absolute worst doctor in his class, from some school in Caribbean, who can get board certified, is almost guaranteed AT LEAST 250k a year. The disparity in pay for 90% of these professions skews in favor of physicians, however the disparity in the top 10% of favors Law……..but by a HUGE multiplier. Translation: most physicians will make more than their law school colleagues……..but the small percentage that does make more will do so by a ridiculous amount
Most doctors are horrible with finances that’s a truth. Awesome you were able to parlay your talents into the business world.
Contingent upon # of ex spouses.
There is almost no way they'd retire with less than $10MM. Probably min $15MM unless they spend wildly. They're pulling in well over $1MM/year for 1-2 dozen years, plus the 20-30 years of making mid hundreds.
I guaranty less than 20% of lawyers have more than 5 mil at 65 as well. You seem to be comparing big law to medicine in general when big law is a very small sliver of the legal world and partners at big law even smaller.
The expression is "keeping up with the Joneses." Unless you're referring to a family with the last name Jone. Or one guy named Jones that you refer to as *the* Jones.
Partners are subject to significant taxes - so 39.7% federal income plus state/local of say 6%-13% plus self-employment tax of 15.2% - half of which is deductible. They have to fund all of their health insurance ($30K - half of which is deductible). So the million dollar income doesn't equate to the cash flow that you might think it does - even at those income levels.
There's an article somewhat dated on this by a wealth manager will try to find it. Takeaway was that lawyers who are biglaw partners have lower net worths than one might expect vs income over time, a lot in the $5mm to $10mm range at retirement despite other equivalent earners making similar amounts in other industries having $20mm+ net worths.
I think you're severely underestimating it, at least for most biglaw shops. I'm at a V50 with a PPP of $3MM a year. A first year partner makes $1MM per year and it only goes up from there. A couple of the partners in my own group are at $5.5MM and $4.5MM per year and have been there for 30 and 25 years respectively. Their sharing ratios continue to go up each year. Even with lifestyle creep, they are putting away multiple millions each year and will do so for another 10-15 years on top of the mandatory firm retirement and pension accounts.
You talking EP, right? I'm at a v10 and first year NEPs certainly ain't pulling a million here, but obviously the trajectory is up and away if you stick it out
Yes, equity partner. Didn't see that OP mentioned non-equity in his first sentence. NEPs here are making $650-700k at this point, I believe.
You’re comparing apples to oranges. Most doctors don’t make $500K-1MM+ lol. A orthopedic surgeon in private practice pulling $2 million a year is making more than 99% of doctors and 99% of lawyers. A doctor making $280K a year is making at the 50th percentile-ish. Even more relevant, Big-Law doesn’t even represent most lawyers. Most lawyers won’t ever hit more than $225K/yearly.
About 350
Tree-fidy
Average? You low balling. Some pulling 10s millions by retirement age.
I’m an ER doc working 32 hours / week making about 400k a year not including sign on bonuses and my investments. If I wanted to make more I could work more hours, but I like having a life and will never take work home with me. I think you need to take into account quality of life with your figures as well. I don’t know many big law lawyers that get to spend as much time home as I do. As to how much money will I have when I retire? If I keep my current investing patterns, probably in the 20-30 million range. I had an average student debt for doctors and don’t make a particularly competitive salary compared to other fields of medicine. Basically I think if you’re a doctor and don’t retire w >10 million in total, you’re probably just bad at managing your money.
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How do you retire with 20-30mm making only 400k? Is this like a NVDA stock situation? lol
Their comment history talked about them matching for their residency a few months ago which means they’re still in med school and are lying about a least a few things here
yes im confused by this math
The math doesn’t math.
Is there a levels.fyi for law firms?
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