Tag Archives: Legal Recruiter

Who Is Better Compensated: Elite Biglaw Partners Or Top General Counsel?

If you’ve paid any attention to the ballooning compensation figures of Biglaw partners in recent years, you already know that it pays to be an equity partner at a large firm. Meanwhile, as average partner compensation escalates, top in-house lawyers are being left behind.   

In 2020, a Major Lindsey & Africa survey of partners in “Am Law 200 size firms” found average compensation of above $1 million. The ALM Intelligence 2020 Law Department Compensation Benchmarking Survey found general counsel and chief legal officers earned average total compensation of $573,000. So, as a general rule, it’s more lucrative to be a Biglaw partner than a general counsel.

But what about at the very top end of the profession? In this article, we take a look at the pay packages of the top 100 highest-paid general counsels, in comparison to partners of top Biglaw firms (as measured by profits per equity partner). We find that on a cash compensation basis, equity partnership is more lucrative than being a general counsel. But the story is more complicated when taking stock options into account.

A quick note on sources. For general counsel compensation data, we look at the top 100 highest-paid GCs as listed in the 2020 ALM Intelligence GC Compensation Survey. This data set is not comprehensive. For one thing, ALM compiles its data from proxy statements filed with the SEC, so only public companies are included. Our source for Biglaw partner compensation is the 2020 edition of the Am Law 200 ranking.

It’s hard to outearn a top Biglaw partner

The General Counsel Compensation Survey ranks general counsels based on total cash compensation. The top 100 highest-paid GCs earned total cash compensation of $2.42 million on average. We don’t know how much the 100 best-paid Biglaw partners earned in the comparable period, but we can say that the top firm in the Am Law ranking — Wachtell — had 85 equity partners and profits per partner of $6.33 million.

Just two general counsels took home cash compensation higher than $6.33 million: Alan Braverman of Disney ($8 million) and Eric Grossman of Morgan Stanley ($6.94 million). Meanwhile, 38 Am Law firms had profits per equity partner in excess of the $2.42 million average general counsel cash compensation.

How does this compare to the situation a decade earlier? Analyzing the 2010 editions of the same surveys, we find that not much has changed. Based on the 2010 General Counsel Compensation Survey, the top 100 general counsels took home average total cash compensation of $1.56 million. Wachtell’s profits per partner were $4.3 million, a figure exceeded by just one general counsel. 28 Am Law firms had higher profits per equity partner than the $1.56 million general counsel average.

What about compensation growth over that ten-year period? From a growth perspective, who did better: the top 100 general counsels or the partnership of the top Am Law firms? The table below shows the results, ranked by growth rate. The law firms in the table were the top 10 firms in the 2010 Am Law 200. We see that general counsels fall in the middle of the pack, outpacing some partnerships and trailing others.

Group (equity partnership or GCs)10-year compensation growth
Kirkland & Ellis108%
Simpson Thacher83%
Paul, Weiss75%
Cravath63%
Sullivan & Cromwell57%
Top 100 GCs55%
Cahill Gordon51%
Wachtell47%
Quinn Emanuel46%
Boies, Schiller17%
Irell & Manella8%

But stock options can make a big difference

The comparisons above obscure some important factors. On the in-house side, it is critical to note that the very highest-earning general counsels receive a substantial portion of their compensation in the form of equity. Taking stock options into account, some general counsel roles start to look considerably more attractive. For example, revisiting the 2020 surveys, when accounting for equity compensation, the number of general counsels topping Wachtell’s profits per partner rises from two to 41. And some of the general counsels have total compensation that would exceed that of even the highest-paid Biglaw rainmaker. For example, Chewy GC Susan Helfrick had total compensation of $30.3 million (of which less than $1 million was in cash). Apple GC Kate Adams had cash compensation of $3.56 million, but her total compensation was $25.2 million.

On the law firm side, profits per equity partner gives little indication of the rewards that flow to top rainmakers. Firms vary widely in their compensation ranges. At the most traditional end of the spectrum, a firm’s highest-paid partner might take home 4x the pay of the lowest-paid partner. In contrast, at a firm with a strong eat-what-you-kill culture, that ratio may be 10x or higher. A 2018 New York Times article about the lateral talent wars reported on eight-figure pay packages for star hires at firms like Kirkland & Ellis and Paul, Weiss. It’s impossible to know how many Biglaw attorneys have breached $10 million, but the lateral market for partners with a strong book of business remains red hot.

Conclusion

There are a lot of reasons why an attorney might prefer to be a general counsel than a law firm partner. But viewed strictly through the lens of compensation, high-performing lawyers are typically better off staying on the law firm track. Of course, that doesn’t necessarily mean they should stick with their current firm. With Biglaw partnerships increasingly diverging in their approaches to compensation, it’s a mistake to assume that a partner with a given book of business will be paid similarly at any comparably prestigious firm. Productive partners have a variety of options — and it pays to know about them.

8 Time Management Tips for Young Lawyers

As an associate, you often have limited control over your own schedule — but there are still some actions you can take to improve your use of time and cut out unnecessary stress.

If you’re an associate, you’re probably thinking, “What?! As if I have any control over my own schedule!” And you’re right, your ability to manage your time will never be perfect.

I understand. I was an associate myself for seven-plus years. But there are still some actions you can take to improve your use of time and cut out some of the unnecessary stress.

I understand. I was an associate myself for seven-plus years. But there are still some actions you can take to improve your use of time and cut out some of the unnecessary stress.

  1. When you are given a new assignment, always ask right away what the deadline is. I can’t tell you how many times as an associate I failed to ask this important question because I said to myself, “This will take no time at all, I can do it right away,” only to have a more urgent task land on my desk — and I wished I’d asked upfront instead of begging for more time later on.
  2. Many of us lawyers are Type A personalities, and we love that feeling of completing a task and checking it off the “to do” list. But I find the easiest way to prevent procrastinating about the next task is to start it right away. Just get three minutes in, then you can take that coffee or bathroom break. When I’m jumping back into an established rhythm instead of getting my mind around a new project, it’s much easier to get back to work.
  3. Believe that there is no such thing as a huge, daunting project. Everything can be broken down into smaller, bite-sized morsels. Take on one mini-project at a time.
  4. Put everything on your calendar. I assume I won’t remember anything. I include project deadlines and my to-do list items as 30-minute calendar entries. I have repeating calendar reminders to pay my credit card bills, renew my dog’s license annually… there is nothing in my life not on my calendar because the last thing I want to be stressed about is that I may have forgotten something I need to be stressed about!
  5. I also block time for work (and personal) projects on my calendar. Even if I end up changing the start and end times multiple times, it helps me to be able to eyeball my projects for the day, estimate how long they will take, and plan accordingly.
  6. Find ways to use your down time productively. What down time? Even law firm associates have down time. Mine often came at 1 a.m. as I was waiting on a senior lawyer to send me the next mark-up. But I was determined to reclaim this time for myself. So what did I do? I started a travel blog. It was a creative outlet I could turn to even at my desk in the middle of the night. So those late nights in the office were not a complete waste in terms of my personal life. I also made a point of having dinner with a work friend almost every night, even if it was for 10 minutes at their desk or mine. If you’re not inclined to start a blog or write a novel or screenplay, use your scarce breaks to update your resume and deal sheet, work on a business plan, keep in touch with contacts (build relationships!). Or research for your next vacation! Have a plan for how you’ll use your free time so it doesn’t go to waste.
  7. Whatever your goal may be — hitting the gym a few times a week, putting together a business plan, catching up with one law school classmate each day — establish an accountability partner. It could be a friend, a colleague or even a journal. Keeping track will help keep you honest!
  8. If you’re truly feeling underwater, ask for help. Firms are investing more and more into associate life and associate development resources. Even if you’re not comfortable talking with a partner, there is likely someone you can talk with. And you can always reach out to a trusted recruiter to learn what your realistic options might be for a new job offering a better work-life balance.

Making small changes to your daily routines may buy you only a few extra minutes each day at this stage in your career, but these actions will help you build good habits for when you do gradually take on more control of your schedule. I’d love to hear what time management tricks have worked for you!

How Did Biglaw Firms Fare Financially In 2020?

Pretty, pretty well, in terms of both revenue and profit.

Color me surprised — or even shocked. I’ve been following the American Lawyer’s early reporting on Am Law 200 law firm financials for 2020, and the numbers so far are good, even great.

Despite the coronavirus pandemic and recession that made life so miserable for millions last year, law firms did very well for themselves. Check out this table, showing the firms that Am Law has covered so far and the year-over-year change in their revenue per lawyer (RPL) and profit per equity partner (PPEP):

(If you like, you can access this spreadsheet as a Google Doc here, which also allows you to sort the firms by the change in their RPL and PPEP.)

Of the 29 firms listed above, all posted increases in profit per partner, many of them well into the double digits. The highest figure so far, a 46.6 percent increase, was reported by Crowell & Moring (which led me to declare Crowell my Law Firm of the Week last week). But the firm had plenty of company, with eight other firms posting PPEP increases of 20 percent or more.

Now, the increases in profit per partner might be somewhat understandable, given how the pandemic and working remotely led to dramatic drops in many firms’ expenses, such as rent (in some cases), utilities, travel, and entertainment. And yes, some firms did engage in layoffs last year as well.

But revenue per lawyer, which industry observers generally regard as the better metric of law firm financial health (since it’s less subject to manipulation than PPEP), also increased for almost all firms — not as dramatically as PPEP, but still significantly. In recent years, RPL growth in the low single digits has been quite common in Biglaw; but last year, if these early numbers are representative of the whole, perhaps half of Am Law 200 firms enjoyed RPL growth of 5 percent or more in 2020.

In light of these robust revenues and profits, one can understand why law firms paid out “COVID bonuses.” Take Cooley, which kicked off the trend by announcing “appreciation bonuses” in September 2020. The firm posted PPEP growth of a whopping 25.4 percent in 2020. Had Cooley not paid out special bonuses, then reported PPEP growth in excess of 25 percent, it would have had a lot of unhappy campers among its associates and staff.

Congratulations to these firms on their strong performances in 2020. People like to say that lawyers are not good businesspeople, but clearly lawyers are doing something right. The ability of the legal sector to do so well during a period of great difficulty for many other industries is a testament not just to the talent and hard work of Biglaw lawyers and staff, but also to firm leadership. So the next time you encounter one of your firm’s leaders, perhaps in a Zoom town hall rather than in a hallway or conference room, thank them for successfully shepherding your firm through some very dark days.

What do these strong numbers mean for lawyers interested in lateral moves? They indicate that now is a safe time to transition to a new opportunity. Last spring, when the pandemic was at its peak, the economy was in a recession, and law firms were very worried about how they’d fare, it was a risky time to move; candidates feared moving to firms that might hit rough patches after their arrival, threatening their job security as associates or their practices as partners. But now that the economy is on the mend and law firms are not just surviving but thriving, it’s a good time to move to a firm where you’d be more fulfilled.

If you’re thinking about a possible move, please feel free to reach out to me or any of my colleagues to discuss possible opportunities. We look forward to hearing from you.

To Clerk, Or Not To Clerk?

Whether you should do a clerkship depends on a number of factors, as this handy flowchart by Abby Gordon explains.

An important question for law students and recently barred lawyers is whether or not to apply for a clerkship. My advice? It depends. Here are some questions you can answer to help you decide.

If you’d like to discuss your specific circumstances and whether or not it makes sense for you to apply to or accept an offer to clerk, feel free to reach out to me or any of my Lateral Link colleagues.