Under this headline, the June 17 edition of The American Lawyer compared the compensation ratios of top-paid partners vs. bottom-paid ones. They report that at some firms, the highest-paid partner made 24 times what the lowest-paid one made. The average multiple was 10.88.
It's official: Law has become professional sports, with a concentration of wealth at the top, i.e., where a handful of stars make staggering sums and the rest make relatively modest money (well, it's great money compared to the rest of us).
I'm not here to argue either the morality or the merits of this compensation arrangement, but to remind lawyers that this system has two effects that one can predict with bullet-proof reliability:
- If you want to make more money, you have to bring in business.
- If you don't bring in business, not only will your compensation continue downward, but you're expendable.
As to point #2, have you noticed that each year in the NFL (where the majority of contract pay isn't guaranteed), veterans are routinely replaced by younger players who make less money?
Law doesn't have an official salary cap, but there's a virtual cap. It's the total gross profit available to distribute among partners, or allocate to associates' bonuses. That means it's a zero-sum game. The more they give to those at the top, the less there is for the rest of you. AmLaw's article depicts a sharp trend. If the concentration at the top has doubled in only two years, what could make you believe that it will suddenly level off?
In February, 2011, I wrote a blog post, Make yourself irreplaceable, or finance the stars' wealth. It's just as timely today. Read it and take action to protect yourself.
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