In short, the money you get as an associate is good for a few years; your exits usually involve in-house or partnership at a smaller (non-US/MC) firm, where you will earn less. Certain in-house roles pay well, but come with issues. Partnership at mid markets or small city firms usually involves peanuts as salaried / fixed share partner (i.e. senior associate with a title) for 3-7 years, and then being bottom of the equity. The points system is so obscure, and most associates have no idea how awful and political it is. Sometimes points are given for the time served at the firm, work won, team billables and who can suck up best to any relevant committee. The money isn’t that great for most of equity – most equity partners earn much less than the PEP figures, it’s distorted upwards wildly by a select few.
Also divorce in yours 40s/50s/60s a real killer on net wealth, and it does happen frequently. If you want to see a worked example including all financials, this is a good one re the litigation head of a MC firm (i.e. not just a normal or fresh partner, head of whole team):
]]>This is totally incorrect – yes, some firms have “salary bunching” on their pay scales to a greater or lesser extent, but the salary scales themselves have been moving up at a rate of knots in recent years – so when you are (e.g.) 3 years more PQE than you are now, you’re not going to be paid whatever the rack rate is now, you’re getting whatever it is in three years’ time.
When I was an NQ (MC) I earned £77.5k – NQs today (less than 10 years later) are now essentially double that (plus better bonuses) – and I don’t have the figure to hand for what my current PQE rate would have been paid when I qualified but I can guarantee it was also significantly lower than what I get now.
]]>What kind of careers were these MC NQs leaving to?
]]>Easy to say for a man who bought when house prices were at normal rates rather than the insane prices they are now at.
]]>That’s not the point (and also not really true: 99% of associates won’t ever be partners and with bunching these days salaries don’t go up a huge amount before partnership, and it now takes 12-15 years to get to equity vs the 7 years it took in the author’s day).
The point is he is calling these salaries “absurd” and patronising young associates by telling them they shouldn’t lose sight of their morals and dignity when accepting these great mountains of wealth.
And he’s saying that while sitting on a mountain of wealth that is literally 100s of times bigger and was built out of the blood, sweat and tears of young associates over his decades as a partner.
]]>Right… you are slightly flawed here in that there exists a wonderful phenomenon called salary progression, meaning a worker is not forever paid only the salary on which they start, and nothing more.
I presume the vast proportion of the author’s fortune was made as a partner, rather than as an associate
]]>What is especially annoying about this author is he will be living in a £4-5m mansion and have millions of pounds in investments, fly business class everywhere and have 5-10 holidays per year staying in Aman and Four Seasons hotels.
An associate on £150k, starting life with £60k of student debt and paying £1k/month to live in a student flat in zone 4, will only be able to save maybe £40k/year after tax and basic expenses, and that’s living like a Franciscan monk.
Yea that’s £40k more than the average person, but it will still take them 100 years working like that to be able to buy the author’s £5m mansion. And the associate will have to give almost every minute of their life to their paymasters for the privilege of that £40k.
]]>Important section to highlight. All firms will do well to remember this and a solicitor’s ethics. Prioritise clients interests and stop making it all about targets and billables!
]]>Agreed. I was naïvely surprised at the magic circle firm which I was a trainee by the number of people who simply wished to do their training contract, do two years, and then leave. It was seen very much as a CV-filling exercise.
One other alternative is to do something exciting in your early 20s, and then change career into law after that. The most obvious example is a commission in the armed forces.
]]>I was at a Magic Circle firm as a trainee, then a US firm. We used 6-min increments at both. The latter paid us [far] more because we did more work, we acted for claimants (who actually chose to litigate), and the partners didn’t waste money on boondoggles and support staff. Most of the antipathy to US firms appears to be jealously and/or snobbery.
]]>It’s not as though smaller or regional firms – with shitty salaries – are benevolent employers with caring CPD programmes, have time to train associates, and don’t bleed their associates dry. They are just poorly paid alternatives that will always be there for people who start at the top.
]]>Jones Day were dinged by the High Court this year for using 15 minute segments for litigation matters. Still not as bad as certain other professions I’m aware of, which bill “per hour or part thereof” and somehow get away with it…
]]>…Fraud, in other words.
]]>1 unit = 15 minutes rather than the standard 6 minutes
]]>Agreed. It’s insane to hear about associates (particularly at US firms) billing c. 3k hours a year. Like yes of course they are busy but surely there has to be a paddin’ to those figures. Also, what is the 15 minute segment you speak of?
]]>The problem is that it’s easy for a former MC partner to make the suggestion to go with your principles, but the UK is in a complete mess after the last 15 years. Young people simply cannot buy a house anywhere that isn’t a shithole without BOMAD and/or a seriously good salary.
The best the country is going to do for the foreseeable future is to limp along, before inevitably people vote for some lunatic far right government in a few years time and crash us even further into corruption, decay and unrest. The only protection against the consequences of that is to have lots of money and a good job.
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