How Much Do Law Firm Partners Make?
According to data from PayScale, the average base salary for a law firm partner is around $187,994 per year as of 2021. However, this salary can vary greatly based on experience, seniority, and location.
The Job Duties of a Law Firm Partner
Law firm partners act as joint owners of a law firm and work to keep it operational. A law firm partner's duties include managing budgets and relationships with various vendors, overseeing teams, and organizing new cases. In addition, they're often responsible for making sure the law firm is in compliance with all regulations at the local, state, and federal levels. Partners may also need to provide legal advice and guidance when working with attorneys, handling and balancing cases, and completing HR functions such as hiring staff and managing payroll.
Many types of law firms have law firm partners, whether it's a big law firm or a small one, or a firm with a specific practice area, such as personal injury or immigration law.
How to Qualify as a Law Firm Partner
Law firm partners need to have a degree from an accredited law school. They also must have passed the bar in the state where they plan to practice law.
When it comes to experience, law firm partners need previous experience as attorneys, demonstrating a deep understanding of their practice areas, along with other skills. Apart from legal experience and expertise, law firm partners also need to have proven skills in other areas such as computation, communication, and organization. Law firm partners must be able to work with a team including attorneys and other staff.
How Much Compensation Do Law Firm Partners Receive?
Generally, there are four compensation systems used to decide on how much a law firm partner should make:
- Black box — This is determined through a compensation committee and isn't typically disclosed
- Formula — A formula may be used as a quick and simple way to determine a partner's salary
- Hybrid — Uses both black box and formula systems
- Lockstep — The payment the law firm partner receives will depend on partner level, as first-year partners are all paid the same, second-year partners receive a higher payment, and the pay level increases for each year of experience.
The method used to determine compensation can be indicative of the firm's corporate culture. For instance, a workers' compensation law firm that uses a more transparent formula-based compensation system is likely to have equally open management systems. In addition to base salary, factors influencing total pay include bonuses, profit sharing, commission, and tips, among other elements.
According to PayScale, the specific amount of pay that law firm partners receive has a wide range depending primarily on experience. Law firm partners with one to four years of experience normally earn around $118,408, based on PayScale's analysis of 18 salaries, which includes bonuses, tips, and overtime. Another 96 salaries determined that the average pay for partners with five to nine years of experience is around $150,073. More experienced partners with 10 to 19 years of experience earn an average of $186,841, and partners later in their careers with 20 years of experience or more earn an average of $211,532.
Equity and Non-Equity Partners
Many law firms also require firm partners to invest in the firm as a contribution to the firm's working capital. The buy-in amount is normally a percentage of the total amount of compensation that the equity partner makes in a year. Partners who don't have the amount of money to cover that buy-in can often receive a loan from the firm's bank, and repaying the buy-in can take around two to five years.
Non-equity partners, on the other hand, will receive a total compensation amount that is often much lower than that of an equity partner.
Ultimately, compensation for law firm partners can make the work rewarding, but it depends on many factors to consider, from experience to the specific relationship with the firm.
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