In the Money - Paul Weiss' Scott Barshay Makes $15 Million Annually, Wall Street Banks' Managing Directors Pull Down Less than $2 Million

 The hours are about the same in top law firms and brandname Wall Street banks. So are the pressures. So is the prestige. But recently the money situation has changed.  Top dog in compensation, documents The Wall Street Journal, are now the law firms.

 Follow the history of the law-firm career path in “Servants of the Damned” by David Enrich and it is obvious that this is a relatively recent development. Essentially being a lawyer, even in an elite setting, had been a middle-class job. Not a wealth-builder. Currently if you can make it to partner or lateral in as one in the Am Law 100, you can become rich.

At the law firm Paul Weiss a partner at the top of the food chain such as Scott Barshay pulls down $15 million annually. A new partner, lateraled in, but with a powerhouse brandname Rob Kindler is expected to earn north of $10 million a year. That is probably more than he had been earning at Morgan Stanley. For 2022, at Paul Weiss the Profit Per Equity Partner had been over $6 million. So, even those not “stars” can have a lux lifestyle.

Meanwhile, the average managing director not overseeing a group at top financial institutions makes $1.9 million a year. Despite inflation, compensation has been stuck at that for three years. Bankers in lower rankings earn less.

What’s driving this shift of in the money toward lawyers and away from bankers include:

The market is absorbing increases in fees. Each year that’s at about 4%.

Lawyers take on the role of consultants. That ranges from guidance for succession to managing the regulatory risk. Paul Weiss chair Brad Karp invented the first-ever law-firm ESP practice to help CEOs navigate social issues.

Firms have entered new market segments. One has been private equity. For Paul Weiss PE firm Apollo is a major client.

Clients are caught in bet-the-ranch legal situations. They can’t afford to “lose” and top law firms are known to keep at it until they win.

The takeaway for those determined to become wealthy is to get a law degree, not the M.B.A. For now that makes sound financial sense. The era of the M.B.A. being the ticket seems so over. Many experts only recommend investing in it for a career change.

There’s also this: the emotional connection. Lawyers, not bankers, can steal our hearts in pop culture. Forever in Americana are Atticus Finch, Perry Mason, Denny Crane, Alicia Florrick and more.

 2023. It’s the year of AI, along with uncertainty, inflation, war and more. Jane Genova provides you with a complimentary check-in for your organization’s communications and your own career. It’s free. Content-creation and coaching provided on a sliding-scale fee basis. (for appointments text 203-468-8570 or janegenova374@gmail.com)