the economics of biglaw firms

[bennguyen]

In other words, the new people make the firm around $2millions but only gets paid like $250k-ish. So they are making the forms 1.75millions.
And when you’re a senior partner, you get to buy into the firm. It’s like buying the firm’s stock and you get to share in with the profits made. Which means, senior partners might make a salary of $500k plus a chunk of the $1.75 millions made by the associates. It’s like buying a company’s stock and getting paid dividends. Crazy thing is, there’s usually like 20 partners at a huge firm and they usually have like 3-5 associates for every partner. So imagine how much “dividends” there’s guys make from just dipping their fingers into the associates’s billable. So they don’t care if the associates billable are only half of their with a difference of 25-30 years of experience. They would make it equal if they could. If that makes sense. Learned that from SUITS LOL.

[Ayten]

Its like welding shops selling your labor for $300/hr and paying you $30

[swankyangelo]

So the partners get a base from the firm and then they also get paid from the revenue? Because what you make for the firm versus what you actually get is so different! Wow

[TheSunnyD]

I have no idea what you just said but I still love your videos :)

[gggusc]

There is a ton of overhead in big firms as well as you are working off of their prestige.

[sethland]

Your math should include employer contributions to benefits, 401k, taxes, and I’m guessing any fees needed to keep associates bar status up to date. Thats just the base marginal cost per employee. Then there’s plenty of overhead of office, admins, clerks, subscriptions, and time spent getting business. I’m getting senior partners bill a little bit to cases they helped to procure since they are more marketing value than raw case work.

[OKMRDX]

So what I got from this video is, im broke.

[sadiqulislam]

I think its a fair split. Considering you are guaranteed a salary and a bonus, training and infinite work which is brought in through the firms name and some partners. And as you grow older, i am sure you dont want to work as hard and earn less return on investment and so everyone should enjoy progressing, knowing their life is getting better (mostly monetary... what was that pie saying 😅).

[missellehansen]

Most people won't understand that the Delta you mentioned is profitability. You're always going to get better profitability on lower associate billed hours.

[rezzob]

I think the real scandal is that even with those sort of robbery rates and basically abusing juniors, they streak went bankrupt which means someone stole money

[donaldlee]

Seems like the client isn't getting great value for the rate they pay.

[MesRevesEnRose]

Me having worked in consulting where we know how much each team member is billing the client and being surprised other people are surprised at this: 👁️👄👁️

[regularity]

Couldn't you make that clearer, what's delta

[johncanaparius]

Not quite. This assumes 100% recovery for hours recorded which is rarely the case.

[gggusc]

So glad to be a doc in LA then a barrister in NYC

[humairimam]

Thats a good rate
I want to be at this rate
Thank you for this motivation

[grimmm]

I see this in the firm I work for, as a junior, and I'm now starting to think about opening my own firm.

[codetracker]

I love watching you grow and evolve!!! Your confidence lights up your face now! If that even makes any sense haha, you all know what I mean ☺️

[panda-qpgf]

Hey Cece, thanks for the video! When do you think we'll see another increase in big law associate salaries?

[SBayne]

People need to realize that this is the way the world works. A business owner is billing the customers large enough fees so that way they can pay the salaries and trying to maximize the difference between the two while taking two weeks count overhead and direct costs. Anybody upset and not getting paid more, the solution is simple, start your own business and pay yourself whatever you want.