Twenty million dollars has become an increasingly common earning benchmark for lawyers in Biglaw, driven by competition from top firms. This trend is becoming increasingly significant due to the pressure from the high echelons of Biglaw. Recently, Simpson Thacher made headlines when it decided to adjust its top pay scale to meet the $20M benchmark.
Such moves create a ripple effect throughout Biglaw. Peter Zeughauser, chair of the Zeughauser Group, told Law.com that this change is notably benefiting top performers, especially younger ones, who wouldn’t traditionally experience such earnings under a standard tier system.
The demand for these top partners keeps growing, alongside their clients base. Kristin Stark, a principal at consulting firm Fairfax Associates, attributes these pay scales to heightened demand for services and the ability of these individuals to greatly increase the size of their portfolio, which were already substantial to begin with.
Changes are evident in Davis Polk with leader Neil Barr asserting that they will be leaning into the market to advance their strategic objectives. Meanwhile, Weil Gotshal is updating its criteria for partner compensation. Even Cleary Gottlieb, often considered the standard-setter for lockstep partner compensation, has reportedly abandoned the former standards.
The most affluent Biglaw firms seem to be the only ones poised to compete for the biggest rainmakers in the most lucrative practice areas. The stratification between the Biglaw haves and have-nots seems destined to grow even further.