Pay for Lawyers Is So High People Are Comparing It to the N.B.A.
John Peterson, founding partner at CenterPeak
Top partners are the new NBA stars.
Hotshot Wall Street lawyers are now so in demand that bidding wars between firms for their services can resemble the frenzy among teams to sign star athletes.
Eight-figure pay packages — rare a decade ago — are increasingly common for corporate lawyers at the top of their game, and many of these new heavy hitters have one thing in common: private equity.
“Twenty million dollars is the new $10 million,”
said Sabina Lippman, a partner and co-founder of the legal recruiter Lippman Jungers. In the past few years, at least 10 law firms have spent — or acknowledged to Ms. Lippman that they need to spend — around $20 million a year or more to lure the highest-profile lawyers.
In recent years, highly profitable private equity giants like Apollo, Blackstone and KKR have moved beyond company buyouts into real estate, private lending, insurance and other businesses, amassing trillions of dollars in assets. As their demand for legal services has skyrocketed, they have become big revenue drivers for law firms.
“Law firms have gotten a lot more commercial in how they run themselves,”
said Neil Barr, the chair and managing partner of Davis Polk.
“Firms are operating like businesses rather than old-school partnerships, and it’s led to more rational business behavior.”
“Law firms want people who are going to be motivated based on culture,”
said Ms. Lippman, the recruiter.
“But at some point if you have this big difference between firms, everyone has a price.”
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