Where All That Associate Money Goes

Graduate School Law School
1

<p>These are some exerpts from an article published yesterday in The Recorder, a California legal publication, that you might find interesting. </p>

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Kathryn Cole, a 25-year-old who earned her J.D. last year from the University of Michigan Law School, accepted a position at Quinn Emanuel Urquhart Oliver & Hedges in Silicon Valley. Her starting pay was $135,000, but before she even began working she got a $10,000 raise. Then in January, just a few months into the job, her salary went up another $15,000. </p>

<p>Cole, who grew up in rural South Carolina, said she makes more than both her parents combined. On learning about her salary hike, she headed to Cost Plus World Market and bought a new couch for $500. "It was off-white," she said. "But having gotten that second raise, I spent the extra $60 for the dark green slipcover that I really wanted." </p>

<p>That was the extent of her splurge. She and her husband rent a townhouse in Redwood Shores, and dine at home most nights. The raise will allow Cole to pay off her law school loans faster, she says, so that they can start saving to buy a house somewhere on the Peninsula.

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According to online compensation provider Payscale.com, the median San Francisco attorney makes $89,827. Meanwhile, a software developer earns about $75,800 and an architect around $62,300.

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. . . several young lawyers interviewed for this story seemed more concerned with the practical items in life than with spending their earnings lavishly. None said they felt particularly wealthy and none admitted to a big celebratory splurge.

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Still, most said their lifestyle is comfortable ? if not luxurious ? and several admitted under the cloak of anonymity to driving shiny BMWs and paying higher rent to live without roommates in expensive neighborhoods.

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Edwards, a patent litigator and Idaho native, said he's now making about twice as much as his friends in smaller markets. His disposable income, however, isn't double theirs. </p>

<p>"It's a lot," Edwards, 30, said, "but so much tax goes out of the realized money that I'm receiving ? and the cost of living ? it still feels like I'm not wealthy," he added. "Some friends in smaller markets like Phoenix are already buying houses."</p>

<p>Edwards, who has two small children under the age of five, rents a two-bedroom house in Millbrae and drives a 1995 Toyota Tercel.

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Loan payments can run more than $10,000 a year. According to the nonprofit Law School Admission Council, best known for administering the LSAT, the average debt for graduates who took out both federal and private loans is about $90,000. That amounts to payments of almost $1,100 per month on a 10-year plan. </p>

<p>Then there is Uncle Sam and his relatives. Federal and state income taxes combined shave nearly $50,000 off annual compensation of $160,000 if you're single, according to Chris Kollaja, an accountant with A.L. Nella & Co.

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And don't forget about clothes, dining out, booze, entertainment, cars and rent. One first-year associate who spoke on condition of anonymity said he drives a BMW and pays $2,200 per month for his Los Altos apartment, roommate-free.

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2

<p>Interesting read</p>

3

<p>^ Agreed. I always appreciate the articles you share, sally. Thanks again.</p>

4

<p>Here are some more exerpts from an article published today about the effects on law firms of the recently increased salaries for young lawyers. The exerpts are a bit long, but worth the read (the article was much longer!). </p>

<p>To summarize the author's stated likely results of the latest salary wars:</p>

<ol>
<li> Law firms will name fewer partners and will remove partners who are not producing sufficiently from the partnership in order to maintain high Profits Per Equity Partner (where partnership was once something that, once achieved, was rarely taken away).</li>
<li> Annual raises will be sliced, and firms where lockstep raises and bonuses were once the norm (meaning that everyone who performed to some minimum level of competency received the same raise and bonus) will begin to dole out raises and bonuses on an individualized basis. Unfortunately, this leaves room for an individual to get screwed based on one or more minor incidents or disagreements with one senior associate or partner, and pushes associates to bill more and longer hours in order to ensure their own survival.</li>
<li> Firms will hire fewer first year associates right out of law school, instead focusing on hiring more seasoned and more profitable mid-level associates.</li>
<li> Firms will hire more contract lawyers, who typically make much less money than their associate counterparts, and who lack job security.</li>
</ol>

<p>Read on . . . </p>

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Will Associate Pay Hikes Fracture the BigLaw Machine?

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ATLANTA -- BigLaw firms spent lavishly on associate pay raises in February, and it appears at first glance they could afford it. Our 2007 Daily Report Dozen survey shows that the nine general practice firms on our list of Atlanta's leading firms posted an average 14 percent increase in revenue last year, while profits increased 13.3 percent. </p>

<p>The city's biggest and most profitable firm, King & Spalding, increased average profit per equity partner a whopping $262,623 to $1.3 million, a 25 percent increase. Not coincidentally, law firms' clients also had a banner year. Fortune 500 companies as a group showed a 29 percent increase in profits, ringing up a record $785 billion in 2006. So with clients and partners awash in money, why shouldn't some of it trickle down to junior associates?

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Despite their flush balance sheets, law firm leaders and general counsels expressed unease about paying such high salaries to inexperienced young associates. "It is a significant increase in expenses," said Clark N. Davis, the executive director of Sutherland Asbill & Brennan. "It will impact the bottom line." </p>

<p>"Clients, and just business leaders on the street, when they see the stories about it … they're shocked by it, they're surprised by it, and clients obviously are worried about the cost impacting them," said Jeffrey K. Haidet, the managing partner of McKenna Long & Aldridge.

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It may not appear that these multimillion dollar pay increases are hurting profits since profit per equity partner, or PPEP, continued to skyrocket at most big Atlanta firms last year. But PPEP is a highly malleable number. And given its importance in attracting and retaining lateral partners—who are key to successful growth—firms are determined to keep the number high.

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The conventional wisdom is that firms will cover the raises by reducing partners' profits, making associates work more hours or raising rates for clients. But they are making other, more subtle adjustments as well. </p>

<p>Big firms' most obvious response to the opposing pressures of paying associates like royalty while keeping profits high has been to tinker with the math, boosting PPEP [for those who are curious, PPEP is Profits Per Equity Partner, a leading measure of the profitability and success of law firms] by weeding out equity partners whom they deem insufficiently profitable. </p>

<p>Profits per equity partner at Morris, Manning & Martin shot up $139,466 last year, to $805,372—a 21 percent increase—even though revenue increased only 3.5 percent and revenue per lawyer increased only 2.8 percent. But the firm also reported 46 equity partners in 2006—21 fewer than in 2005—which helps explain how PPEP could spike so dramatically without any commensurate revenue increase.

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In another, very public example, the Chicago firm Mayer, Brown, Rowe & Maw demoted or fired 45 equity partners last month to beef up its profits; in 2005 the firm ranked eighth in revenue in the Am Law 100, but only 51st in profits.

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Firms also are lessening the blow to the bottom line by paying at the top of the market for first-years but making smaller raises up the classes of associates, which compresses the pay scale for senior associates and junior partners. Annual raises are no longer uniform by class, which further compresses the pay scale. Instead most firms now raise pay based on individual merit for more senior associates. Some are raising pay in lockstep only for first- through third-year associates and a few have even switched to merit increases after the first year.

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Powell Goldstein's managing partner, James J. McAlpin Jr., said his firm started hiring smaller first-year classes several years ago in response to the higher salaries. He said there is an industry trend toward hiring more mid-level associates.

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With big firms already charging roughly $215 an hour for the services of a first-year associate, their clients are paying attention to the pay raises. </p>

<p>"From a client perspective, they're not worth the rates. They're smart girls and boys but they have not practiced law yet," said Allen W. Nelson, the general counsel of Crawford & Co. He added that he understands law firms need to "protect their margins," but said, "It makes it more difficult for someone in my chair to support that. I've got to pay for it." </p>

<p>He pointed out that a first-year lawyer at a big firm has no more experience than a first-year at a smaller firm with a lower rate.

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Crawfprd & Co. has not shifted its work to smaller, lower-overhead firms in response to rate increases and continues to use a "certain core group of firms" for key issues. But he said that his legal department does more work in-house than it used to. "We've reduced the legal spend considerably," he said.

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Contract attorneys are another alternative to entry-level associates, particularly for mundane work such as document review. Contract attorneys used to be lawyers between jobs or part-timers, but as associate rates have risen and the number of documents to be reviewed has exploded, a growing cadre of lawyers are making a career out of contract work, said Paul M. Talmadge Jr. of the Partners Group. He said the majority of the contract attorneys that his firm places are permanent freelancers.

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The cost differential is substantial. A recent job posting by King & Spalding for a contract attorney offered $55,000 and no benefits.

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Firms are run differently now, Nelson said. "There is much more of a focus on production," Nelson said. "There is no way the model can sustain the kind of intellectual, erudite lawyer who was around to ask questions about things when I was a young associate. In my experience, these were lawyers who were great people to go ask ethical and ombudsman-type questions. They did not do a lot of billing, but they were incredibly valuable resources.

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Gary said the more bottom-line-oriented model puts pressure on associates as well. "To maintain profitability, firms, in addition to increasing rates, must increase the productivity of associates—which is not necessarily a good thing for the associates," he said.

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In law firms, cultural changes can have economic consequences: If associates grow unhappy enough with the long hours and pressurized culture of billing, they leave. Turnover has become a major headache for big firms. According to a widely quoted National Association for Law Placement Foundation statistic, 78 percent of associates at big firms leave by their fifth year—often to go in-house. And 40 percent leave by year three, just when firms start making a return on their investments.

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5

<p>Hey Sally, just curious, did most of your classmates take loans for tuition?
Most lawyers/law students I met either chose a cheaper/state school, went to a less famous school that offered them aid or scholarships, or had their parents or employer pay for tuition.</p>

<p>Even with the $10k/10yr loan repayment plan, a lawyer would be out of loan debt at age 35 making $200k-300k or a lot more. That's if the lawyer only paid the minimum each month. $10k a year on a $140k salary may be significant, but not that significant.</p>

<p>If work takes 80hrs a week, tho, the hourly wage for $140 isn't that great.</p>

<p>Interesting to learn that partners can be fired; I had the impression that they were like tenured profs.</p>

<p>"Unfortunately, this leaves room for an individual to get screwed based on one or more minor incidents or disagreements with one senior associate or partner" -sounds like guaranteed disagreements!</p>

6

<p>"Interesting to learn that partners can be fired; I had the impression that they were like tenured profs."</p>

<p>Hahahahaha! That's a good one!</p>

<p>Oops, sorry about that. Anyway, the days of guaranteed employment for partners is over. Partners work just as hard, or even harder, than the associates they manage these days. Also, it's no longer enough to be a good attorney to make partner. You need a book of business as well to keep that money rolling in. After I made partner, I definitely put in more hours than I had as an associate and had to deal with the petty politics of my fellow partners, law firm management issues, etc. on top of that. Not fun at all. If you don't produce, you get canned. Being a partner just means that the partners have to vote you out through whatever procedures they have in the partnership agreement. Oh, and don't forget about the buy-in (for some reason, people overlook the fact that partnership is a pay-to-play system. You have to pay money to get equity in the firm. My buy-in was $50K, but I've seen some as high as $250K!). </p>

<p>My favorite quote regarding partnership: making partner is like winning a pie eating contest where the prize is more pie.</p>

<p>I'm so glad I'm in a corporation now, even if it means less pay.</p>

7

<p>I honestly don't know who among my classmates, other than my closest friends, took loans for law school tuition. It wasn't something that most people talked about. As far as I know, none of my classmates had their law school education paid for by an employer. To my knowledge, it isn't a very common practice for employers to pay for someone's law school education mainly because a law school graduate without legal experience is hardly capable of giving sound legal advice and corporations lack the time and resources to train new lawyers, and because it is so easy to simply hire a lawyer in a particular area with experience. </p>

<p>It did seem that many of my classmates came from fairly affluent families, and I suspect that many of them had full or partial financial assistance from their families during law school. Speaking for myself, I paid for every penny of my law school education myself. Unfortunately, though, when applying for law school financial aid, even if you are completely financially independent of your parents and if you have spent time after graduation from college working and supporting yourself, you will have to submit your parents' financial information until you are between 25-30 years old, depending upon the law school. I had law school classmates who were married, with children of their own, and who had worked for years before beginning law school, who had to submit their parents' financial information. Crazy, right? I was given some smallish grants, and I took both federal student loans (to the max allowed) and private loans to finance my education. I also had to take an advance from my law firm to support myself while I studied for the bar exam the summer after graduation.</p>

<p>When I graduated from law school, and after all of the accrued and unpaid interest on the student loans from years one and two of law school were capitalized into my loans, I had over $140,000 in student loans outstanding (I also still had some undergrad student loans outstanding, but I paid off a portion of them while working for a few years before law school). Today, with the increases in law school tuition and fees, someone in the same position as me would have probably $40,000 - $50,000 more in loans. I consolidated the loans that it made sense to consolidate, and my monthly student loan payments were approximately $1,525. That was a huge chunk of after-tax change!!! Add that to taxes (painful!), rent (shared one bedroom apartment in a so-so neighborhood in Manhattan) and expenses, and I was living paycheck to paycheck for my first couple of years out of law school. The loans would be repaid over 15 years. I managed (with a lot of scrimping and saving, and by deferring a lot of personal desires (like vacations, a car, etc.) to pay them off in 7 years. </p>

<p>Here is an example for a first year lawyer working at a big law firm with top salaries in NYC:</p>

<p>Salary: $160,000
Subtract Taxes:
-Federal - effective tax rate of approximately 32% - $51,200, which could be higher since someone making $160,000 will almost certainly fall into the dreaded Alternative Minimum Tax
-New York State - $10,563
-- 4% on the first $8,000 of taxable income
-- 4.5% on taxable income between $8,001 and $11,000
-- 5.25% on taxable income between $11,001 and $13,000
-- 5.9% on taxable income between $13,001 and $20,000
-- 6.85% on taxable income of $20,001 and above.
-New York City - $1,706 plus 3.648% - $7,543</p>

<p>Okay, so you are already down to $90,694</p>

<p>Subtract living expenses -
Rent (assuming a small, one bedroom apartment on First Avenue in the East 80's or East 90's) - $2,400/month, $28,800/year
Cell Phone - $50/month, $600/year
Time Warner Cable (basic service only) - $65/month, $780/year
Internet Access - $48/month, $576/year
Monthly MetroCard (subway access) - $76/month, $912/year
ConEd (electric and gas) - small apartment with little time spent at home is $75/month, $900/year
Food - assume $100/week (includes eating a cheap lunch from the cafeteria at work every day, and making breakfast and dinner at home -- fortunately, most nights you will eat dinner at work since you will be there until the wee hours! Savings!), $5,200/year
Sundries - Toothpaste, shampoo, soap, fabric softener, household cleaning supplies, etc. - $30/week, $1,560/year
Dry Cleaning - Ouch! $9-10/suit, men's shirt $1.50/shirt, woman's blouse $7-12/blouse - figure $30/week (on the cheap), $1,560/year
Laundry - if you do it yourself, $15/month, $180/year, if you have someone do it for you, cost increases dramatically
Cleaning - you'll hire a cleaning person because you won't have time to do it - $80/week (if you are lucky), $4,160/year
Fun - one night a week out for late dinner (working until 10 p.m. one night? got out early! enjoy!) and a movie/drinks with friends, does not include taxis, $300/month, $3,600/year
Clothing/Shoes (does not include pantyhose budget for women) - $2000/year (note - this is only a couple of new suits a year plus assorted other clothing, your first year this number will be much higher)</p>

<p>I'm not sure that my list is complete, but these costs add up to $50,828, leaving you with $39,866.</p>

<p>Subtract Student Loans: Assume my rates of $1,525/month, $18,300/year</p>

<p>Now you're down to $21,566. Can you live this frugally? If so, I would recommend maxing out your 401k (max is $15,500 in pre-tax dollars in 2007), and saving your remaining few thousand dollars for a rainy day.</p>

<p>These are all estimates for living very frugally! These estimates do not include lightbulbs, extension cords, bug spray, tips for doormen at Christmas (if you have doormen, a good idea when you're coming home alone from work at 2 a.m.), birthday presents, Christmas/Chanukah gifts for family and friends, getting out of the City on nice summer weekends (to the extent that work permits), vacations, coffee from Starbucks, late night taxis, etc. These estimates also, notably, do not include a car.</p>

<p>I am not even taking into consideration the employee's contribution to his or her health/dental/eyecare plans, any 401k contributions, any savings or any emergencies or rainy day funds.</p>

<p>Don't forget that the burnout rate at big NYC law firms (and big firms everywhere, for that matter) is very high, and you will likely take a pay cut (a substantial one, in many cases) when you leave your big law firm to go to work for the government (Attorney General's office, Asst. District Attorney), coroprations (in house) or a smaller law firm.</p>

<p>I might have been able to find scholarships or additional merit money by attending a lower ranked law school, but the advice that I had been universally given by every attorney and judge I had ever asked (and believe me, I asked a lot while I was working before going to law school) was to go to the best law school I got into, period. I applied only to T14 law schools, knowing that I would simply work another year and apply again if I didn't get into any of them. Fortunately, I got in and I had choices. Today, if I was asked for advice by someone who I really care about who is considering applying to law school, I would give them the exact same advice that was given to me. While it is certainly quite possible to become a successful (even very successful) attorney with a degree from any law school, it helps to get the jobs you want and which you choose with a degree from a T14 (even a T20) law school. Pedigree (though I, personally, don't usually believe the hype) is more important than you would expect in law, even years and years into your career. </p>

<p>So, is it all worth it? It has been for me. As I've said before, I spend time on this forum in the hope that more students going to law school will go in with their eyes open.</p>

8

<p>thanks for the very sobering account sally</p>

9

<p>That expense list is ridiculous. I wonder how much one would save if they lived in Brooklyn instead of Manhattan?</p>

10

<p>That expense list is rediculous? I have lived and worked in Manhattan for more years than I care to admit, and I can guarantee that the estimates of costs are dead on. For how long have you lived in NYC? For how long have you paid NYC, NY State and federal taxes (including the alternative minimum tax)? Where do you dry clean your suits in NYC? What effective federal tax rate are you achieving on your $160,000 salary? The reality is that taxes are taxes and student loans are student loans, no matter where you are and how much you make. How about some more one time costs for you -- brokers fee to find an apartment is 15% of annual rent in NYC, plus you will have to pay first and last months rent plus a security deposit up front. </p>

<p>If you have a different experience, please share, but don't merely discard that very real (and very frugal) cost list that I took the time to create without sharing the prices that you have actually paid to live and work in NYC on a monthly and annual basis. </p>

<p>In fact, the only cost that might differ is that if you lived in Brooklyn, for example, you might pay less in rent, depending on where you live. To live in Brooklyn Heights, for example, would cost about the same (though you tend to get a bit more for your money there). To live further out in Brooklyn, like in Carroll Gardens, might cost less, but your commute would be a heck of a lot longer, so if time is money, you may just be losing out. In addition, to the extent that you have some limited time available to actually meet your friends out, you don't want your home base to be so far from Manhattan (where you will inevitably be meeting up) that you can't make any social plans work. The budget I proposed doesn't include a car, so how were you going to get home after going out? Many taxi drivers don't like to take the B&T (bridge and tunnel) crowd home at night (usually no fare for the return trip). </p>

<p>Feel free to disregard the budget I created above (which leaves out some pretty big expense items, like health care costs, for example), but do so at your own peril. It's you who will get the big surprise in the end.</p>

11

<p>There's a longitudinal study available for free as a PDF download that gives a lot of information about the lives of young lawyers:</p>

<p><a href="http://www.abf-sociolegal.org/ajd.pdf%5B/url%5D"&gt;http://www.abf-sociolegal.org/ajd.pdf&lt;/a&gt;&lt;/p>

<p>The survey studies attorneys who graduated from law school in 2000. The first installment was published in 2004. A monograph on student debt from from the same study was published in 2007:
<a href="http://www.nalp.org/assets/645_ajddebtmonograph2007final.pdf%5B/url%5D"&gt;http://www.nalp.org/assets/645_ajddebtmonograph2007final.pdf&lt;/a&gt;&lt;/p>

<p>Total debt from student loans averaged about $70K. (16% reported no debt; one respondent had $213K in educational loans.) Median annual income four years out of law school also averaged about $70K.</p>

<p>Graduates of top-ten law schools had a median income of $135K. Graduates of schools ranked 11 through 20 had a median income of $107K. Those in schools ranked 21 through 100 had a median income of $72,787; tier three graduates had a median of $60K, and tier four graduates had a median income of of $56K.</p>

<p>This study underscores what's at stake when it comes to law school rankings. Nevertheless, I don't subscribe to the view that everyone should go to the best law school that admits them, "period." If choosing a school with a slightly higher ranking means incurring a substantially larger debt load, the slightly lower ranked school might be the better choice.</p>

<p>A few years back, someone posted on this board that his daughter was choosing between Harvard without a scholarship, and a full scholarship to Michigan. My posting that I would choose Michigan under those circumstances (a difference in $100K in student loans) excited a great deal of controversy. Many felt (with considerable justification) that the difference between a school ranked in the top three and a school ranked closer to the bottom of the top ten was enough to compensate for the greater debt load. </p>

<p>I chose Boalt over slightly higher ranked schools that were substantially more expensive, and over UCLA, which would have been a little less expensive. </p>

<p>Looking at the "After the JD" survey, I'm not sure that it makes sense to incur a lot of extra debt to attend a Tier Three school instead of a Tier Four school. </p>

<p>It will be interesting to how this plays out in later years in the longitudinal survey. My guess is that the median salaries will flatten out somewhat across the board as people leave the big law firms.</p>

12

<p>Greybeard, FWIW, I would have chosen Michigan in your scenario. Harvard is nice, but it's not $100K nice. Plus, the differences in opportunities after graduation from either school are probably negligible. In fact, having zero debt probably opens up many more opportunities because the choices are no longer limited by money issues. I think your analysis was sound.</p>

13

<p>Thanks, Greybeard.</p>

<p>I think that you made some excellent points about choosing a higher versus lower ranked law school. However, I think that attending Harvard versus Michigan or Boalt versus any other top law school is a very different question with a different answer than choosing between attending Michigan versus a third tier law school. </p>

<p>I don't subscribe to the Yale #1, Harvard #2, Stanford #3 (or whatever the current rankings are) theory of ranking law schools, where one must choose Yale over any other school since this year some magazine or newspaper ranked Yale first (and does that mean one should be upset to be attending Yale Law if next year Stanford is ranked first?). In fact, I did not attend the highest ranked law school to which I was admitted. It wasn't that hard for me to make the choice, though, since I was choosing between excellent law schools. </p>

<p>I do know that the law firms that are willing to pay a student enough to comfortably pay off their student loans tend to recruit more or less exclusively at law schools that are generally considered to be top 20 law schools (recognizing that there may be slightly more than 20 "top 20" law schools). Therefore, to the extent that someone has a choice between a top 20 law school and a lesser ranked law school that is offering that student scholarship money, I think that it may well be in that student's best interests to attend the higher ranked law school. </p>

<p>In addition, I wanted to point out that law school student debt has been growing since 2002, when the surveys for the study you cited were taken. Law school tuition has been rising by approximately 7% per year (also according to NALP) since then. As of the 2006-2007 school year at HLS, for example, costs are now $59,300 per year (of which $37,100 is attributable to tuition). A footnote to the NALP study estimates that the average cost of private tuition when the students surveyed attended school was $27,156. In addition, as far as I can tell, the amount of average debt numbers in the NALP surveys did not distinguish between students who received help from parents, spouses, etc., students who actually received grants or merit money from their law schools and students who put themselves through law school. I am curious to know what the average amount of indebtedness was for students putting themselves through law school with little help.</p>

14

<p>Sallyawp,</p>

<p>It looks like we're in complete agreement about the rankings.</p>

<p>I remember reading many years ago that law schools (particularly large ones) are profit centers for universities. That's probably doubly true today; tuition is going up faster than faculty salaries.</p>

15

<p>My law school's median professor earns $143,000 a year. Since tuition at my school is about $36,000 a year, assuming students take 4 classes a semester and each professor teaches two 50-person classes a year, each professor is "earning" $450,000 a year for the law school and only "costing" the school $143,000. </p>

<p>Obviously, there are a lot of things left out of this (financial aid to students, health care and retirement for professors, the cost of infrastructure, paying administrators and staff, etc) but it's a quick way to show that yes, law students are probably cash cows for schools.</p>

16

<p>sally,</p>

<p>I'm sorry that I was misunderstood - I was saying that the way it breaks down was ridiculous, in that having so much turns out to be not much at all, I was not critiquing your analysis, which seems spot on. And it was for that reason why I asked if one could live better by living in Brooklyn instead, which would depend on one's commute.</p>

17

<p>
[quote]
That expense list is rediculous? I have lived and worked in Manhattan for more years than I care to admit, and I can guarantee that the estimates of costs are dead on. For how long have you lived in NYC? For how long have you paid NYC, NY State and federal taxes (including the alternative minimum tax)? Where do you dry clean your suits in NYC? What effective federal tax rate are you achieving on your $160,000 salary? The reality is that taxes are taxes and student loans are student loans, no matter where you are and how much you make. How about some more one time costs for you -- brokers fee to find an apartment is 15% of annual rent in NYC, plus you will have to pay first and last months rent plus a security deposit up front.

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I think when he said "ridiculous" he meant it in a "wow thats crazy" kind of way, not the "your wrong" way lol.</p>

18

<p>Got it. Sorry for misinterpreting.</p>

19

<p>Thanks for the info Sally; you present some very important things to think about.
I'm just gonna add some tidbits I heard about, just b/c I think it's relevant and not to argue.</p>

<ul>
<li><p>Associates get a $15-20k raise every year on the base salary, right? If the bonus also increases, then an associate gets a raise of roughly the average American salary. I just didn't want people to get the impression that $160k is a poverty line, even in Manhattan. If you live with a roommate in the same neighborhood, the savings in rent+utilities alone can squeeze out 10k/year for the loan payment.</p></li>
<li><p>Perhaps patent law is a bit different? The ppl I mentioned were all in IP law. The employers who paid their tuition were not law firms but companies that offered to transition some of their scientists to in-house lawyers. In this case, they just went to the local law school and did not have to worry about recruiting. Another IP lawyer was accepted to T10 schools but went to Ohio State for the in-state tuition savings. He joined a major NYC firm upon graduation. Again, perhaps this area of law is different.</p></li>
</ul>

20

<p>
[quote]
I just didn't want people to get the impression that $160k is a poverty line, even in Manhattan.

[/quote]
</p>

<p>Yeah, I also agree that making 160k in Manhattan is a pretty darn nice deal, especially when you factor in that you're making that money at a relatively young age. There are plenty of people who spend their whole lives working in Manhattan who will NEVER make 160k. </p>

<p>"In 2006 the average weekly wage in Manhattan was $1,453"</p>

<p><a href="http://en.wikipedia.org/wiki/Manhattan#Economy%5B/url%5D"&gt;http://en.wikipedia.org/wiki/Manhattan#Economy&lt;/a&gt;&lt;/p>

<p>Now, I agree, New York firm lawyers work long hours, they have to pay back a mound of debt, they live a high-stress lifestyle. But hey, I would still argue that it's a far better life than the average Joe.</p>