<p>This thread has covered a lot of ground, but there are a couple of misperceptions I’d like to comment on. First, the “average” income of $640K/yr for all law firm partners is fictitious. The study doesn’t say that, and the study isn’t rigorous. </p>
<p>The mean income of the partners of the firms which responded to the survey was reportedly $640K. But (1) the respondents were skewed to big-cities (72% from 12 cities; 43% from just NY, Chicago and DC) (2) The 6.2% of lawyers who responded to the survey probably skews high, and (3) The reported average - i.e., the mean, is inflated by a handful of high-earners.</p>
<p>The median income for a partner in Seattle was $275K. That means that half of the partners at firms in that city - the few that made it through the winnowing out process and “made it” - took home less than $275K. Philly, Chicago and Atlanta, $375K - or about what an average radiologist makes. You can be assured that the smaller the city, the lower the median partner pay. As a general matter, lawyer’s incomes are typically wildly overestimated. </p>
<p>Next, regarding high pay for the tiny fraction of first year associates at BigLaw firms. Your analysis and analogies are all wrong. The correct analogy is to bonuses given to baseball players drafted out of high school and college. Not the pay of the guys in the majors - that’s a different issue - I’m talking about the money thrown at the kids before they get to spend years playing minor league ball in small towns, at the end of which some of them will make it to the big leagues, which has nothing to do with unions.</p>
<p>First round draft picks get a signing bonus of $1M to $8M. Hundreds of players are drafted each year and handed a six-figure signing bonus. [2011</a> Signing Bonuses Round 1-10](<a href=“http://www.angelfire.com/vt/prospectwatch/index201111.html]2011”>http://www.angelfire.com/vt/prospectwatch/index201111.html) Are they worth it that year? Hell, no. Not one of them. They’re all going to be playing ball that year in single-A at ballparks with $1 beer night and a mascot race as the big attraction. The parent club isn’t going to see a return on that signing bonus for years, if ever. (And the answer usually is “never.”) Only a select few will make it through the meatgrinder to play in the big leagues. To maximize the chances that they’ll get one of the “winners” major league teams pay them big money to sign (minor league salaries are modest, per the union agreement; the only variable is the signing bonus, which is unregulated.) The only leverage the players have is a willingness to hold out - to go play in another country, continue in school if they still have options (most “prospects” sign after their Junior year in college, because they lose leverage once they graduate.)</p>
<p>That’s your market comparison. That’s why BigLaw pays more to first years than they’re “worth” in terms of their product that year - they’re “prospects.” Their pay is a signing bonus based on the expectation that some of them will become stars, and the understanding that most won’t. It is rational. You just don’t understand it because you’re analyzing it from the wrong perspective.</p>