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How to Become a BigLaw Millionaire Before You’re Up For Partner

It’s easier than you think

Step 1: Understand and appreciate your good fortune


Remember when you were a first-year associate making a salary of $190,000 base + $15,000 bonus (or $160,000 base + $10,000 bonus back in the day, in our case) and feeling like you’d just won the lottery? What an absurd amount of money! If you are like us, then you were probably pinching yourself, wondering when you’d wake up. Not long before you’d hit the jackpot, you were just a lowly law student with three roommates, the lobby of your apartment building had a distinct garlic odor, and you thought that leftover, room-temperature pizza was a legitimate meal. Fast forward just a few months, and now you’ve started your BigLaw job, you’re well-settled into a luxury high-rise with access to concierge services, a landscaped rooftop sun terrace and a state-of-the-art fitness center, casually commenting on the brininess of your first-course oysters before the arrival of the piece de resistance: blackened snapper topped with culinary sea foam alongside seared shishito peppers. It all happened overnight and this was now your new normal. You’d made it! 

We certainly thought we had, and having not one but two first-year BigLaw salaries made the deal even sweeter. That first year, we enjoyed almost daily fine-dining meals, hired a house-cleaning and laundry service, made numerous purchases of luxury goods and vacationed in Iceland, Scotland, Portugal, Nantucket, the Bahamas, Newport and Bermuda, among other places. Mrs. A|E went on weekend trips to Zurich and Paris to see family and friends. On top of all of this, that first year we started aggressively paying down our almost $250,000 in law school and credit card debt.

One evening, we lit up a couple of oak barrel-aged Cuban cigars while indulging in another tropical getaway, taking in the magenta sunset with our toes buried in the sand and the ocean breeze gently salting our faces. Life could simply not get any better, we thought. This was more money than we would ever need or know what to do with, we gloated. Until it wasn’t. 

Step 2: Beware of lifestyle inflation

In BigLaw, just as you’re thinking you have it all, you become a second-year associate, which comes with an automatic pay raise. And then another. And another. Before you know it, your already-astronomical first-year income has more than doubled by the time you’re a senior associate. The danger in all this is that, often without even noticing, you expand your spending with each corresponding pay raise—a concept known as ‘lifestyle inflation.’ And for some time in our early associate days, we did just that, compiling quite the collection of luxury goods and experiences. After all, one does need a different Prada bag for each day of the week, Mrs. A|E reckoned. According to Investopedia, ‘lifestyle inflation tends to become greater every time an individual gets a raise and can make it difficult to get out of debt, save for retirement or meet other big-picture financial goals. [It] is what causes people to get stuck in a cycle of living paycheck to paycheck where they have just enough money to pay the bills every month.’ 

Little did we know—even with our six-figure salaries—we were not on a path to wealth, but to poverty.

If you think that poverty doesn’t exist in BigLaw, or that BigLaw attorneys can’t possibly be living paycheck to paycheck, think again. Lifestyle inflation runs rampant in our industry. The typical BigLaw associate trajectory involves a series of automatic pay raises, which take you from total pay of $205,000 in year 1 to $440,000 in year 8 (recent coronavirus-driven pay cuts at some firms may affect individual numbers). When you’re burned out, juggling high-stakes matters around the clock and constantly buried under a mountain of paperwork, you have very little time to reflect on how your spending patterns are changing and how an ever-increasing number of luxury and convenience items keep getting re-labeled as ‘necessities.’ Sometimes, even if you do reflect, you may swiftly conclude (as you’re getting ready to pull yet another all-nighter) that you work hard, so you deserve it. Numerous studies have shown that job dissatisfaction and burnout lead people to spend more money in the hopes that material goods will enhance their happiness. Spoiler alert: they don’t. Sad spending is just that—sad—and you can do better.

Lifestyle creep is dangerous in any setting, but in the BigLaw context it is especially treacherous. If you’re lifestyle inflating in BigLaw, then not only are you overspending, but you’re also acclimating yourself to expensive habits that now require you to maintain a massive salary and a high-stress job. You may think that your mega salary equates to lots of options, but if you’re spending as much (or, god forbid, more) than what you make, then you have actually locked yourself in. Maybe you previously had ambitions outside of BigLaw? Or maybe you once thought about the possibility of exploring other, less lucrative employment opportunities? Well, you can forget about that. Not in the cards for you. Is extreme burnout pushing you out the door? Too bad. The door is closed. You’ve got the golden handcuffs on and you’re not going anywhere.

Even if you have no plans to leave, lifestyle inflation at BigLaw salary levels is the free-spending equivalent of running with scissors: you’re an accident waiting to happen. If you were to lose your job in a recession—or, as more commonly happens, suddenly reverse course and decide that you can’t take it anymore—then having to adjust to a lower salary could easily throw you into an irreversible financial and mental tailspin. A middle-class worker who gets laid off or decides to quit may eventually be able to find another job that pays as much, or close to as much, as he or she made before, but how are you going to replace your $300,000 salary? It will be tough. At BigLaw income levels, spending up to or above your means isn’t just unnecessary: it’s irresponsible.

Step 3: Cap your spending

Thankfully, early enough in our associate years, we paused and took stock of our finances and values, coming to the conclusion that we were unwittingly, yet steadily, increasing our spending as our take-home pay grew. Like many, we valued travel and experiences more than consumer goods, but we were already maxing out our vacation days and still had plenty of income left over, so without much thinking, we had ended up allocating that extra income towards luxury goods and services. When we took the time to deeply introspect, we realized that none of this extravagance was adding any real value to our lives or making us any happier. We remembered how we felt as first years, sitting on that tropical beach with our slow-burning Cuban cigars, thinking that we had reached what back then felt like the pinnacle of good living. 

So, we made the life-changing decision to cap our spending at our first-year salary level regardless of what pay raises may come along in the future. If as first-year associates we had more than enough money to pay off our student loan debt, travel the world and afford everything we could possibly want, then we had to come to terms with the hard truth that mindless lifestyle creep was eating at our happiness and wealth, and therefore had to end. As we progressed through the associate ranks, we saved and invested every dollar we made above our first-year pay. After we paid off our student loans, we also allocated to savings the amount that was previously going towards debt repayment, eventually allowing us to live on less than a single first-year salary, which we continue to do today.

Step 4: This is where the magic happens

The math behind capping your spending at your first-year pay (or even less, if you’re up for it!)—and how a simple decision like this can lead to extraordinary growth in wealth—is nothing short of astounding. Consider the table below, which sets forth the BigLaw associate compensation scale as of summer 2020 (coronavirus depending). The last column shows the annual increase in pay from first-year associate all the way up to senior associate. If you cap your spending at $205,000 through your associate career and invest the rest, the amount of gross pay you will have set aside adds up to a staggering $1,000,000!

Granted, this is a pre-tax $1 million, but if you invest the money in low-cost index funds, it will grow, meaning you may very well reach a seven-figure net worth while you’re still an associate. And don’t forget that this $1 million is over and above the additional $1.64 million that you will have earned over the course of 8 years, at least some of which will have been allocated towards debt repayment, 401(k) contributions or other supplemental means to grow your net worth.

If the BigLaw bubble is clouding your judgment and you’re thinking that a first-year associate salary can’t possibly be enough to live on, consider that $205,000 per year, even if you’re the sole earner in your family, puts you in the top 10% to 25% of household incomes in the six major BigLaw markets (New York City, Washington D.C., Chicago, Los Angeles, Boston and San Francisco), and chances are, your significant other (if you have one) is probably contributing to your household finances too. Less than a single first-year salary has proven to be more than enough for us to live a great and deeply fulfilling life of travel and adventures in the outdoors. Point being, it’s a lot of money. If you stay in BigLaw for more than a few years, in most instances, it should be enough to pay off your student loans, live your best life and grow your net worth. And if you’re lucky enough to have two horses in the race like us, or if you choose to live on even less than your first-year pay, then you could be looking at an even more substantial nest egg towards the end of your associate career. 

Step 5: It’s never too late

There are many reasons why you should strive to build a formidable net worth while you’re still an associate—ranging from reduced stress and increased opportunities, to early retirement from the traditional workforce in your 30s or 40s—and we’ll talk about those in subsequent posts. One reason worth emphasizing right away, however, is that in the age of coronavirus financial preparedness is not just prudent, it’s imperative. The fact that some law firms have recently instituted 10-20% salary reductions proves the folly of spending to the brink. No one knows what the longer-term BigLaw pay scale and bonus structure will look like in the aftermath of the pandemic, making it all the more important to spend well below your take-home pay, putting aside a significant percentage that will allow you to weather financial turmoil and unforeseen macroeconomic events. In our case, our savings and investment portfolio gave us the confidence to proceed with our cross-country relocation from Boston to Jackson Hole even in the face of severe uncertainty caused by the coronavirus.

Even though we’ve been on this path to financial independence for years and have radically transformed our lives along the way, sometimes we look back and wish we would’ve started even sooner. But starting, whenever you can, is better than not starting at all. In some ways, we’re even thankful to have experienced lifestyle creep, as that caused us to reset our values and get our priorities in check. We also acknowledge that our two BigLaw incomes and lack of significant financial obligations (including no children) have allowed us to supercharge our savings to uncommon levels, even in the BigLaw context. Everyone’s family and financial situation is different, but you should not be discouraged. Taking any steps towards financial introspection will dramatically improve your life regardless of your circumstances. Luckily, you’re in BigLaw, so you’ve already hit the jackpot; now you just need to take control. 

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