Can anyone articulate a good reason why Big Law doesn’t really do a 401(k) match the way every other corporate job does?

like
Posting as :
works at
You are currently posting as works at

Because Cravath hasn't done it yet?

likefunny

This

like

Honestly, biglaw is way behind on benefits. When I went in house to a tech company and my whole healthcare was paid for, that was a $900/month posttax savings. Huge.

like

Also just a lot less complicated. When I got on boarded at both firms I’ve been at, they throw like 4 different health plans at you and tell you to choose. I’m on my SO’s health insurance via her tech SaaS company and they pick up 100% of her health insurance and 90% of mine.

like

Presumably they figure we get paid more than most of those corporate jobs. Something like 3% salary match (which is typical I think) is $5700 for a first year and $10,500 for a senior. We make the money in other ways (fat bonuses) etc. I have to imagine most of us can afford to max out the 401k (at least after a couple years) anyway, so the employer match isn’t super helpful like it is for a random corporate person who makes $50-100k/year and cannot afford to max out 401k by themself.

Don’t get me wrong, I’d take it. But I don’t care if I get the same money in a bonus instead when I’m already maxing out my 401k comfortably.

likesmart

Good points from all of you, I wasn’t thinking about getting beyond the personal limit. That would certainly be nice! But I also don’t think most typical corporate employees are getting 401k match at a level where they hit the $58k overall max or even get past the personal limit of $19.5k for most.

A3, agreed bonus is not guaranteed, but I was using bonus by way of example. Firms could just as easily cut salaries by $5k and give you that as a 401k match instead. I would like for them to do that, but I’m sure some associates would say they’d rather have the money now to pay off loans etc and it is paternalistic for the firm to force you to take it as retirement money rather than as regular compensation. Or maybe the argument is we should just get paid $5-10k more in overall comp. Or maybe the argument is we should get to pick how we get our comp but I don’t think any corporate places are doing this either.

There is no free money. It is all compensation for your work that you get in different ways. My point is that overall we get a much higher comp than most people. We can complain that we’re not getting more of it as a 401k match vs some other way. But think of this argument another way: “there’s a tax loophole but my employer is not helping me, a highly compensated employee, utilize the tax loophole most advantageously!! So unfair!!” Or “I make $212.5k overall comp but I should be making $213k overall comp!! So unfair!!” Or if you’re senior, “I make $480k overall comp but I should be making $490k overall comp!! So unfair!!”

It’s an argument, but it’s not very sympathetic to anyone outside biglaw associates. It’s not like the folks getting a 1-3% match from their corporation along with a much lower salary are raking it in while we suffer (monetarily, obviously our lives are full of suffering due to to the type A workaholic decisions we have made for ourselves by choosing to work in biglaw).

I really don’t say all this to discourage you. But if the associates committee decides to “unionize” and demand comp changes from the partnership (not saying that facetiously, this is basically how some markets like Philly got to NY comp after many years - only at top firms), I suspect that’s how the arguments will be received.

Big picture, associates always think they should get more of the pie, because they’re doing all the day to day, and there is no firm without them. Partners always think they should get more of the pie, because they bring in all the work, still have to supervise and train the associates on the day to day, and there is no firm without them. In reality, the firm needs both associates and partners, and whatever comp we have right now is the delicate balance we have come to. And it adjusts year by year, e.g., maybe associates did better in 2020 if their salaries weren’t cut but partners comp was, which seems to have been the case a lot of places.

like

It generally has to do with the fact that associates are highly compensated employees (HCEs) and so a match for HCEs wouldn't pass nondiscrimination testing. If your firm has separate 401k plans for partners with a match, they usually include a match for staff, too, grouping those populations together for testing purposes. But the large number of associate HCEs throws the testing off.

likehelpful

They can. They just can't have a match.

Just out of curiosity, would y’all prefer a match on your 401k or some kind of match toward your student loan payments?

likesmart

Now that is an astute consideration...

I think matching might create issues with non-discrimination testing that 401(k)s require. But don’t quote me on this; I caveat this response with the fact that I only know enough about this to know that it is a thing and that it can create issues when you have a large percentage of highly-compensated employees.

like

I’ve asked this question to leadership. They said that this was more standard 15+ years ago, but then top firms realized that law students really just focused on salary and bonus. I.e., no law student would say, “well total comp at firm X is 10k less, BUT they match 401k!”

I worked at a mid-size firm that did match! But yes their comp was significantly less and gunners were billing 2000+

Because firms all look at compare themselves to eachother and don’t need to do this if no one else is

Related Posts

Are you buying ETFs or are you putting your money in a HYSA?

like

Anyone recently bought a home in FHA loan? Can you share the rate? Looking to buy multi family unit with FHA loan.

like

Wife and I bought a house at $445k in Arizona this past summer. We’re wanting to stay in it for 5-6 years and move into one of the many new builds in the area. I’m looking down the road at $700-$1m and trying to figure out how people own these houses. The house I’m in now already seems like it costs a lot for upkeep, bills, etc. can’t imagine the next house 😂

Obviously that next house price doesn’t NEED to be that much. But definitely a want with how much house you can get for that price in AZ

like

Has anybody invested on affordable housing in Gurgaon, India? Or got any insight for a first time investor.

like

At what point do I just need to choose another career? I graduated over a year and half ago. Currently, I am struggling to pay bills. I almost went to grad school for something else. My friends are graduating making good salaries ,while I am making minimum wage. I am like 100k in debt from the choice, so any advice ?

like

With HYSA rates so low, is it worth it to invest a percentage of my emergency fund in the market?

like

Thoughts on investment app Titan?

like

Gibts es bei euch für das Jahr 2023 eine Gehaltserhöhung zwecks Inflation? Falls ja, wie hoch ist die?

Got $15k to invest. Can wait long term ~3 yrs. what coins and % do you guys suggest? I want to use just coinbase pro.

like

Hi all,
I would like to know the TDS for the below salary

Basic Wage 8,00,004
House Rent Allowance (HRA) 4,00,002
Other Allowances 3,78,402
Gross Salary 15,78,408

I do not have any loans or insurance or mutual fund yet.

Also can anyone say how to reduce the TDS in this case?

like

Hello All
Please help me to calculate inhand salary for the below break up. Tax exemption- 80C : 1.5 lakhs, Medical: 15 k, House rent- paying 17k monthly.

Post Photo
like

Folks mentioning their income here is before tax or after tax ?
Asking to find the ratio of the income and the money to invest/save.

like

Hi! I am in the interview process for a channel manager position internally with my company. Currently I am in outside sales and get a company vehicle that I use for personal use (gas, insurance and maintenance included with a small monthly fee). The new role would mean giving up the benefit. What % salary increase can I expect with the offer? I don't want to fall back financially. My rent has also increased 10%. I'd hate to think the added responsibilities would result in an income loss for me

likesmart

Best place to get life insurance? Almost 31 yo, married, 1 child.

like

I didn’t know if I should post this here or in the K bowl… but I’m super interested in the “whatever I want” portion of this transaction. Maybe she’s real??

Post Photo
funnylikeuplifting

I’m new to angel investing but am about to get involved in a deal to provide seed funding to a company I’m excited about ($250-300k). Tell me how i am going to get screwed down the mine assuming the company performs well and meets growth targets over the years.

likehelpful

I need to do a backdoor Roth IRA - A question I have is do I need to do the full $6000 contribution limit up front, or can I do a portion, convert it, and then continue to contribute throughout the year?

Also once it is converted can I contribute to that same account in future years?

Thanks!

like

Moved out of PwC recently and am rolling over my 401k and Wealth Builder accounts to Fidelity 401k. Does anyone know what type of account the PwC wealth builder is? Anyone did a similar transfer?

like

Hi, is 10k SGD per month a good salary for data scientist role with 7 years of experience in singapore. Client is a bank. How much savings can be done from an Indian perspective?

like

People worrying today should read books on trading psychology! Not being patronizing- it will help you in the future, not just for investments but for doing better in life!

like

More Posts

I have submitted my docs this Monday for a position post 3 rounds and a case study interview round.

How much time generally it takes to roll out the offer letter??

like

What is best quarter to look for a new job and also pls give the reason?
Like jan-march or oct-dec.

like

Are the US consulates in Canada open for H1b renewal stamping? If not then any news on when they will be open? We live in Seattle and previously got our visas renewed in Vancouver. It’s so easy!

like

RPA solution architect looking for job in middle east. Can anybody help me plz

Guys, need referrals for PM roles.. Please help

like

Any trades signal service/subscription recomendations?

like

Moving today from 1 apartment to another in the same community and the guys are saying the customary tip per mover is $200 each on top of the hourly rate charged. That seems very high to me considering 2 years ago when I moved with the same company their crew said about $50 each was customary tip. Are these new guys swindling me for big tips or is $200 each normal?

like

Thoughts on Fundrise iPo?

My manager asked me today which area in cyber do I want to focus my career in moving forward, and I honestly had no answer. Being 23, and only having background in python and data analytics I haven’t really thought about which area in cyber would peak my interest/would be a right fit. Guessing it would be a lot of trail and error on my part. But I wanted to see if you guys can provide some guidance into any specific areas that is interesting/good for beginners (Excluding Pentesting). Thanks!

like

I am a practice manager and I work with two older doctors who either complain about everything from notes to schedules etc. and even with the amount of time and effort I’ve put into to address those concerns I.e. setting admin time, utilizing PA’s and NP’s managing schedules within the office- even had to sit next to a doctor to make sure he’s completing his notes during 30min admin time- they still manage to complain! It’s driving me insane. What should I do?

like

Mega Backdoor Roth IRA question/After-Tax contributions

Crosspost from a thread in the KPMG bowl discussing Mega Backdoor Roth IRA/After-Tax contributions. I wanted to ask a quick question for a “mistake” I may have made.

I forgot to change my contributions from after-tax to Roth + Traditional. A few paychecks went through as after-tax and hasn’t touched my $20,500 contribution limit for the year yet.

How will those funds be used/taxed? What are the implications here.

like
like

I have a job interview at White & Case, Los Angeles. Any suggestions or advice to prepare for the job interview and land the job? It’s on a contract basis, any insight about how likely is that they will offer a permanente position after the contract? I’d appreciate any info!

like

I have an interview with 3M for SAP profile. YoE 7+. Can anybody help how has their experience been?

like

Hi Guys,

SAP ABAP Developer here. Can anyone guide me for SAP ABAP ON HANA Certification Process, Fees, attempts, Dumps? This would be really helpful.

like

Happy Friday ladies and gentlemen! Cheers 🥃

Post Photo
like

If Russia nukes the US, which cities would be the targets?

like

Reviews on Moxy NYC and W New York?

Asking for a friend. Are there any openings for Team Lead - Server support or customer support.

like

Additional Posts in Big Law

In this upcoming market (now-3 years), what practice area(a) will get busier and what will lose steam?

like

Do firms typically give a standard raise to cover inflation? And then additional raises based on performance, etc.? If they inflation raises, what would that be this year?

What are average billable hours for L&E attorneys? TIA!

like

What’s the best way to give your two weeks notice?

like

How are recruiters paid?

Does the attorney have to stay for X months for them to get paid? Or is their pay secured? Reason I ask is because I lateraled using a recruiter recently (more than half a year, less than a full year ago), but am not content with the new firm and I'm wondering if they have a conflicting incentive for me to stay or if there's no such conflict with reaching out to them and saying this new firm isn't the right fit.

likehelpful

Stupid question but is there a bowl for big law partners or just old of counsel like me?

like

I have a job interview at White & Case, Los Angeles. Any suggestions or advice to prepare for the job interview and land the job? It’s on a contract basis, any insight about how likely is that they will offer a permanente position after the contract? I’d appreciate any info!

like

I went from trying to be a rock star associate to just doing the bare minimum to not get fired. What does it take to get fired in big law? Besides extreme outlier situations like sexual harassment/mistreatment of staff/insubordination, etc.

likehelpful

Does anybody know what is disclosed in a third party background check as it relates to employment?

like

How to deal with not being staffed on deals and seeing others in your year be staffed? When asking partners directly for work, they refer you to the staffing partners. When asking staffing partners (repeatedly), they say “thanks for interest, we will have something soon.” Weeks and weeks pass by and you’re always below where you should be for billable hours (at this point, very far below). All reviews are essentially perfect and no negative feedback. Extremely frustrating and discouraging.

like

Anyone know how flexible Winston & Strawn is with WFH? Eying Dallas specifically. Thanks!

like

Do any law firms use an email distribution list manager or Outlook plug-in of some sort to import and keep track of working group circulation email addresses on large deals? Any suggestions welcome!

like
<