Lathams Big Law Salary Scale Splurge

Ben Thompson, LawFuel’s big law and List review editor

When we published the ‘Profits per Partner’ list last year in our big law salary survey report, Latham & Watkins were topping the list at $7.3 million – and the firm is intent on ensuring it remains top dog in the partner salary stakes.

Lathams have been steadily increasing their proportion of profits that are reserved for partner payouts to avoid lateral moves from talented (and profitable) partners and keep those Latham rainmakers in place.

Reports indicate that the firm has increased the bonus pool for partners to 15 percent, intent on maintaining a highly incentivized performance from its partners. Apparently, big money does the trick. Who knew?

Latham’s growth has been the exception, ranking at No. 2 in the Am Law 100 with revenues of over $5.3 billion in 2022.

But what is more exceptional is that the firm has lifted its partner profits pool and the number of partners eligible to share in the booty.

Law Partner Profits Pool

American Lawyer has estimated that the profits pool will see top partners at Lathams earning from $12 million to $15 million.

That’s great news for the partners in the pool, but for those who don’t make poolside, it could also create some tensions.

The growth in Latham’s income in the years up to 2022 and the use of strategic bonuses has lead to a disparity in remuneration for partners. It may have benefits for the pool-sharing partners, but apart from the issues for those who do not share the aggressive law firm pay scale formula could still lead to changes in compensation structures for other big law firms.

Unlike firms that have shifted to share point systems, Latham has opted for a gradual reallocation of profits to prioritize partner bonuses. These enhanced bonuses serve as a competitive means of compensating partners at what they perceive to be their fair market value, deterring rival firms from poaching talent.

New York-based recruiter Mike Parrillo noted, “The broader partnership is investing in competitively compensating the firm’s top performers,” suggesting that Latham’s approach has proven effective in retaining talent and maintaining its competitive edge.