Earlier today, in response to the article “The Big Pay Squeeze,” we received an email from Eric Bernthal, managing partner of Latham & Watkins, who provided a little more insight into the world of compressed salaries. If any other managing partners would like to offer up similar tales, please feel free.
Here’s the email:
“I read your article this morning with interest, Nate. I particularly like you featuring my old friend, Mr. [Marc] Fleischaker, who says that the associate-partner pay compression ‘doesn't bother us’ at Arent Fox. But he didn't tell you the real reason why: it happened to him as a new partner at Arent Fox back in the 1970s.
“Marc and I started together as young associates at Arent Fox. (The years are fuzzy, but I think he joined in 1971. I arrived in 1972. I made partner in 1977, and he made it in 1978. I'd like to get you to believe that I was just smarter and more precocious, but the truth is that I clerked for two years after law school, so we both were just promoted with our respective law school classes.) If memory serves, we made about $45,000 each as senior associates back then. In contrast, first-year partners made about $40,000. We fretted about all the same things that are covered in your article, some 30 years later, such as paying for our health insurance and buying our equity, and still making less money as partners. Somehow, we survived then, much as young Arent Fox partners will survive and prosper today.
“Marc went on to have an illustrious career at Arent Fox, and he has probably now run the place for as long as Earl Kintner did, when Marc was just a kid. But his real claim to fame has nothing to do with Arent Fox: rather, it is that he played high school basketball in Louisville, Kentucky, with the legendary Wes Unseld. (I can also assure you, however, that, even in those horrific, dry years of 1978-2000, when the Bullets couldn't beat a good high school team, there was never any thought of reuniting Marc with Wes to improve the team's chances.)
“Anyway, our experience proves that if pay compression is anything at all, it's not a new phenomenon.”