Have you ever heard the saying that comparison is the thief of joy? I think there’s a lot of wisdom in that statement. Many of the ways we compare ourselves with others is unhealthy and counter-productive. Within the legal profession, we proliferate some of our own special brand of oftentimes meaningless and sometimes harmful comparisons.
That being said, not all comparisons are bad. There are ways to learn from comparing yourself to others, both from the standpoint of a legal professional and from the standpoint of personal finances. Let’s take a look at some of the good and bad.
Comparing Yourself to Other Lawyers
We lawyers love comparing ourselves with other lawyers. I do it, and I see and hear my lawyer friends and colleagues do it all the time too. I even did a blog post comparing attorney salaries in an earlier blog post.
Unfortunately, a lot of the comparisons we do are either meaningless or unhealthy.
Prestige
One of the most pervasive comparisons that many lawyers engage in is the focus on pedigree, starting from what law school one attended. Rightly or wrongly, the ranking of one’s law school can be a major factor in how graduating law students get sorted into coveted legal jobs each year. There is no denying the real impact of law school ranking and its associated prestige in obtaining your first job. Yet, using the prestige of a law school as a proxy for quality is highly imperfect and in many ways flawed.
I have worked with attorneys who graduated from top-ranked law schools, and many have been very impressive while some have been very bad. I have also worked with attorneys who graduated from low-ranked law schools, and many have been very impressive while some have been very bad. In my experience, there’s a very imperfect correlation between where one went to law school ranking and one’s grit, willingness to work hard and desire to do what it takes to become a great lawyer and advocate for clients.
Among experienced lawyers, where one attended law school tends to recede into the category of lawyer small talk, but it can still matter and matter a lot – I’ve seen law school alma mater come into play in hiring decisions involving very seasoned attorneys. What does seem to either replace or supplement the law school pedigree discussion is a new hierarchy involving the perceived prestige of one’s law firms, governmental agency, company, etc.
So, why do we lawyers do this prestige thing? I think one major practical reason is that it’s a by-product of the difficulty in measuring a lawyer’s output. For the most part, we deliver intangible services, the quality and efficacy of which cannot be counted easily. We can do a great job, and the client can still lose the case. A client may have no idea whether we did a good job or not.
So, pedigree becomes a proxy for both quality and success. It’s easier and more visible for a lawyer to stand behind, and for clients to see, the name of a school, law firm, company, etc. Working at a more profitable law firm, a more prestigious governmental agency, a Fortune 500 company or pre-IPO unicorn becomes a marker for professional success.
I’m So Busy!
Another comparison that many lawyers seem to always be engaging in is the one over how busy they are. Anyone who has ever worked in a law firm is intimately aware of the the obsession over hours – after all, it’s the currency of your worth. You learn early on who the big billers are.
I got a taste of this early in my career when I went to lunch with two senior lawyers who proceeded to engage in the lawyer’s version of whose duck is bigger. The first casually mentioned that he was perpetually so busy that he only slept 5 or 6 hours a night. The second lawyer one-upped him and said that he only needed 4 hours of sleep a night.
Somehow, poor sleep practices that are really detrimental to health, productivity and public safety become a badge of value, dedication and success (and insecurity for those not keeping up).
The obsession over busyness isn’t confined to the law firm. In-house lawyers and government lawyers do it too. Everyone is either slammed, buried, drowning or drinking from a fire hose.
I think the reason we do this is simple. Either we really are that busy and want others to know, or we’re insecure and don’t want to be perceived as being less of a lawyer, less of a contributor, than the lawyer in the office next door.
Of course, what always seems to get omitted from the chatter is whether the busy-bee is being productive and efficient in his work. Every other industry, from technology to automobiles to financial services to medicine, seems to be focused on efficiency and productivity to drive growth and profitability, yet the law seems to be stuck on hours, hours and more hours.
Comparing Compensation
Now, let’s talk about money and personal finances.
Many years ago when I was an associate at the law firm, I was sitting in a partner’s office waiting for a call to begin when the partner was looking at his computer and saw that the firm had just released data to the partnership about each partner’s draw for the upcoming year. Based on prior year’s unit values, the (chatty and very candid) partner calculated that his partner down the hall doing the same type of work would be making about $75K more than him. As he told me this, his face turned red in anger. I ended up handling the call with the client.
At the time, the partner’s reaction was befuddling to me – after all, these were lawyers making well over $1 million at the time. How many luxury sedans did this guy need (and he had many!). But, in retrospect, I totally get it. Everyone wants to feel like they are being compensated fairly. Even, monkeys! (side note: I highly recommend reading Frans de Waal’s Chimpanzee Politics).
Do Your Diligence About Your Compensation
In order to get a firm grasp of your personal finances and understand where you can make improvements, you need to know where your money is coming from. Compensation from your work as an attorney is going to be the primary way of generating income and potential saving and source for investing for most attorneys.
That’s why it’s important for lawyers of all types and levels to take stock of their incomes and make an assessment of whether they are being paid fairly. For some (certain government attorneys on a published pay scale, law firm partners and associates), this information is relatively transparent and available. For others (in-house lawyers, lawyers at small firms), this may be more of a black box that requires some digging. For lawyers who are solo practitioners or partners in their own small firms, it’s an opportunity to do a market check to make sure that you’re not unnecessarily billing your time and services at rates lower than what your skills demand in the market.
Knowing how your compensation stacks up relative to similarly situated peers is a good exercise in financial awareness, particularly when pay may not be tied directly to merit, or more insidiously, if there are systematic issues such as gender pay imbalances.
Are you one of the lawyers making less than the average lawyer salary in your state? Maybe you didn’t negotiate your first in-house compensation package well and now have a salary that trails your peers – are there now opportunities to seek raises that reflect your contributions to the company?
Becoming aware of the market for your skills can help you assess your options, which could include requesting a pay increase, changing employers and/or looking for alternative ways to generate more income.
Career Development
A second place where comparing yourself to other lawyers can be helpful is in assessing how successful lawyers, lawyers who you look up to or have reached a career point that you aspire to, achieved their success. Maybe you’ll find that you need to develop a particular expertise, gain a type of experience or build relationships with certain constituencies.
Seeing what makes others successful can provide data on how you can improve your own career. The more you can improve your skills and grow your network, the greater the opportunity to exploit your abilities and generate greater income.
Spending
Where the money comparison game can become unhealthy and/or harmful to one’s personal finances is when it’s driven by ego. I fear that for some lawyers, chasing money because they want to be seen as more successful or better than others is ultimately a loser’s game. There will never be enough, and someone will always have more. After all, none of us will ever be Putin-rich.
It can be particularly damaging to your personal finances if you are spending because you want to “fit in” with or impress your peers and neighbors. Keeping up with the Jones is a real phenomenon, and it doesn’t just happen to lawyers. It can be hard to be the one driving the Honda when all of your colleagues are driving Mercedes, BMW and Teslas. You work just as hard as them, so don’t you deserve the nice things too? Spending is a visual thing, and you see, and others can see too, when you have the beater in the parking lot or the smallest house on the block. The social pressure to fit in and not stand out is real – we all learned that in high school.
But, keep in mind that spending is not how you become wealthy, and spending does not equal wealth. Just because other lawyers, neighbors, friends and family are spending a lot of money doesn’t mean they are wealthy. The fact that others are purchasing expensive things has no bearing on anything other than that person’s ability to spend money.
Someone might be driving a $100K luxury car, but you don’t know if he had to finance his purchase or whether the purchase represented 2%, 10% or 50% of his net worth. In all likelihood, the car was probably leased, as most luxury cars are these days.
Now, imagine if every person had to walk around with their net worth displayed on their backs, sort of the like how each Chinese citizen is allotted a score through the Social Credit System. Keeping up with the Jones would take on a whole new meaning.
Instead of conspicuous consumption being a way to signify success, spending on expensive depreciating assets could start to have a negative social status impact for the spender. I know I’d be embarrassed to be driving around in a $100K car if at the same time I’m displaying a negative net worth on my back.
But, the point isn’t that people should be shamed into certain spending behaviors, whether it’s spending to keep up with others or spending less as in my dystopian net worth-on-display world.
Personal finance is by definition personal – each person has their own goals, and to help achieve those goals, we should strive to use comparisons in ways that will help us. And, we should do our best to tune out the ones that don’t matter or that will hurt us.
