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Author Topic: Do you hate law?  (Read 10692 times)

Burning Sands

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Re: Do you hate law?
« Reply #10 on: July 11, 2005, 10:56:38 AM »
LOL.  I'm laughing with you.

I'm interning with In-House Counsel this summer at a financial firm, and these are the happiest lawyers you will ever meet.  This firm requires 4 years of law firm experience before it will hire you, so all of them have come from the big NYC law firms.  You can tell they enjoy this lifestyle better than the firm lifestyle. 

I've talked with a few of them about the law firm days, and they all say the same things that we've heard already...come in at 7am, leave at midnight every night, bill 2400 hrs and still get passed over for partner after 8 years as an associate, etc.  This guy said he woke up one morning and realized that his newborns had become teenagers.

I haven't met very few law students who are on that law firm partner mission.  I think most law students I've talked to, if they want to work for a law firm AT ALL, want to work there for a few years while we pay off our loans and gain experience in the practice before we break off and do our own thing. I think most of us have our eyes wide open when it comes to this firm lifestyle and what it entails.  There are far easier ways to make a 6 figure salary. 

And even if you do make $150,000 at a firm, you've just made the firm $1,500,000.
Burning Sands

MidWestLawGril

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Re: Do you hate law?
« Reply #11 on: July 13, 2005, 12:06:51 PM »
Hey, I really enjoy law school.  It's so much better than working because you are working for yourself.  I like most of my professors and I really enjoy the challenge.... seriously.

I plan to work in big law for 3-4 years then switch to in-house stuff.  I am going in with my eyes open, knowing that biglaw probably going to suck.  However, I've worked 55 hours a week for $30,000.  I think I can work 55-65 for $125,000 plus bonuses!  hello. Then maybe after a few years I can open my own firm because I'll have money saved up from working in BigLaw.

When I first wanted to go to law school, everyone is so discouraging.  But just because they don't like the law or they don't have the balls to find a better law job, doesn't mean you can't get a law job that you like.

Burning Sands

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Re: Do you hate law?
« Reply #12 on: July 13, 2005, 01:44:14 PM »

I plan to work in big law for 3-4 years then switch to in-house stuff.  I am going in with my eyes open, knowing that biglaw probably going to suck.  However, I've worked 55 hours a week for $30,000.  I think I can work 55-65 for $125,000 plus bonuses!  hello. Then maybe after a few years I can open my own firm because I'll have money saved up from working in BigLaw.


It must be the mid-west connection b/c I said the exact same thing when I decided to finally go to law school. I used to work at an engineering firm making not much more than what you just said, and I used to average 55 hr/wk, so I figured a few more hours for 3 times the salary...not bad mathematically speaking.

But there is ONE LITTLE THING that is overlooked with that statement...good ol' Uncle Sam, and his annoying kid brother, FICA.  When you're in the 29 - 70k tax bracket, things don't look "so" bad.  You still get taxed, and you complain about it, but its doable.  When you move over that 70k mark, you get straight up raped on taxes.  After federal & state taxes (especially in New York) and your other deductions you can turn $125,000 a year into $65,000 real quick.  Oh and by the way, bonuses are taxed at 45% (because they haven't taken enough from you already).

Now, if you're like me, 65 grand a year in take home is not bad, and you won't hear me complaining, but its not exactly the lottery either.

Burning Sands

MidWestLawGril

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Re: Do you hate law?
« Reply #13 on: July 13, 2005, 01:56:45 PM »
Ok, maybe I am missing something.

125k puts me in the 28% tax bracket.  Plus 3% for Illinois state income tax = 31%

so 69% of 125k is about $7100 per month....
As opposed to the $1800 or so per month that I used to make with $30k per year.  That's a hell of a difference and it still sounds pretty good to me.

Noelle

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Re: Do you hate law?
« Reply #14 on: July 13, 2005, 03:43:58 PM »
Quote
After federal & state taxes (especially in New York) and your other deductions you can turn $125,000 a year into $65,000 real quick.

sands, is it not that something is not right here?

Burning Sands

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Re: Do you hate law?
« Reply #15 on: July 13, 2005, 05:16:07 PM »
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After federal & state taxes (especially in New York) and your other deductions you can turn $125,000 a year into $65,000 real quick.

sands, is it not that something is not right here?

If you mean do I think it's not right as in "the system" then yes. I think its messed up.  Why the government needs that much of your money I will never understand.  And how you can take six figures and turn it upside down into almost 1/2 of its original value is another magic trick that I'd like to congratulate Uncle Sam on accomplishing.

Ok, maybe I am missing something.

125k puts me in the 28% tax bracket. Plus 3% for Illinois state income tax = 31%

so 69% of 125k is about $7100 per month....
As opposed to the $1800 or so per month that I used to make with $30k per year. That's a hell of a difference and it still sounds pretty good to me.

Widwest, please allow me to correct the slight miscalculation of a fellow law student.

You are correct about the 28% tax bracket, but incorrect in the full application of the 28% tax bracket.

Let's assume that we're all geniuses and also assume that we get very lucky and we all end up at Cravath as a 1st year associate in the heart of Big Law Capital (aka - New York City). 

We all start at $125,000 a year.

(so far so good)

Oh but then comes in Uncle Sam.  (not good) and Sam says congrats kid, you're now in the 28% tax bracket, which means give me $14,325 OFF TOP...PLUS 28% of everything you make above $70,350. 

Everything we make above 70,350 is 125,000-70,350 = 54,650.  28% of 54,650 = $15,302. 

Now when you add our $15,302 to what we originally had to give off top according to the tax bracket we're in ($14,325) we get $15,302 + $14,325 = $29,627.  Let's just call it 30k.

So now, already, the Feds have hit us up for 30k off the top. That takes our $125,000 to $125,000-$30,000 = $95,000.  AND WE HAVEN'T EVEN GOT TO STATE TAXES YET.

So, not to be outdone, here comes Mr. State of NY and he says, oh good job kid, I see you're a new corporate lawyer making $125,000 of taxable income, why don't you give me $6,532 off top PLUS 8.54% of anything you make over $100k.  Add all that mess up, that equals another $8,667, let's just call it 9k.

So take our $95,000 and take away another 9k and we have $86,000 as take home....

...Oh but wait, this is all assuming you have $0.00 in a 401k, mutual funds, IRA's, health care deductions, dental plan, optical plan, and other benefits.  The average person throws in 10% to a 401k ($12,500), which would take $125,000 down to $112,500.  Assume all the other deductions round us out to an even 105k, and then we have to do the whole Fed Tax & State Tax thing all over again.  All of that mumbo jumbo brings our take home salary to somewhere around $74,000 a year.

Now you see how we can go from $125,000 a year down to $74,000 a year.

However, on a positive note, this is all TAKEHOME.  So you divide $74,000 by 12 months, and you're looking to take home over $6,000 a month.  That's 6 G's in your pocket each month.

I don't know about you, but that still sounds pretty good to me considering my take home before coming to law school was about 1/3 of that.
Burning Sands

MidWestLawGril

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Re: Do you hate law?
« Reply #16 on: July 13, 2005, 05:37:23 PM »
"I don't know about you, but that still sounds pretty good to me considering my take home before coming to law school was about 1/3 of that. "

I'll take it!  My take home pay before law school was $2,000 per month, and I had to pay $750 in rent. (cheaper than NY, I know) But that doesn't leave anything for extras.

Also, Illinois tax is 1/3 of NY tax.  It's a flat rate of 3%.

Furthermore,,, remember that 401k and savings is still YOUR money.  You'll get it back one day, with interest.   ;D

Burning Sands

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Re: Do you hate law?
« Reply #17 on: July 13, 2005, 10:34:55 PM »
Yeah, if you don't have an ENRON 401k company backing you, you'll be alright.

They did a study recently on channel 5 (NYC) that said in order for you to live well in Manhattan, you would need to CLEAR $500,000 a year after taxes.  But that's NYC for you.  It costs too much to live out here.  People out here don't believe it when I tell them what I used to pay for rent back in the Midwest.
Burning Sands

quinten

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Re: Do you hate law?
« Reply #18 on: July 14, 2005, 12:37:19 PM »
Quote
After federal & state taxes (especially in New York) and your other deductions you can turn $125,000 a year into $65,000 real quick.

sands, is it not that something is not right here?

If you mean do I think it's not right as in "the system" then yes. I think its messed up.  Why the government needs that much of your money I will never understand.  And how you can take six figures and turn it upside down into almost 1/2 of its original value is another magic trick that I'd like to congratulate Uncle Sam on accomplishing.

Ok, maybe I am missing something.

125k puts me in the 28% tax bracket. Plus 3% for Illinois state income tax = 31%

so 69% of 125k is about $7100 per month....
As opposed to the $1800 or so per month that I used to make with $30k per year. That's a hell of a difference and it still sounds pretty good to me.

Widwest, please allow me to correct the slight miscalculation of a fellow law student.

You are correct about the 28% tax bracket, but incorrect in the full application of the 28% tax bracket.

Let's assume that we're all geniuses and also assume that we get very lucky and we all end up at Cravath as a 1st year associate in the heart of Big Law Capital (aka - New York City). 

We all start at $125,000 a year.

(so far so good)

Oh but then comes in Uncle Sam.  (not good) and Sam says congrats kid, you're now in the 28% tax bracket, which means give me $14,325 OFF TOP...PLUS 28% of everything you make above $70,350. 

Everything we make above 70,350 is 125,000-70,350 = 54,650.  28% of 54,650 = $15,302. 

Now when you add our $15,302 to what we originally had to give off top according to the tax bracket we're in ($14,325) we get $15,302 + $14,325 = $29,627.  Let's just call it 30k.

So now, already, the Feds have hit us up for 30k off the top. That takes our $125,000 to $125,000-$30,000 = $95,000.  AND WE HAVEN'T EVEN GOT TO STATE TAXES YET.

So, not to be outdone, here comes Mr. State of NY and he says, oh good job kid, I see you're a new corporate lawyer making $125,000 of taxable income, why don't you give me $6,532 off top PLUS 8.54% of anything you make over $100k.  Add all that mess up, that equals another $8,667, let's just call it 9k.

So take our $95,000 and take away another 9k and we have $86,000 as take home....

...Oh but wait, this is all assuming you have $0.00 in a 401k, mutual funds, IRA's, health care deductions, dental plan, optical plan, and other benefits.  The average person throws in 10% to a 401k ($12,500), which would take $125,000 down to $112,500.  Assume all the other deductions round us out to an even 105k, and then we have to do the whole Fed Tax & State Tax thing all over again.  All of that mumbo jumbo brings our take home salary to somewhere around $74,000 a year.

Now you see how we can go from $125,000 a year down to $74,000 a year.

However, on a positive note, this is all TAKEHOME.  So you divide $74,000 by 12 months, and you're looking to take home over $6,000 a month.  That's 6 G's in your pocket each month.

I don't know about you, but that still sounds pretty good to me considering my take home before coming to law school was about 1/3 of that.

This doesn't seem quite right to me. The whole point of 401k, mutual funds, IRA's, health care deductions, dental plan, optical plan, and other benefits is that many of them are "tax shelters" -- meaning that they take your pre-tax income and shove it into an account or other expense that can't be taxed. It is even possible to have other expenses related to work -- like transportation costs -- be paid for from your pre-tax income. People with really huge salaries have more tricks up their sleeves -- they have some of their income, especially bonuses, deferred so that it doesn't hit their taxes right away.

Someone correct me if I'm wrong (I'm no accountant), but I think that the way this example of what happens to your salary was calculated isn't in keeping with reality.

MidWestLawGril

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Re: Do you hate law?
« Reply #19 on: July 14, 2005, 01:36:22 PM »
I think you're right quinten.

I have to say that even if $74,000 is a correct number, I am pretty psyched to get that much money!  In 3 years, I could pay off my school loans (public school) and buy a house. Sounds pretty awesome to me!