Why Gregory M. Owens decided it was a good idea to open his life to the pages of the New York Times isn’t clear. That he did, however, offers one of the few feel-good stories for solo practitioners in a long time. The practice of law has been in the toilet for a long time now, and for many solos and smalls, images of life in the marble and mahogany hallways of Biglaw are the stuff of jealous nightmares.
Meet Gregory Owens.
The silver-haired, distinguished-looking Mr. Owens would seem the embodiment of a successful Wall Street lawyer. A graduate of Denison University and Vanderbilt Law School, Mr. Owens moved to New York City and was named a partner at the then old-line law firm of Dewey, Ballantine, Bushby, Palmer & Wood, and after a merger, at Dewey & LeBoeuf.
Today, Mr. Owens, 55, is a partner at an even more eminent global law firm, White & Case. A partnership there or any of the major firms collectively known as “Big Law” was long regarded as the brass ring of the profession, a virtual guarantee of lifelong prosperity and job security.
But on New Year’s Eve, Mr. Owens filed for personal bankruptcy.
There is nothing like a good bankruptcy to force the doors of personal privacy ajar. And in we go:
According to his petition, he had $400 in his checking account and $400 in savings. He lives in a rental apartment at 151st Street and Broadway. He owns clothing he estimated was worth $900 and his only jewelry is a Concord watch, which he described as “broken.”
All of a sudden, your Small Law life isn’t looking nearly as stinky as it did a moment ago. It’s not that he isn’t getting a Biglaw paycheck. Oh, yes. He most assuredly is.
When Mr. Owens first became a partner at Dewey, Ballantine, he made about $250,000, in line with other new partners. At Dewey & LeBoeuf, his income peaked at over $500,000 during the flush years before the financial crisis. In 2012, he made $351,000, and last year, while at White & Case, he made $356,500. He listed his current monthly income as $31,500, or $375,000 a year. And he has just over $1 million in retirement accounts that are protected from creditors in bankruptcy.
Bear in mind, that’s income, not revenue where he has to pay the rent or for the copy machine toner. So where did all that money go?
How far does $375,000 a year go in New York City? Strip out estimated income taxes ($7,500 a month), domestic support ($10,517), insurance ($2,311), a mandatory contribution to his retirement plan ($5,900), and routine expenses for rent ($2,460 a month) transportation ($550) and food ($650) and Mr. Owens estimated that he was running a small monthly deficit of $52, according to his bankruptcy petition.
It’s not cheap to live like a Biglaw partner, you know, though it may be better to be the ex-wife of one, provided they actually pay the support.
What this really shows is how the growth of Biglaw, the glory days of making partner and billing a corporate client for lunch at Le Cirque with six of your favorite associates because you merely thought of them, are gone. They should have never been there, but Biglaw was greedy, and the attitude that peers could do anything and still be showered with wealth was fed by corporate accounts payable clerks who signed off on anything.
Owens became a “de-equitized” “service” partner. In real world terms, a grunt who was too old to be called associate.
After Dewey & LeBoeuf collapsed, Mr. Owens seemingly landed on his feet as a partner at White & Case. But he was a full equity partner at Dewey, Ballantine and Dewey & LeBoeuf. At White & Case, he was demoted to nonequity or “service” partner — a practice now so widespread it has a name, “de-equitization.”
Nonequity partners like Mr. Owens are not really partners, but employees, since they do not share the risks and rewards of the firm’s practice. Service partners typically have no clients they can claim as their own and depend on rainmakers to feed them.
Think of it as a solo without clients, a guy who may have a shingle hanging in front of his office, but a silent telephone. There is only one difference, which is the $375,000 he gets paid per year anyway. Wipe away those tears, solos.
While it may be fun to muse that Gregory Owens’ politics are of the sort that has him harrumphing about the riff-raff who can’t live within their means, this would be entirely speculative and unfair. He bought into a system that promised him security. He did what he was supposed to do, kept his nose clean, didn’t piss off his rainmaker rabbi, and should have been able to enjoy a secure and comfortable lifestyle until the day he died, and then have enough to leave a pleasingly large estate. That was the deal he made with the devil.
So we have to work for a living. We have to hustle up the clientele we want, work hard enough and smart enough to sustain not only a viable practice but one sufficient to feed our children and sock a little away before junior puts us on that ice floe out into the ocean. We have to be quick, frugal and smart. We have to serve our clients well. If we don’t, we won’t have any.
While there is an element of Schadenfreude whenever the mighty fall, such feelings are small and diminish us. According to the Times, Owens was a solid lawyer. He just had no clients, which meant that he didn’t bring in enough money to cover his cost. It doesn’t make him a bad guy.
But we’re not bad guys either. We may not enjoy the prestige of being Biglaw, but then, we didn’t have to file for bankruptcy either. They are Masters of the Universe. We are masters of our own
domain fate. And that’s pretty good too.
Biglaw is collapsing upon itself as the price of its greed and myopia, every day sounding more and more like a somewhat larger version of solo and small firm practice. In a sense, Biglaw is comprised of a thousand solos, each vying for hegemony within a world of self-proclaimed overachievers. That means they suffer the same indignities that we do, plus the internal political turmoil we don’t. They may get a paycheck, where we only enjoy profit, but they seem to have as hard a time keeping it as we do getting it. All in all, it strikes me as an even trade.
Don’t envy the guys in Biglaw. They may secretly envy you.