Divorce proceeding sheds light on BigLaw pay

June 3, 2014 A divorce proceeding in the Massachusetts Appeals Court has a rare peek into the secretive subject of how much partners are paid at large law firms

The ruling in Hoort v. Hoort reversed a contempt judgment against a Ropes & Gray partner who was accused of not paying his wife what she was owed under court orders. The husband had been required to pay the wife one third of his after-tax income for a two year period during the divorce proceedings.

In order to untangle the matter of how much Hoort was paid and how those payments were structured, the judgment provided the following helpful and illuminating summary:

The husband’s approximate annual compensation in 2008 was $970,000. [FN1] The husband’s annual compensation includes the following types of draws or distributions: (1) a $10,000 monthly draw; (2) three “tax draws” in the amount of approximately $110,000 paid in April, June, and September; and (3) a year-end distribution that is received in January of the following year. [FN2] The husband’s year-end distributions for 2008 and 2009 — the two years pertinent to the dispute–were $245,023 and $249,934 respectively.

These numbers don’t add up to $970,000 — ($10,000 x 12) + ($110,000 x 3) + $250,000 = $700,000 — but footnote 2 says that Hoort also got "'incentive draws’, which may be paid at any time and are not guaranteed.” Another footnote points out that “the 2008 compensation level was generally typical of the surrounding years.

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