"Pay to play" strategies have hit big law firms, where star attorneys can earn up to 10 times what other partners are paid, the Wall Street Journal reports.  Can you spell "rainmaker?"  

Washington litigator Jamie Wareham, 50, will make about $5 million with DLA Piper - significantly more than what he earned at Paul, Hastings, where he reportedly was one of the highest-paid partners.  Mr. Wareham, who's represented UBS and Chevron, said he looks forward to helping "advance DLA's global platform."

Meanwhile, top rainmaker partners in NY, LA, DC and Chi, can earn $10 million or more a year, compared with $640,000 for the average partner at a U.S. firm, said legal recruiter Jeffrey Lowe.  And these pay packages are being offered by a global corporate-law industry that's still recovering from a prolonged downturn. 

    Bulging Pay Gaps.   Differences in pay between the top and the bottom is becoming huge, with traditional notions of pay equity falling by the wayside.  Geography plays a part in the equation, with lawyers in larger cities receiving higher pay that's based on cost-of-living and probably a city's roster of potential corporate clients. 

Law firms are facing increased competition from Wall Street's high-paying banks and hedge funds, who are going after law firm partners.  For instance, James Woolery, formerly with Cravath, a firm known for its merger practice, recently moved to JPMorgan Chase & Co. as co-head of mergers and acquisitions.  Yet, like their Wall Street competition, law firms are eager to hire and retain proven business generators, whatever their cost, particularly at a time when many companies are reducing spending on outside lawyers.  Faced with declining revenues, firms want big-name lawyers who perform mission-critical work and whose billing rates are more resistant to economic downturns.

"It's not without economic justification, but it comes with a cost in terms of ego and morale."

A majority of big law firms have begun reducing the compensation level of 10% to 30% of their partners each year - partly to free up money to award top producers.  Widening pay spreads also are a response to the way companies assign work. Clients generally care more about which lawyer, and not which firm, will be handling their affairs - which drives up the value of star lawyers who command loyal client followings.  But the divergence hurts a firm's partnership ethos, creating a sense among some partners that being a lawyer is "less of a profession and more about making the most money you possibly can," said Jeffrey Pariser, a former Hogan partner.

    DLA Piper, Kirklan & Ellis, K&L Gates, Skadden Arps, Cravath.   DLA Piper, which has 3,500 lawyers and ranks as one of the world's largest firms, has widened its compensation spread in recent years to attract top talent.  It's top partners were paid about $6 million, or 9 times what other partners were paid. DLA Chairman Frank Burch acknowledges that growing pay gaps can lead to tension, but said, "If you pretend that doesn't exist you have your head in the sand." 

Kirkland & Ellis LLP, a bankruptcy and private-equity firm, has wide pay spreads  - its top partners last year earned over $8mn, or eight times the pay of other partners.  At K&L Gates LLP, a 2,000-lawyer firm, top partners earn up to nine times as much as other partners.

Skadden, Arps, Slate, Meagher & Flom LLP, based in New York, which has lost top partners in recent years to rivals including Kirkland, last year widened its compensation spread last year to 5-to-1, from 4-to-1 two years ago.  "We decided it was more appropriate to recognize top performance." 

However, some elite firms - e.g., Simpson Thacher & Bartlett LLP, and Cravath, Swaine & Moore LLP, still hew to narrower compensation bands, ranging from 3-to-1 to 4-to-1, typically paying the most to those with the longest service, according to lawyers with knowledge of the firms' finances.   [WSJournal, 2/8]