Shed a tear for the bankers. After years of being the alpha moneymakers in finance, they are being eclipsed by top lawyers who are pulling in annual salaries of $3 million or more. This is according to a recent Wall Street Journal report that dove deep into compensation trends for the legal and banking professions.
The key finding is that, while elite lawyers' salaries have tripled in recent years, the pay trajectory for bankers—who also work punishing hours—has been very different: "The average managing director at a top-20 investment bank not leading a group made $1.9 million a year over the past three years...compared with $1.9 million in 2007. And that is without accounting for inflation. Lower-level bankers are making even less on average than they were precrisis."
In looking at reasons for why lawyers have pulled ahead, the Journal points to an uptick in private equity work, broader remits for attorneys on Wall Street, and the growing embrace of eat-what-you-kill compensation structures at top law firms. Whatever the explanation, the upshot is that top partners are now billing north of $2,000 an hour and, according to one real estate agent, are edging out investment bankers when it comes to buying swanky homes overlooking Central Park.
All of this has implications for the world of crypto since the industry's fate is tied more than ever to trends in finance and, especially, to crafting a legal strategy that will let it survive in the U.S. It's a sign of the times that some of the most high profile crypto figures right now are lawyers like Coinbase's Paul Grewal and Ripple's Stu Alderoty. In the last year, their policy battles with the U.S. government have elevated them to the crypto A-list, which is typically reserved for blockchain founders. They are also making gobs of money for their trouble, of course, as are the dozens of attorneys feasting on the carcass of bankrupt FTX—whose bills have already topped $200 million.
There is some irony in all this. The original mission of Bitcoin and other early crypto projects, you may recall, was to democratize finance and construct a new financial system that did not rely on intermediaries. Nowhere in his white paper did Satoshi discuss lawyers who bill $2,000 an hour. Yet here we are.
The growing presence of high-priced lawyers amid the crypto scene doesn't mean that the original dream of crypto is dead. Anyone from any social station can still interact with Bitcoin, Ethereum, and other blockchains on their own terms. But as Wall Street expands its push into crypto, it's looking more and more like the lawyers and bankers are here to stay.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
