Income and intelligence: profits per partner shouldn’t cause in-house insecurity

Underpaid in-house lawyers who retain highly-paid partners marvel at whopping figures of profits per partner (See my posts of March 6, 2006 on international comparisons; and Aug. 26, 2006 about “Law firms make too much.”). Aside from income envy, many people attribute high intelligence to those with high earnings. That’s not so smart.

Consider research from Ohio State University as summarized in Bus. Week, May 7, 2007 at 79. The study analyzed data on 7,403 Americans who took part in a Bureau of Labor Statistics study begun almost 30 years ago. The BLS has collected data on income, net wealth and IQ. “While those with the highest IQ scores tended to earn more than others, they seemed just as likely to wind up in dire financial straits and no more likely to acquire great wealth.” Apparently brainier people do generally have higher incomes, but they don’t save as much of what they earn. One speculation is that the unusually clever are more likely to take financial risks. Thus, income does not necessarily indicate intelligence.