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Three years as a big-firm lawyer, and it's a pretty sure bet that the annual paycheck is going to be at least $200,000. Not bad, even if Sallie Mae is still claiming a big chunk of it.
Using information provided by third-, fourth-, and fifth-years, we've compiled the salaries and bonuses of Am Law 200 associates from around the country. Overall, midlevel associates reported median salaries of $170,000 in their third year, with bonuses at $30,000. By years four and five, total compensation hit $222,000 and $245,000, respectively.
Not surprisingly, associates in New York are making more than anyone else. At the top of the heap: the lucky few at Wachtell, Lipton, Rosen & Katz. The corporate powerhouse pays its third-years an above-market base rate of $190,000, but the real boost comes at bonus time. Wachtell third-years were paid a median bonus of $165,000 last year -- or more than midlevels in some markets make in base pay and bonus combined.
Among the other standouts: Kirkland & Ellis, which appears to be paying top-notch bonuses in several markets (fifth-years in New York are among the few midlevels who crack the $300,000 barrier in total compensation); and Chadbourne & Parke, which gives its third-years a $50,000 bonus in D.C. and New York -- roughly $10,000 above the going rate.
We collected salary and bonus information as part of our annual associate satisfaction survey and calculated median salaries and bonuses for third-, fourth-, and fifth-year associates in several major markets. We break down, where possible, median salaries and bonuses for Am Law 200 offices in those markets. For the firm-by-firm reports, we've printed only calculations based on responses from at least five associates in each office.
The numbers show that firms are investing terrific sums in their associates. But how much pain is it really causing partners to pay associates so well? What is the proportion of associate salary to per-partner profits? As we show in "The Pain Index" associate pay is an expensive item, but it's not hurting partners quite so much at firms like Cravath, Swaine & Moore. There, the average profits per partner figure ($3.015 million) is 13.4 times the total compensation ($225,000) of a third-year associate in New York. A few blocks away, however, in the New York office of Fitzpatrick, Cella, Harper & Scinto, partners average just 3.55 times more than their third-years. Profits per partner there are $745,000, and the median third-year associate compensation is $210,000. Ouch.
Not that a firm in New York has much of a choice. The $200,000-plus payday is now de rigueur in the Big Apple, as our firm-by-firm breakdown shows. New York associates at Am Law 200 firms are virtually guaranteed a $185,000 base salary and a $40,000 bonus in their third year. (Fitzpatrick Cella, in fact, is actually a little under the market, with a $185,000 base and a $25,000 bonus.)
Of course, in New York, a city where a 400-square-foot studio can sell for a half-million bucks, it's hard to argue that associates are actually getting a better deal than their counterparts in other parts of the country. Using a simple cost-of-living calculation, the median pay for a third-year in Manhattan -- $210,000 -- goes about as far as $99,000 does in Atlanta. The actual median pay for an Atlanta third-year is $153,500. Advantage: Atlanta -- at least so far as purchasing power goes.
No matter where associates live, their money isn't necessary being used for bespoke suits and Birkin bags. As we reported in our August issue ["Stuck in the Middle"], associates, even in their midlevel years, grapple with large student loans. Eighty-one percent of midlevels are still paying for school, and 60 percent of them owe $50,000 or more.
It's hard not to justify a serious paycheck for a job that requires so much upfront investment. And firms are under pressure to keep up with each other. Within individual markets, firms are generally in lockstep on base salaries. Bonuses, too, change little from firm to firm, our data shows.
However, firms are rarely paying a standard rate across all of their offices. One exception: Skadden, Arps, Slate, Meagher & Flom. Associates in New York, Washington, D.C., Los Angeles, Chicago and San Francisco all reported the same income in their third and fourth years and only slight differences in the fifth. Far more typical is DLA Piper, where salaries and bonuses for third-years ranged from $162,000 in Philadelphia to $199,000 in Washington to $209,250 in San Francisco.
Uneven, perhaps, but strong paydays nonetheless. In fact, most Am Law 200 midlevels are in the top 5 percent of the nation in terms of household income, according to U.S. Census figures. Associates at Wachtell, with their $350,000-plus paydays, have climbed into the top 1.5 percent. That's not yet hedge fund manager territory, but it's more than enough to cover the loans and the Manhattan rent, with a few bucks left over for a bank-busting trip to the deli counter at Balducci's.
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