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Lowenstein Hikes First-Year Pay to $140,000 in 2008Lowenstein Sandler broke from the pack of New Jersey's home-grown firms Thursday and announced it would pay first-year associates $140,000 next year, a $15,000 increase. The hike will catapult the 250-lawyer firm beyond Flaster Greenberg, whose $130,000 first-year pay is highest among local New Jersey firms. Lowenstein Sandler's announcement could exert pressure for pay raises at the other New Jersey firms that are pegged at the $125,000 level: Sills Cummis Epstein & Gross, Gibbons and McCarter & English.
New Jersey Law Journal2007-06-15 12:00:00 AM
Lowenstein Sandler broke from the pack of New Jersey's home-grown firms Thursday and announced it would pay first-year associates $140,000 next year, a $15,000 increase.
The 250-lawyer Roseland, N.J., firm also said salaries for some first-year associates in its New York office might be even higher, depending on practice area and performance.
The hike will catapult Lowenstein Sandler beyond Flaster Greenberg in Cherry Hill, N.J., whose $130,000 first-year pay is highest among home-grown New Jersey firms and was instituted this year to boost competition with Philadelphia operations. [See chart.]
Lowenstein Sandler's announcement could exert pressure for pay raises at the other New Jersey firms that are pegged at the $125,000 level: Sills Cummis Epstein & Gross, Gibbons and McCarter & English, all in Newark, N.J.
Raymond Thek, the partner who chairs the recruiting committee at Lowenstein Sandler, says competition for the best starting lawyers prompted the raise, which will kick in Jan. 1 for the 25 associates who start in September.
"The type of clients we work for demand a level of service and quality of talent that requires us to go out and recruit the very best people and we hope to maintain our ability to do that," Thek says.
Since the mid-1980s, when New Jersey firms began worrying about falling too far behind New York in first-year pay, Lowenstein Sandler has usually been the highest-paying local firm, often starting the raise a few months after a class comes in. "At the risk of being arrogant, we think we have always been the market leader and we continue to think of ourselves as the market leader," Thek says.
As for whether other New Jersey firms will follow suit, he says, "It's not particularly interesting to us what the other firms do. We need to decide what level of talent we need to grab in the marketplace, and this is what we think we need to do to grab it."
Lowenstein Sandler's class of 2007 will have graduates from law schools at Boston University, Cornell, University of Pennsylvania, Rutgers, Seton Hall, William & Mary, New York University and George Washington, Thek says. Half the class had judicial clerkships.
The current highest first-year salaries in New Jersey are $145,000 at Latham & Watkins in Newark and Drinker Biddle in Florham Park, N.J., outposts of national firms that pay their newly hired New Jersey associates the same as first years in New York and Philadelphia.
In January, Simpson Thacher & Bartlett in New York announced a hike to $160,000.
Gibbons managing partner Patrick Dunican Jr. says his firm has also been thinking about a pay raise for first-year associates.
Technically, although the firm lists a $125,000 first-year salary, none of the first-year associates will earn that this year because they all are coming from judicial clerkships, which qualifies them for a $130,000 salary.
Lowenstein Sandler does not give extra pay to former judicial clerks or bestow signing bonuses, like the $2,500 bonus that will bring starting pay to $112,000 at Cole, Schotz, Meisel, Forman & Leonard in Hackensack, N.J., and $5,000 that makes the pay $110,000 at Connell Foley in Roseland.
Like some firms, though, Lowenstein Sandler does have bonus pay for associates who bring in business, do particularly good work or do lots of it.
As for Lowenstein Sandler's 35-lawyer New York office, higher pay will be available in "practice areas where New York billing rates are applicable and competition for talent is such that New York scale is relevant," Thek says.
He declines to say how high the pay rates would go. "To the extent that we have practices that generate rates in New York that are commensurate with what the big New York firms are charging, we will be paying associates from first year right up to the senior levels what New York firms pay," he says.