Some law firm graduates will soon earn $190,000 in their first full-time job, thanks to Milbank, Tweed, Hadley & McCloy's decision to raise first-year associate pay this week. Although the salary boost may not sweep the industry, several other firms have said they intend to follow suit.

The last wave of law firm associate salary increases was just a couple of years ago, when Cravath, Swaine & Moore boosted pay to $180,000 and many other firms including Milbank followed suit.

So far so good. But as with many things in life, there's a catch: Milbank and other law firms trimmed their pension plans and compensation packages for retirees several years ago, in an effort to gain more control over firm finances.

As The American Lawyer reported in 2016, Milbank's partners, who used to be eligible to receive 25 percent of the average of their highest compensated years for life, eventually will be eligible for only 18 percent. Total annual exposure for the firm would be capped at 10 percent of earnings, down from 15 percent. Partners also will need 25 years to vest, up from 20 years. Similar lengthening of vesting periods and reduction of compensation caps were reported at other law firms. (Milbank declined to comment Wednesday on its retirement plan.)

As big firms continue to boost pay for their youngest lawyers, the result has been a rebalancing of compensation at many firms. Increasingly, attorneys can expect higher pay at the front end of a Big Law career, but they may face more uncertainty toward the middle and the end.

Retirement probably seems like a distant Neverland to someone celebrating his or her first job at a large law firm. But there's more to consider.

At the same time salaries are rising, the path to partnership, especially equity partnership, has become longer, more difficult and more uncertain over the years, with some exceptions. And the chances of making partner at the highest pay levels are diminishing as the richest handful of firms pull away from the rest of the pack. Most associates are unlikely to win the equivalent of the Big Law lottery's grand prize: a secure perch as a partner making multiple millions per year. 

Then, there are the inevitable economic downturns.

In the last recession, nonequity partners, staff lawyers and associates were among the first to be pink-slipped. Equity partners whose productivity declined also were shown the door, and many partners' saw their compensation fall. Cost-cutting continued even after the worst was over. Relentless pressure on partners and associates to earn their big paychecks by increasing billable hours continues, especially with ongoing client demands on firms to reduce costs. Once cut, the chances of getting back on track into another partnership or partner-track position haven't been good.

The bottom line: A career in Big Law is looking more like a career in pro sports, with the prospect of high earnings at the start, but also the possibility of peaking fairly early, and the endgame increasingly unpredictable. Yours could be the major league career with huge lifetime earnings and a lucrative retirement. But there's also a chance of being sent back to the minors, displaced by a lateral star, or cut from the league. That's not to mention disability, a possibility for everyone. Or even being replaced one day by a robot.

So given all that, what's the prudent course for a newly minted lawyer to take?

Jeffrey Lowe of the legal recruiting and consulting firm Major, Lindsey & Africa in Washington, D.C., said associates should keep long-term goals in mind, and they should discuss where to start their careers with someone who has experience. 

Lowe acknowledged the natural temptation to go for the biggest paycheck—especially for those with tens of thousands of dollars in student debt. But he urged reflection.

“It is not uncommon for young people to focus only on the starting salary rather than what their opportunity for advancement might be in the long run,” Lowe said. But ask yourself, “is this the firm or the practice you are interested in?”

Greg Sullivan, CEO of Sullivan, Bruyette, Speros & Blayney, a wealth management firm, said it pays to be deliberative about what to do with those big checks. Sullivan, who advises lawyers whose annual earnings range from about $600,000 to $7 million in the Washington, D.C., area, advises young associates to take the following steps:

• Pay off student loans and credit cards before making any big commitments. About 32 percent of your $190,000 salary is going to go to federal taxes anyway if you're single.
• Take a good look at your firm's retirement plans and start contributing to your 401(k) to  take advantage of any matching funds. Err on the side of being less conservative in investments because of your longtime horizon of 25 or 30 years. 
• Establish an emergency savings fund to cover three to six months of expenses.
• Start a “freedom fund” of additional savings to help fund your capital contribution should you make partner in seven or eight years. (The contribution could be the equivalent of one to two-and-a-half years of your first-year associates salary.) Or, save to fund a career change or other lifestyle choice.
• Get adequate insurance for the unexpected, including disability and umbrella liability insurance. ”Once they find out you are an attorney at a law firm, people think there is a lot of money, so it's better to have [liability] protection in place” said Sullivan.
• Think carefully about buying a home. “If you are looking at buying into real estate you must think really long-term. Transaction costs and maintenance costs are much higher than people estimate.”

As Lowe summed it up: “Try to keep everything in perspective. It's great you are making a lot of money, but it might not last forever, or even for several years. We are one recession away from law firms drastically cutting head count. And law firms have had a history of increasing salaries at precisely the wrong time.”