First-year associates at larger midsized firms—head counts between 251 and 500—saw a 6.7% increase in their salaries, while associates at 700-plus attorney firms saw hikes of 16.1%, according to a study by the National Association for Law Placement (NALP).
While the raises signal that larger firms, even some that would be considered midsized, couldn’t resist the urge to try to match the round of associate pay raises put in motion by Milbank in 2018, plenty of firms did not.
Few firms, in fact, have hit the $190,000 benchmark, according to the report. Although $190,000 is the most frequently occurring salary in Big Law, accounting for 29.3% of reported first-year associate salaries, smaller shops and firms with head counts between 501 and 700 didn’t budge and reported flat associate salary growth in 2018.
“As with other associate base pay hikes in the past, while the press focus is usually on how quickly law firms race to meet a market change like this one, the data reveal that there are in fact many large law firm offices that are still not paying $190,000 as a base first-year salary,” NALP executive director James Leipold said in a statement.
The 2019 Associate Salary Survey included more than 300 firms, and 70% of the respondents employed more than 251 attorneys. The median first-year associate salary for law firms in 2018 was $180,000; firms between 251 and 700 reported a median salary of $160,000; those with between 51 and 250 reported a median salary of $115,000; and firms with under 50 attorneys reported salaries of $98,750.
Additionally, there were differences among markets. Most of the $190,000 salaries came from large metropolitan areas such as Dallas, Los Angeles, New York City and Washington, D.C. Firms often cite lower billing rates and cost of living as reasons for regional pay differences.
Both Citi Private Bank and Thomson Reuters issued reports earlier this month indicating that law firms that have attempted to keep up may soon face consequences. While 2018 was the strongest year for law firms since the recession, a drop in Q1 demand may exacerbate the expenses incurred from the raises and put firms in a bind, they said.
“Associate compensation—that doesn’t go away,” Citi analyst David Altuna told The American Lawyer last week. “We do think that it’s going to challenge profit growth.”