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With the legal market humming and most big firms posting record profits last year, associates have to be wondering when the gusher of fees will trickle down into their bank accounts. The $125,000 standard base salary for first-years at top firms in the biggest markets hasn’t budged since the peak of the dot-com boom more than five years ago. A report issued last week by the National Association for Law Placement called entry-level salaries “remarkably stable.” But there is at least some evidence that pressure is building in the market for midlevel and senior-level associate pay increases. Howrey; Arnold & Porter; and Skadden, Arps, Slate, Meagher & Flom all have announced raises for their upper-level D.C. associates this summer. Two Boston-based firms, Goodwin Procter and Mintz Levin Cohn Ferris Glovsky and Popeo, also gave raises to senior associates earlier this year. One cause for the pay increases: Firms cut back on recruiting during the economic downturn, leading to a supply shortage. “The past few years law firms were hiring smaller entry-level classes, and so midlevel classes are smaller,” says the managing partner of one D.C. firm, who asked not to named. The recent moves have heightened the salary disparity among big firms. At market-leader Skadden, fourth-year associates in Washington make $185,000, at Howrey they make $165,000, and at Steptoe & Johnson the figure is $145,000. How long firms further down the food chain can hold off giving raises is an open question. Skadden has paid first-years $140,000 since 2000. But other big firms held the line at $125,000, using flexible bonuses to make up the difference. Still, in the past year firms in Philadelphia and Minneapolis raised starting salaries for first-years, closing the gap with big-market firms. Partners, consultants, and recruiters interviewed for this article say it’s likely that this year or next some large New York or California firms will opt to match Skadden’s first-year salary. One firm that’s hinted at a pay raise is Heller Ehrman. “We’re looking at our compensation system from the ground up,” says firm managing partner Robert Hubbell. “This year we heard fairly consistent feedback that associates wanted us to look at compensation.” You can bet that kind of “feedback” is being heard all over town.
Jason McLure can be contacted at [email protected]

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