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O’Melveny & Myers and Paul, Hastings, Janofsky & Walker are lifting associate salaries to match Gibson, Dunn & Crutcher, raising first-year base pay to $135,000. “We’re committed to paying top-tier compensation in all of our markets,” said Greg Nitzkowski, Paul, Hastings’ managing partner. “It’s clear that the market is moving up.” At those firms, other associate classes saw a hike of $5,000: Fourth-year salaries are now at $170,000, and seventh years’ are at $210,000. O’Melveny’s salary structure applies to all U.S.-based lawyers, while Paul, Hastings’ hike will affect lawyers in California and Washington, D.C. The move raises the pressure on other firms with large offices in Washington to match. Currently, WilmerHale and Hogan & Hartson pay first-year associates base salaries of $125,000. Another Washington giant, Dickstein Shapiro Morin & Oshinsky, has said that at least some of its associates will be getting raises, though it hasn’t yet determined which class-levels will be affected. Paul, Hastings is waiting to see what New York firms do before taking action there, Nitzkowski said. Skadden, Arps, Slate, Meagher & Flom has been paying $140,000 to first-years, including those in California, and other Wall Street firms throw in guaranteed bonuses that lift annual compensation well above the $125,000 that has been the national norm. Some California-based firms, including Morrison & Foerster, have a higher salary schedule for New York associates. Legal consultants predicted that Gibson, Dunn’s move in December would force other firms to follow suit. In September, smaller Los Angeles firms Irell & Manella, Quinn Emanuel Urquhart Oliver & Hedges and Munger, Tolles & Olson lifted salaries in a market that had been largely frozen since the dot-com days. Seth Aronson, O’Melveny’s managing partner in Los Angeles, could not be reached for comment Tuesday. In a prior interview, though, he acknowledged the firm would “strive to be competitive in the market.” Late last year, John Sherrell, the chairman of Latham & Watkins’ associates committee, said his firm is “very sensitive to being sure our associates receive top compensation.” On Tuesday, Sherrell said he had nothing new to add. Other California-based firms reacted with interest to the news Tuesday. “It’s the law of supply and demand: If the market goes up, we go up,” said Joseph Coyne Jr., a member of Sheppard, Mullin, Richter & Hampton’s executive committee. While Sheppard, Mullin will officially iron out the details within several weeks, Coyne indicated his firm would likely match. “Once three to four other Los Angeles firms do it, we have to,” Coyne said. “We will not allow ourselves to be outbid for the best legal talent.” Firms headquartered in the Bay Area are also eyeing the Los Angeles market. “This is the time of year when we watch to see what other firms do,” said Keith Wetmore, the chairman of Morrison & Foerster. “We’ve historically moved to where we perceive market to be.” Michael Charlson, the partner in charge of recruiting at Heller Ehrman, said essentially the same thing: “We’ll meet the market.” “We want the best legal talent,” Charlson added. “We know we have to pay for it.”
Kellie Schmitt is a reporter for The Recorder , an ALM publication where this article first appeared. Legal Times reporter Jason McLure contributed to this article.

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