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The past few weeks have been good ones if you’re an associate at a big Los Angeles-based firm. Last week, O’Melveny & Myers and Paul, Hastings, Janofsky & Walker, following the lead of Gibson, Dunn & Crutcher, raised base salaries for first-years from $125,000 to $135,000 per year. As the raises will apply to the firms’ Washington offices (combined the three firms have nearly 350 lawyers in the District), they’re certain to increase pressure on other D.C. firms to move above the $125,000 mark, as well. Latham & Watkins hadn’t yet announced raises as of late last week, but it seems likely to follow suit. And non-California firms are also taking note. “It certainly creates a certain amount of pressure to move in that direction,” says Carter Phillips, the managing partner of Chicago-based Sidley, Austin, Brown & Wood’s 223-lawyer Washington office. “As a practical matter, we’ve begun to take an increase into the budget.” As for the largest D.C.-based firms, they seem to be subscribing to Tony Blair’s maxim that “The art of leadership is saying no, not yes,” — at least when it comes to new associates. WilmerHale, Hogan & Hartson, and Arnold & Porter have held the line at $125,000 for first-years even while boosting pay for senior associates. How much longer they’ll be able to hang tough is an open question. Both Patton Boggs and McKee Nelson report they pay new lawyers $130,000. Dickstein Shapiro Morin & Oshinsky has planned associate raises for this year but hasn’t decided which classes will be getting them. Strong revenue at firms and a shortage of top-tier young talent are fueling the market. “[Law firms] are coming off their richest year ever,” says Matthew Schwartz, a legal recruiter with Mestel & Co. “There are not enough superstar candidates to go around.” Firms are also facing stepped-up competition from corporate legal departments and federal agencies like the Securities and Exchange Commission, says Schwartz. But if associates still feel they are being underpaid, they at least have better financial prospects than Supreme Court nominee Judge Samuel Alito Jr. If confirmed, Alito will make just $203,000, slightly less than the going rate for a seventh-year associate.
Jason McLure can be contacted at [email protected].

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