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The brief lull in salary increases ended yesterday as two firms said they are bumping up first-year associate salaries. Cherry-Hill, N.J.-based Flaster Greenberg is raising its starting pay from $120,000 to $130,000. “Our firm has doubled in size in the past five years to nearly 70 attorneys,” Managing Shareholder Peter R. Spirgel said in a statement. “As we continue to expand, offering starting salaries that are competitive in the legal market will enhance our recruitment of the top graduates from the nation’s best law schools.” The increase applies to each of the firm’s offices, which are located in Philadelphia; Vineland, Morristown, Egg Harbor Township and Cherry Hill, N.J.; and Wilmington. The $10,000 bump will be given at all associate levels, Spirgel said in an interview, and will be effective in September with the incoming class. Ballard Spahr Andrews & Ingersoll plans to increase its first-year associate salary July 1, moving from $125,000 to $135,000. Chairman Arthur Makadon said the firm would give the $10,000 increase to all associate levels with no compression. Along with a salary increase, Ballard Spahr made some adjustments to its bonus system. Makadon said the firm traditionally had a merit-based bonus system. That has now been expanded to include an hour-based bonus system that is available regardless of whether an attorney meets the merit bonus requirements, he said. Spirgel said he is “begrudgingly” increasing the starting salaries, even though he thinks law firms are overpaying entry-level attorneys. He said this increase puts the firm in the pack with Philadelphia firms and ahead of many New Jersey firms. Spirgel said he would have had to bump up salaries even if the firm didn’t have a Philadelphia office because the South Jersey and Philadelphia markets are so close in proximity. “We’re very concerned that we don’t compromise the only thing we sell,” he said, referring to the firm’s talent pool. Spirgel said there are only two ways firms pay for these increases: through their partners’ pockets or through higher rates. “The legal profession has been able to pass on salary increases to clients,” he said. “That can’t continue indefinitely.” That puts pressure on partners and associates to work more hours, but there is a limit to that as well, Spirgel said. Because first-year attorneys are getting overpaid, Spirgel said the compression in other levels is unjustly tight. The market is overpaying for first-years, he said, “especially since, unlike a football team, they don’t come with any contracts.” Flaster Greenberg follows several other Philadelphia-area firms that have increased starting salaries. Drinker Biddle & Reath moved up its timeline for salary increases, effectively creating two salary hikes in one year. The firm originally planned to pay its first-years $135,000, effective Sept. 1, 2007, but made the increase effective March 1 for the Philadelphia, New Jersey, Chicago and Wilmington offices. First-year associates in the New York, California and Washington, D.C., offices earn $145,000. The Philadelphia, New Jersey, Chicago and Wilmington offices will move up to $145,000, effective Sept. 1. Wolf Block Schorr & Solis Cohen moved its Philadelphia salary to $135,000 and its New York starting salary to $145,000. Duane Morris, Blank Rome and DLA Piper have each raised associate salaries in Philadelphia to $135,000 retroactive to Jan. 1. Morgan Lewis & Bockius and Dechert increased Philadelphia starting salaries to $145,000. Dechert went up to $160,000 in New York. Not all firms want to take up arms in the salary wars. Cozen O’Connor has said this year that it has no present intention of increasing starting salaries from $125,000. “We think our starting-level salaries are exactly where they should be,” Cozen O’Connor Chairman Stephen A. Cozen said previously. “We also think, to a certain extent, [raising salaries] is a disservice to our clients.” Cozen said firms are “kidding themselves” if they think salary increases aren’t having a negative effect on clients. When a base salary changes, he said, all other levels of compensation change and that, in turn, has to cause rates to increase.

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