Miami Firms Boost Pay for New Lawyers

Despite the tough economy, Greenberg Traurig and Carlton Fields are ramping up pay for associates in their South Florida offices to stay competitive with other area firms. Miami-based Greenberg has boosted its combination of base pay and bonuses for first-year lawyers to a range of $110,000 to $120,000, while Tampa-based Carlton Fields boosted first-year pay in its two South Florida offices to $93,000, plus a $7,000 bonus.

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Despite the tough economy, Greenberg Traurig and Carlton Fields are ramping up pay for associates in their South Florida offices. Miami-based Greenberg has boosted its combination of base pay and bonuses for first-year lawyers by $2,500, to $110,000 to $120,000. It also increased pay for all South Florida associates in recent weeks. Matthew Gorson, the firm’s managing partner for the Southeast and for the Miami office, said the increase reflects the 816-lawyer firm’s strong financial performance and its desire to remain a top choice for the best law school graduates. “I did it because we always increase people every couple of years,” he said. At 210-lawyer Carlton Fields, Miami managing shareholder Charles M. Rosenberg said that the Tampa-based firm has boosted first-year pay in its two South Florida offices to $93,000, plus a $7,000 bonus — up from the firm’s $80,000 to $85,000 base pay range of the past two years. In addition, the firm raised pay for all levels of associates. It has 65 lawyers in Miami and 25 in West Palm Beach. “We’re really trying to hire the very best legal talent and our salaries have to be competitive,” said Rosenberg, whose 100-year-old firm only entered the Miami market five years ago. Overall, however, several major South Florida law firms contacted by the Miami Daily Business Review say they’re holding to the pay levels of the past two to three years. A handful of top Miami firms and Miami offices of out-of-state firms raised first-year pay to the six-figure level during a nationwide law firm salary spurt in 2000 and 2001. At that time, some Silicon Valley and Manhattan firms began paying their rookies in the range of $125,000. Some law firm managers, including Greenberg Traurig chief executive Cesar Alvarez, criticized the sharp increases, saying they were financially unsustainable. Since then, South Florida firms have tinkered with compensation formulas, but the upper reaches have remained around $105,000 for top talent, including base pay and bonuses. At the 40-lawyer Miami office of 1,300-lawyer Morgan Lewis, for example, first-year pay hit $100,000, plus $5,000 bonus a couple of years ago and has stayed there, said Miami managing partner Mark E. Zelek. Miami-based Bilzin Sumberg Baena Price & Axelrod has been paying about $90,000, plus a $15,000 bonus. Managing partner John C. Sumberg said that overall pay level has held steady over the past three years. But, he said, the firm has raised the base component and reduced the bonus because the associates “seemed to like the certainty of it.” Steel Hector & Davis in Miami also is standing pat at $90,000 in base pay and a $15,000 bonus, plus a discretionary bonus on top of that, said hiring partner Edwin G. Torres. Holland & Knight’s first-year pay remains at $105,000, which includes $95,000 in base pay, a $5,000 bonus and two later payments totaling $5,000, said Jeffrey P. Bast, Miami co-chairman of the firm’s associate evaluation committee. While first-year pay is generally fixed at that level with no further discretionary bonuses, as of Jan. 1, associate pay beyond the first year was restructured to place more emphasis on performance and performance bonuses, he said. Akerman Senterfitt also is holding at the $105,000 level in South Florida, said J. Thomas Cardwell, chairman of the 360-lawyer statewide firm, which has 205 lawyers in its South Florida offices. Sumberg noted that to accurately compare pay levels at different firms, it’s necessary to know how each firm calculates the first-year figures and how often the firm doles out discretionary bonuses. That’s because some firms, like Greenberg Traurig, consider the first year of work to cover a 15- to 16-month period. That, according to Greenberg, covers a period in which third-year law students hired by the firm work for four months while still in law school, graduate in June and take a vacation, then return in September or October to start their first full year in earnest. While the base pay for that period would remain at $97,500, the firm hands out bonuses over the entire 16-month period. So when the total is calculated to reflect a 12-month year, it comes out looking higher. Using that same method, Sumberg said, Bilzin Sumberg’s first-year pay would come to $108,750, not including additional performance bonuses that the firm sometimes awards. COMPETITIVE ON PAY Carlton Fields’ Rosenberg said his firm made the decision to enhance associate pay because it is growing and wants to attract first-year and lateral associates to its ranks. The firm has six summer associates in its Miami office this year who would be eligible for the new pay level if asked to join the firm upon graduation, he said. Ira J. Coleman, managing partner in the 25-lawyer Miami office of McDermott, Will & Emery, said the Carlton Fields move “puts them more in the market.” To attract top law graduates, a law firm must pay a certain minimum amount that’s competitive with other top firms, Coleman said. Beyond that level, however, the best prospects care more about a firm’s culture and where they perceive they fit than about a pay difference of $2,500 or so. At Greenberg Traurig, base pay for first-year lawyers went up about 2.5 percent, to $97,500, Gorson said. A series of bonuses then pushes first-year pay to $109,500. In addition, there is an additional discretionary bonus of $2,000 to $10,000, pushing the upper pay level to nearly $120,000. The firm expects the base to hit $100,000 in 2004, Gorson said. “We expect to hire the best people and they should be getting the best pay.” That kind of raise represents a big investment for Greenberg Traurig, which has about 75 associates in Miami and about 75 more in Fort Lauderdale and West Palm Beach combined. But the firm appears to be in good position to raise pay, with its gross revenues nationally up substantially for the 2002 fiscal year. Despite the increases, Gorson and other South Florida managing partners stress that they’re being cautious on pay and want to avoid another bidding war for first-years like the one that accompanied the late ’90s technology boom. Big salaries are appropriate when work is flowing, but many firms across the country have retrenched and have laid off lawyers to cut expenses during the recession of the past two years, Gorson warned. Coleman, of McDermott Will, said that salary boosts can hurt associates as well as the firms. “It just puts extra pressure on the associates,” said Coleman, who is on the 1,000-lawyer firm’s nationwide finance and compensation committees. “If they’re going to get these big increases, performance standards are going to increase, in terms of hours and quality. There’s going to be less development time given to associates. “If I’m an associate,” he added, “I’m going to be careful what I wish for.”

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