The homogeneity of associate starting salary across Big Law is an economic nonsense. As I argued yesterday, it’s irrational to compensate all 60,000 associates at the Am Law’s 125 most profitable firms at that same rate as the 3,000 associates at elite New York firms—they’re working different hours, they’ve been through recruiting processes with different levels of selectivity, they’re not all the same quality of lawyer—they’re simply not interchangeable.

I heard from a number of readers who, not disputing the above, look at the situation through a different lens: the ratio of partner compesation to starting associate salary. Figure 1 shows this ratio before the incipient round of increases for the 150 most profitable firms in the Am Law 200.

I can’t identify a compelling way to define an appropriate level for this ratio. I confess, however, to carrying a benchmark in the back of my mind. It comes from when I was involved in MBA recruiting for a preeminent consulting firm. We told potential recruits they could expect to see their compensation increase tenfold in their first 10 years at the firm, a lightly-disguised statement that a junior partner earns 10 times the starting salary. Obviously, law firms are different, that was nearly 20 years ago, and it was junior partner (not average partner) comp. But the notion that the average equity partner, who is being compensated as a business generator, trusted client mentor, billable hours machine, and owner of the business should earn such a multiple doesn’t seem crazy.

Looking at the data through this lens yields an implication not dissimilar to what I was getting at in the first part of yesterday’s piece: firms ranked below about 45th by PPP would be exacerbating an injustice to their partners by matching the super-elite firms’ salary increase. The firms ranked 45th to 55th are: Kasowitz Benson Torres; Orrick, Herrington & Sutcliffe; Baker Botts; Lowenstein Sandler; DLA Piper; Morrison & Foerster, Sheppard Mullin Richter & Hampton; Loeb & Loeb, Patterson Belknap Webb & Tyler; and Jeffer Mangels. These are the firms to watch most closely. Will one of them take a stand?


Hugh A. Simons, Ph.D. is formerly a senior partner at The Boston Consulting Group and chief operating officer at Ropes & Gray. He welcomes readers’ reactions at HASimons@Gmail.com

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