The announcement, along with news that Cleary Gottlieb Steen & Hamilton; Kirkland & Ellis; Skadden, Arps, Slate, Meagher & Flom and Willkie Farr & Gallagher are also raising salaries, means at least half-a-dozen law firms have succumbed to the pressure to raise associate compensation to new heights in just 24 hours.
On Wednesday, as Above the Law first reported, Davis Polk & Wardwell; Paul, Weiss, Rifkind, Wharton & Garrison; Quinn Emanuel Urquhart & Sullivan and Sullivan & Cromwell each matched the pay scale and bonuses set by Cravath earlier this week. Cravath, in turn, had adopted the initial salary increases set by Milbank, Tweed, Hadley & McCloy this month for its junior associates, but sweetened pay for its midlevel and senior associates.
At Weil and the other firms adopting the new-and-improved pay scale, associate base salaries, effective July 1, are as follows:
- Class of 2017 — $190,000
- Class of 2016 — $200,000
- Class of 2015 — $220,000
- Class of 2014 — $255,000
- Class of 2013 — $280,000
- Class of 2012 — $305,000
- Class of 2011 — $325,000
- Class of 2010 — $340,000
New York-based Weil is also implementing special bonuses to its associates, consistent with bonuses announced by Simpson Thacher & Bartlett last week.
“On behalf of all Weil partners, thank you for your continued hard work and dedication,” Weil executive partner Barry Wolf said in a memo.
Aiming for the Middle?
While these increases might have first-year associates feeling giddy (or jealous), legal experts agree that a key aim of the raises is to recruit and retain midlevel associates.
In the pay scale set by Cravath and matched by all five firms, the biggest jumps in compensation occur in the fourth, fifth and sixth year, noted Dan Binstock, a partner and recruiter at Garrison & Sisson Inc.
“Those tend to be the years in which laterals are most attractive because they have gained the training and experience at another firm and can hit the ground running,” said Binstock. ”But there’s a long runway where firms don’t have to worry about making partnership decisions in the immediate future,” he added.
Leaps of $35,000 and $25,000 in compensation for midlevel associates show that recruitment and retention are clear priorities, Binstock said.
“This combined with Weil Gotshal’s recent move to reduce the partnership track has an underlying or more overt signal of this being a real retention play,” Binstock said, citing the firm’s decision to allow associates to obtain partnership after seven-and-a-half years.
After Milbank announced plans to increase its associate salaries, close to a dozen firms or more have announced they would be matching its scale or better.
But the salary increases have been limited to high profitability firms, said law firm consultant Brad Hildebrandt.
“Retention and recruiting within the firms that have raised those salaries is pretty intense, because the number of students available to them that would meet the qualifications of those firms is very limited,” Hildebrandt said.
He cautioned that most firms in the United States aren’t competing for this same crop of talent, and should tread cautiously when it comes to pressure to announce raises.
“Hopefully sanity will prevail, and there won’t be a massive change in associate salaries,” Hildebrandt said.