Greenberg Traurig has bumped up pay for its first-year associates in Miami and Fort Lauderdale 16 percent from $125,000 to $145,000.
“While the need to deliver exceptional value to clients is stronger than ever and business conditions change from time to time in each market, we remain committed to adjusting compensation as may be necessary to hire and retain the very best,” Greenberg CEO Richard Rosenbaum said in a statement.
While he was unavailable to discuss the reasons for the firm’s pay hike, legal observers and South Florida managing partners speculated on Greenberg’s motivation. The pay hike does not affect the West Palm Beach office.
When the legal job market and economy were good in the mid-2000s, large law firms began offering record first-year associate salaries, which traditionally were matched by other firms in lockstep fashion. Salaries were compared on the website greedyassociates.com.
However, since the recession, few law firms have raised first-year salaries, and some have even cut them. The one exception was Dallas-based litigation firm Bickel & Brewer, which raised first-year associate salaries for its 2013 class from $175,000 to $185,000.
It’s unclear if other law firms will follow Greenberg’s lead.
Olivia Martinez-Hoch, a spokeswoman for Holland & Knight in Miami, said the firm pays first-year associates in South Florida $135,000. She did not rule out a raise for associates.
“It’s something we review to make sure we’re competitive, and it’s something we will review in the future,” she said.
Foley & Lardner already pays first-year Miami associates about $145,000, said Miami managing partner Bill Davis.
“It doesn’t surprise me that Greenberg is doing that,” he said. “It’s a very competitive environment to get first-tier associates, and it’s what the top firms are paying. If you’re targeting the high end of the market, it’s very competitive.”
But Byrd “Biff” Marshall, president of GrayRobinson, said his firm pays first-year associates $105,000 in South Florida and doesn’t plan to change that.
“We get very good candidates interested in working for us at that rate, and we don’t intend to pass along higher prices to our clients,” he said.
Akerman Senterfitt does not reveal its salary figures.
Some legal observers questioned why Greenberg would raise associate salaries when attorneys are job hunting in a saturated market.
“I never question Greenberg’s acumen, but I don’t see nor do I understand a market necessity to do this, so I remain interestingly perplexed by their motivation,” said Joe Ankus, a legal recruiter at Ankus Consulting Inc. in Weston. “You’re talking about a surplus of talent that is unprecedented. The supply so grossly exceeds the demand that I scratch the back of my head and say, ‘why?’”
But others say Greenberg’s move is understandable with out-of-state law firms moving to Miami and specifically recruiting Greenberg lawyers. Jones Day and DLA Piper are two examples of national law firms that opened Miami offices with Greenberg defectors.
The move also could signal an upswing in the South Florida economy, where billion-dollar deals are returning, legal recruiters say.
“I think it means the economy is getting better,” said Arly Walker, a legal recruiter with Search for Excellence Inc. in Fort Lauderdale. “I have been hired for more associate searches, hiring is improving. Law firms like Greenberg want to keep their people happy so they’ll stay. That’s a very positive thing. Hopefully other firms will follow.”
Abbe Bunt of Bunt Legal Search in Hollywood agreed.
“I think it’s a good sign,” she said. “Deals are back on the table, people are looking for real estate attorneys. We also haven’t raised salaries here in a few years, so this will bring it more in line with other major metropolitan cities.”