Any hope that starting salaries at large law firms would climb past the $160,000 mark would appear to be forlorn. For the third year in a row, the percentage of large firms paying that much to new associates fell during 2012.
That’s according to the National Association for Law Placement (NALP), which released the results of a survey of law firm pay on September 20.
NALP reported that, for the first time since 2007, fewer than half of the first-year associates at firms with 700 or more lawyers earned top dollar, or $160,000. Only 46 percent of those firms paid at that level, and most of the firms that answered the survey indicated pay levels would remain steady for the recently graduated class of 2012.
The one exception to the anticipated stagnation was firms of between 251 and 500 lawyers, which reported an expected median increase to $135,000 from $125,000.
“Compared to the period of 2006 through 2009, when associate salaries were rising year-on-year at a steady clip, in the period since the recession hit the legal industry we have seen associate salaries remain more or less static,” said NALP executive director Jim Leipold. “Among the largest firms, there has been a measurable backing away from $160,000 as a starting salary, though that level of compensation is still dominant in New York and a few other markets.”
About two-thirds of large firms in Los Angeles and Washington reported starting salaries of $160,000, but 90 percent paid that much in 2009, NALP reported. New York fared slightly better — 87 percent of firms with 700 or more lawyers reported paying new associates $160,000, while 75 percent of all firms with 251 or more lawyers did so.
Nationally, the median starting salary at large firms was $145,000. Firms of 251 to 700 attorneys in Chicago, Los Angeles and Washington reported median starting salaries between $135,000 and $145,000, while the corresponding median for San Francisco remained at $145,000.
NALP compiled salary data from 21 cities and concluded that compensation varied dramatically. Salaries of $160,000 were more common at large firms in the Northeast and on the West Coast, while large firms in the Midwest tended to pay new associates a median of $125,000 and large firms in the South paid $135,000. For example, the median starting salary at large firms in Seattle was $120,000 and in Minneapolis $110,000.
The salary picture at smaller law firms was less clear. The median starting salary for all law firm jobs combined actually rose from $115,000 in 2011 to $125,000 this year. For firms with between two and 25 lawyers, the median was $70,750, while the median was $125,000 for firms of 501 to 700 attorneys.
“Associate salaries at smaller firms have shown very modest movement, both upward and downward, over the last three years,” Leipold said. “We would not expect to see much widespread upward movement in associate salaries until the demand for legal services in North America picks up considerably from where we are today.”
The introduction of associate competency levels at some law firms has complicated the pay picture somewhat. At firms that have adopted such systems, new associates move through a series of levels based on acquiring certain skills, and receive pay bumps with each completed level.
Firms of 251 or more lawyers with this system reported a median starting pay of $133,000, increasing to $164,500 by the third competency level. These systems are too new to offer any historical comparisons, NALP reported.
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