A recent study by economists at UC Berkeley gives employers a nice argument for keeping salaries a secret. Well, luckily for you, I’m not your employer. Therefore I have no qualms about sharing with you Part 2 of the results from our small-firm salary survey.
In your emails following Part 1, many of you asked that I take the practice experience element of the survey and show how it correlates to salary. Good point. I actually had that in mind from the start, but ended up pushing it into my Part 2 draft when I decided to split up the post.
But you don’t care; you just want the numbers. So, with the final caveat that I’m sure I’ll never be able to fully satiate your salary hunger, here’s the latest snack…
To start, let’s first recap who responded to the survey. Just over fifty percent are in their first two years of practice (first chart below), and the overwhelming majority of the respondents (almost 70%) are in their first two years of small firm practice (second chart below).
Are these numbers a collective sign of the times — and by “times,” I mean “depressing times to be looking for a job”? In other words, are more people jumping to smaller outfits and/or starting their own shops straight out of school?
(Or perhaps our readership base is just slanted toward younger practitioners? See, I can be optimistic too.)
In either case, the important question is: How do salaries correlate with experience? How much will you make as a first year? (Spoiler alert: not as much as you want.) How much will you make if you can survive the first couple of years (see previous parenthetical)?
Here’s a graphic (click to enlarge):
Notice, as with the aggregate averages I displayed in Part 1, the outliers (i.e., the reported salaries of $3 million and $4 million) make a big difference. By removing these two figures from the data set, we end up with a much more intuitive step-up that directly correlates with your overall experience. Taking out the next highest salary in the 9+ “years of practice” group brings the overall average all the way down to $175,000.
Of course, objectively speaking, that’s a fine salary; but you don’t have the luxury of an objective viewpoint. You’re lawyers, and therefore most likely burdened with debt and the need to have nice things. If maximizing income is a priority for you, maybe a small firm isn’t the right move for you yet.
As you can see below, the salary breakdown by the number of years in a small firm of solo practice mirrors the chart above (again, click to enlarge):
I should note that the numbers shown above for the “9+” figure are skewed by the fact that the person claiming the $3 million income didn’t specify how long he or she has been in a small firm. Thus, the “9+” bar doesn’t include that salary, and the “9+ (minus outliers)” figure takes out both the $3 million and $4 million outliers.
Viewing the median numbers for each group, we see that the numbers are slightly more depressing — though not totally surprising. You shouldn’t expect to strike it rich in your first year of a small firm or solo practice. Sure, there are those that do, but that shouldn’t be your expectation. Unfortunately, I’m afraid that it is, at least for some current and future law students (based on this recent survey). But let’s get away from unfounded expectations and back to reality.
Based on your responses, the availability of bonuses in small firms appears to be completely erratic. This is, of course, due to the fact that a small firm’s bottom line is dependent on fewer lawyers and fewer practice areas. For example, if you’re a PI attorney and have a down year, there isn’t necessarily another practice area (say, foreclosure defense) to supplement your earnings. Thus, the bottom line suffers, and no bonuses will be paid. Of those of you who even have the option of a bonus, you displayed little optimism about this year’s numbers.
My experience with bonuses went something like this: My job offer mentioned discretionary bonuses. One day, about 13 months into my employment, the two partners called me into their office and casually informed me that I’d be receiving a $2,000 bonus. They said something about trying to share when the firm is making money, I said “thank you,” and that was that (I was genuinely thankful, by the way). That was October 2007. I never heard the word “bonus” within the firm’s walls after that day.
Fear not, though; year-end bonuses are not the only path to riches. Many of you have some version of an “eat what you kill” policy — even first-years. This sounds great in theory, but is less great in practice, especially if you’re not great at networking/drumming up business — which is why you should avoid small firms if you’re socially inept. I was not fully cognizant of the emphasis placed on this particular skill in the practice of law, especially in a smaller firm, when I started. I chalk it up to my failure to understand, until after the checks were written, that law school would actually be a three-year job search (because I did not get much OCI lovin’). More on selling yourself in future columns.
In more depressing news, a handful of you are working on just a salary with no benefits whatsoever. This saddens me. I mean, I don’t have benefits at the moment, but then again, I’m just a temp employee who writes in his spare time. Additionally, there’s a group of you working for an hourly wage rather than a salary, with — and this is really bad — at least one of you not even being paid time-and-a-half for overtime. I’m no labor lawyer, but I’m pretty sure you should find somebody who is.
There are plenty of other ways to parse the survey data that I haven’t done. For example, I didn’t do a thorough analysis of salary by practice area, but can offer two good reasons why: (1) my totally non-scientific review of the data didn’t reveal any real correlation, and (2) I just didn’t have time. I did see a general tendency for the top earners to be engaged in corporate litigation, white-collar criminal defense, and PI work (presumably those who have hit it big at least once — because there is also a cluster of PI practitioners near the bottom of the scale). I’m keeping the results around in hopes of getting that information to you at a later date, but please don’t hold your breath.
For those of you still hungry for salary results, see the links below. There will be more surveys to come, so don’t hesitate to email me about other information you have, need, or want. I’m on Twitter, too. Hope you guys had a great weekend.
2010 Associate Salary Survey report (as of 4/10/2010) [NALP]
Bigger is Better and Men Still Make More [Adrian Dayton]