Associate Salaries, Biglaw, Money, NALP, National Association for Law Placement (NALP), Quote of the Day

NY To $190K? Not So Fast, Because $160K Salaries Are No Longer The Norm

Stop trying to make $190,000 salaries for first-year Biglaw attorneys happen. It’s not going to happen.

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In the simplest terms, it is fair to say that law firm starting salaries are flat. The fact that the incidence of $160,000 as the starting salary at the largest law firms is less than it was before the recession is really more a reflection of the changing contours of the large firm market, not the fact that law firms are paying entry-level associates less than they used to. Many law offices that are part of large firms, particularly those in the largest markets, continue to pay $160,000, but the data since 2009 clearly show that the large firm market now also contains many firms that do not pay $160,000. In some ways the data simply reflect the growing cohort of large firms, and it shows that they are not a monolithic entity. In many markets starting salaries of $145,000 or $135,000 or even less are the norm.

— James Leipold, executive director of the National Association for Law Placement (NALP), commenting on the shrinking prevalence of $160,000 starting salaries for first-year Biglaw associates in NALP’s 2014 Associate Salary Survey.

(What other information can be gleaned from the 2014 Associate Salary Survey?)

Much has changed since the legal profession entered this period referred to as the “new normal.” For example, in 2009, about two-thirds of first-year Biglaw associates reported starting salaries of $160,000, whereas in 2014, only 27 percent of first-year Biglaw associates reported starting salaries of $160,000.

The key takeaway here seems to be that Biglaw firms aren’t paying their associates less, per se, but that Biglaw firms, in general, are very different from the creatures that they were before the recession. In another sign of the times, the national median salary for first-year associates is $135,000, which is the lowest it’s been since 2006. Here’s more information from the NALP press release on the salary survey:

As might be expected, in many markets, including Chicago, Los Angeles, New York, and Washington, DC, first-year salaries of $160,000 are generally still the norm at the largest firms, although, following the national pattern, they are not as widespread as they were just a few years ago. For example, in 2009, about 90% of offices in firms of more than 700 lawyers in Los Angeles and Washington, DC reported a first-year salary of $160,000; in 2014 only about 40% did so, resulting in medians of $145,000 and $150,000 in those cities, respectively.

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That’s not the only slightly depressing news that’s coming down the pipeline. It looks like in the future, associates will be less likely than ever before to see $160,000 as a starting salary at a large law firm.

Information reported by firms concerning their anticipated base pay for incoming class of 2014 associates (lawyers who will start work in fall 2014 and whose first-year salaries will be measured in 2015) suggests that while $160,000 will remain the single most common starting salary in firms of more than 700 lawyers, it will be the starting salary for just one-quarter of these firms, resulting in a median of $130,000 for these firms, compared with the $147,500 anticipated salary that was reported last year for the class of 2013. In firms of 251-500 lawyers and 501-700 lawyers, $160,000 is also the single most common salary for incoming class of 2014 associates; the respective medians were $115,000 and $135,000.

To see where you stand compared to your peers, take a look at this useful chart (click to enlarge):

We’re sorry to say it, but the “new normal” is here to stay — in fact, it’s just normal now. Get used to it, and stop trying to make $190,000 salaries for first-year Biglaw attorneys happen. It’s not going to happen.

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Top Salaries for First-Year Associates Remain Flat at $160,000, But Prevalence Shrinks as Large Law Firm Market Becomes Less Homogenous [NALP]
Change in BigLaw ranks leads to shrinking prevalence of $160K starting pay [ABA Journal]

Earlier: Nationwide Pay Raise Watch: Could Philadelphia To $160K Drive NY To $190K?

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