Biglaw, Money

Delaware Moves To $160K: New York Should Be Embarrassed

The starting salary for New York firms is now officially a joke.

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Morris, Nichols, Arsht & Tunnell,
a firm that counts as “Biglaw” in Wilmington, Delaware (aka your local counsel down I-95), has raised starting salaries for entry-level associates to $160,000. Tipsters report that the “big four” in Delaware (don’t laugh) usually follow each other. So if Morris, Nichols, Bridge & Tunnell is moving, we can expect Potter Anderson, Richards Layton, and Young Conaway to follow suit.

You know who else pays $160,000 to starting associates in Delaware? Skadden Arps. Paying a higher salary than local competitors was a recruiting advantage for the firm for years. That advantage is now gone, unless Skadden wants to pay more in Delaware than ANYBODY IN NEW YORK. If you are a desirable candidate coming out of law school, you can make the exact same starting salary in New York as you can in Houston or D.C. or Chicago or freaking Wilmington, Delaware. Welcome to the End Times.

When Morris, Nichols, Arsht & Crafts is paying the same starting salary in Wilmington as Cravath, Swaine & Moore is paying in Manhattan, something is horribly wrong.

What’s wrong is that New York Biglaw salaries have stagnated. The pay scale hasn’t seen a wholesale raise since January 2007 — 2007, yo. You’re telling me that we’ve had two terms of a Democratic president, and the lawyers are the only ones who can’t get a raise?

The $160,000 New York firms paid in 2007 should be something like $180,000 by now, just to keep up with inflation. Firms have raised salaries just about everywhere else besides New York since 2007. Pay in New York used to be an incentive, now it’s a ceiling.

How are the firms getting away with this salary stagnation? Are they colluding? It strains credulity to think that each firm independently decided to not bump up the pay scale in New York for eight consecutive years. But managing partners don’t exactly all have to get together in the steam room of the Harvard Club to figure out where to set salaries (you’re welcome, from Above the Law).

While the recession is in the rearview mirror, the supply of entry-level attorneys still greatly outstrips demand. You can’t walk into an office building in this city without a gang of contract attorneys crawling out of an interior office offering to binder your hot docs for food.

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And you wonder if the our digital and interconnected age makes salary disparity between cities somewhat untenable. A case might require work from multiple offices, and it’s hard to pay people in Chicago less than you pay people on Wall Street for the same work. Certainly, it makes it harder to recruit in Chicago if associates there know that the firm values its New York associates much more highly.

All that said: MN A&T State now pays just as much as your daddy’s white-shoe law firm. That alone suggests that New York firms are underpaying their new hires. Hard as it is to believe, the New York starting Biglaw salary is now a joke.

Only shame will make that change.

Earlier: NY To $190K!? Which Firm May Be Raising First-Year Salaries?
5 Reasons These Biglaw Bonuses Suck

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