NY To $190K: If Not Now, When?
Some speculation as to when this blessed event might happen.
In our expanded poll about which firm would kick off the next round of Biglaw pay raises, the winner was Quinn Emanuel, with 28 percent of the vote. Second place went to Cravath, winner of the original poll, and third place went to Simpson. This sounds about right to me; all three firms are very prestigious and very profitable, and all have reasonable leverage.
Now that we’ve discussed who might lead the charge, let’s move to the next logical question: when? Biglaw associates are probably wishing it had happened yesterday — or several months ago, like back in October 2015, when we had a bit of a false alarm — but those wishes have not come true.
If you look back at the history of Biglaw pay raises since 2000, you’ll see they happen on average about once every five years. But maybe that’s not a very useful statistic — the sample size of three is just too small, and the gaps are erratic (six years between the first and second, one year between the second and third, and more than nine years since the last one). There is, however, a strong case to be made that a salary hike is overdue.
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Here’s another way of looking at the timing question: time of year. If you look at the history, you’ll see the three most recent pay jumps all happened early in the year: January 2007, February 2006, and February 2000.
Moving in the first quarter makes a certain amount of sense. At the start of the year, firms have generally completed their collections and analyzed their performance for the prior year, so they have a sense of where they stand financially. And if they want their annual projections for the new year to be accurate, they want to have a good grasp on their compensation costs, earlier in the year rather than later.
So my guess as to when we’ll get the next Biglaw pay raise is the first quarter of 2017. But that is, of course, nothing more than rank speculation.
Here’s a scary scenario (and an option in our reader poll below): never. What if an economic shock plunges our nation, and perhaps the world, into another recession? And then what if, in the wake of that new recession, technological advances (read: artificial intelligence and robot lawyers) depress demand for new associates to the point where firms don’t have to pay more than $160,000 to get the talent they need? There’s no economic law requiring jobs and wages in a given sector to always increase. Just ask coal miners.
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What do you think? Vote in our poll, and email us too (subject line: “NY to 190”).
When will the next round of Biglaw base salary raises get kicked off?
Loading ...Earlier: NY To $190K: An Addendum On Leverage
NY To $190K: Who Will Lead The Charge?
NY To $190K: 5 Arguments In Favor Of A Biglaw Pay Hike
NY To $190K!? Which Firm May Be Raising First-Year Salaries?
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David Lat is the founder and managing editor of Above the Law and the author of Supreme Ambitions: A Novel. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at dlat@abovethelaw.com.
