Associate Salaries, Biglaw, Law Schools, Small Law Firms, Solo Practitioners

Back In The Race: Will The $180K Biglaw Starting Salaries Attract A New Group Of Law School Lemmings?

News of the Biglaw salary increases is likely to attract a few people who would not have considered law school in the past.

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resume girlThe media is continuing to cover the Biglaw salary increases. They will continue to do so for some time as other firms play “me too” and commentators discuss its impact on the future of law and legal employment.

And you know who else has been reading this continuous coverage? Law school applicants.

Cravath’s salary announcement was made on the day of the June LSAT examination. June is a crucial month for many law school applicants. They are thinking about which law school to attend or even whether they should attend at all. But there is not much time left to negotiate down tuition or to explore other options as they will soon have to pay tuition deposits, finalize financial aid, and set up housing arrangements on or near campus. Those who are on the fence about attending might decide to go based on this news.

If left unchecked, law school applications will likely rise in the future. While some applicants will have solid GPAs and LSAT scores, many will have marginal credentials and will likely attend low-ranked law schools with no discounts. Their chances of getting hired at a major law firm will be slim to none, which means they will have to struggle with student loan payments for the rest of their lives.

I understand that some of people with mediocre grades make up for it with passion and a track record of overcoming adversity. They spent most of their lives trying to prove themselves to everyone.

Some might think that the salary increases are a sign that the legal job market is improving. They think that if the large law firms are doing it, then midsize and small firms will follow suit by the time they graduate. They also think that if firms have money to pay raises, they must also have money to hire. Of course, historically this has not been true as small firms are generally not interested in keeping up with the Cravathians.

Noah Scheiber of the New York Times tried to put things into perspective and warn others in his recent article featuring an in-depth look at a lower-ranked law school with atrocious employment and bar passage rates. One person Scheiber profiled was an ex-cop who ended up setting up his own private practice with a partner. It is unclear whether he did this because he had no other options. The piece also featured another recent grad who now works at a convenience store but with a very inconvenient law school debt.

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Also, most law school applicants don’t know the first thing about how a law firm operates. Some of these so-called elite firms cannot sustain the salary increases for long. A few people here have suggested that some large law firms will have to cut bonuses, reduce future hiring, and even resort to layoffs if the salary boost makes the firm unprofitable. So it is possible that the salary increase will only make it more difficult to obtain an entry-level job at a major law firm.

Finally, will things remain the same in three years? The last salary increase happened in 2007. In 2008, there was a recession, and offers were either cancelled or deferred. And of course, everyone at ATL tried to turn lemons into lemonade by shaming the firms that laid off associates. Remember being Lathamed?

So in sum, news of the Biglaw salary increases is likely to attract a few people who would not have considered law school in the past. And their decision may be based in part by misinformation and optimistic idealism. These people are always going to be around. The only thing we can do is to help them make an informed decision.

One thing elite law firms and influencers can do is to announce associate raises between August to October. In other words, make the announcement soon after law schools start the semester. I have heard that firms now conduct on-campus interviews (OCIs) from July to August and extend offer letters to 3Ls the following fall. If this is true, then I don’t see how announcing the raises during those months will negatively affect the firms’ recruiting efforts. Also, it will give law school applicants about a year to observe how the market and commentators react to the salary increases. Within that time frame, applicants should be able to determine whether they have a fair shot at obtaining a job at a major law firm.

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Shannon Achimalbe was a former solo practitioner for five years before deciding to sell out and get back on the corporate ladder. Shannon can be reached by email at sachimalbe@excite.com and via Twitter: @ShanonAchimalbe.

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