Associate Salaries

It’s pretty tough being a first-year associate these days. You’re working hard, you’re terrified of getting Lathamed, and you can’t even complain, because everybody thinks you should be grateful to have a job.

But at least you don’t have to deal with bright and unbroken summer associates, rolling through your office with smoke billowing up their asses at every point. The recession has taken its toll on summer associate programs too.

At Sheppard Mullin, however, summer associates are actually making more money (per paycheck) than first-year associates. In fact, the summers are even making more than some second-year associates.

How did this happen?

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Things haven’t been easy for Bryan Cave and its associates during this recession. But today is a good day. There is no need for an A.K.

Last night, we received word from tipsters that BC associates across most of the firm’s offices will be told that they are getting a raise:

Bryan Cave announced to associates that associates will be getting a pay raise effective august 1 and another at the “normal” pay raise date of January 1.

Our sources tell us that associates in all U.S. offices, and London, will receive a raise.

However, the salary bump will not affect first years. The BC starting salary will remain at $145K in Chicago.

The amount of the raise will obviously vary by office, but we’ve got some information for the Chicago people…

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Back in February, we wrote about various compensation developments over at Pillsbury Winthrop. At the time, the firm said it was considering moving away from a lockstep model in favor of a more performance-based compensation system.

The firm has not yet killed killed lockstep — a move that has historically generated mixed to negative reviews from associates at other firms. Instead, it has done something that has proven much more popular.

Last month, the Pillsbury dough boy baked up some delicious-smelling pay raises. Nothin’ says lovin’ like money from the oven!

So, what are the details?

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Career Center AboveTheLaw Lateral Link ATL.jpgOur recent Career Center survey asked about starting salaries and annual salary increases at firms across the country.  Over 70% of respondents indicated that their firms increase salaries during the traditional month of January.  About 8% percent of respondents, including associates at this Midwestern firm, see their salary increase in February.  Another 9%, including associates at these two global firms, get raises in March.  The remaining 12% of respondents indicated that their annual raises come at some later point in the year.  

Check out the full survey results after the jump — and visit the Career Center, powered by Lateral Link , for more on changing compensation practices at firms across the country. If you are an employer seeking more detailed information on firm salary scales please contact T.J. Duane at tjduane@laterallink.com.

Full survey results, after the jump.

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Nixon Peabody is one of the firms that has moved towards a merit-based pay structure. The firm also cut starting salaries down to $145K a year ago. So you’d think that any information on a Nixon Peabody salary raise would be greeted favorably.

Not so much. A tipster tells us:

I can confirm that I received a raise. I can confirm that it sucks. Anything else?

Oh boy, that doesn’t sound good. Is anybody feeling like a winner at Nixon Peabody?

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Career Center AboveTheLaw Lateral Link ATL.jpgWith all the salary freezes, thaws and permanent meltdowns over the past year, it’s hard to keep track of what associates at law firms are actually making these days. And associates are learning that an annual lock-step raise is no longer a sure thing under new compensation systems at many firms.

This week our ATL / Lateral Link survey asks about starting salaries and annual salary increases at your firm. We’ll use the information to update the ATL Career Center and bring you the results next week.

If you have information about your firm that you want to share with other career center users, please email us at careercenter@abovethelaw.com.

Last June, we reported that Howrey decided to make a big change to the law firm business model. The firm cut first year starting salaries to $100,000. In exchange, the first year program would involve a heavy emphasis on training. Associate billables would be capped at 700 hours and Howrey reduced the rates charged to clients for first year work. The low-salary/training emphasis carried on into the second year.

As we mentioned this morning, the Washington Post took a closer look at Howrey’s new program.

How is it going? Well, it seems great, unless you like money…

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Life outside of lockstep is like Forrest Gump’s box of chocolates: you never know what you’re going to get. A lockstep system for compensating and promoting associates has its drawbacks, to be sure. But at least it offers the virtues of transparency and predictability.

Earlier this week, we covered the arguably amorphous definition of “merit” at WilmerHale, one of several leading law firms to abandon lockstep. Today we turn our attention to Winston & Strawn, another prominent firm that has moved to a more “merit-based” system of compensation.

Back in February, we described Winston’s compensation scheme not as a box of chocolates — that would be sweet and delicious! — but as a black box. Among associates, nobody really knows what anyone else is making. As stated in the firm memo, “Individual associate salaries will be determined on a case by case basis based on seniority, performance and productivity factors and will be communicated separately to each associate.”

We now have a better sense of what’s going on at Winston, thanks to the recent release of individualized salary info (and some comparing of notes among Winston associates). And not everyone is happy….

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And additional info on stealth layoffs.

Back in December, DLA Piper decided to move to a merit based compensation system. Attendant to that move, the firms instituted a 10% pay cut, dropping starting salaries to $145,000. Despite widespread outrage among DLA associates, the firm repeatedly defended the move.

Other Biglaw firms that moved away from lockstep would not follow DLA down the salary rabbit hole.

Now, DLA Piper has given it up its quest to drive down associate salaries. The National Law Journal reports:

DLA Piper is raising associate pay by 10 percent, in a move that will return compensation to their levels before the economic downturn.

A memo released to attorneys on Thursday by firm leaders announced midyear pay increases in offices outside New York. DLA Piper raised salaries in New York in January to pre-recession levels of $160,000 for first-year associates.

Welcome back to the pack, DLA? Tipsters report that the firm is not quite there yet…

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Well, it’s about time. On April 13th, a small claims court in Florida will deal with a case where an associate is suing his former law firm over allegedly deferred compensation. Only $2,000 is at issue, but this is a battle of principle. The Daily Business Review (subscription) sets it up:

The salary deferral imposed by [Becker & Poliakoff] in May 2008 was temporary and necessary in order to avoid layoffs during the economic downturn, managing partner Alan Becker said….

Former Becker associate Richard Valuntas sued the firm last August, alleging Becker committed breach of contract and fraudulent misrepresentation by refusing to repay him the 12 percent deducted from his paycheck for several months. He also alleges Becker’s deferrals violated its own employment contract and policy manual.

You see, the firm promised restitution of the salary cut, and they did eliminate the cut in August of 2008 and gave associates make-whole payments. But only associates still at the firm received full restitution. Valuntas left Becker that August and apparently missed out on one of these restitution paychecks.

Despite the small amount of money involved, both litigants are going to the mattresses…

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