Associate Salaries

Some large law firms, when announcing year-end associate bonuses, also announce base salaries for the new year. In Biglaw, the salary scale hasn’t budged since January 2007, when Simpson Thacher announced the $160K scale (providing for base salaries ranging from $160,000 for first-year associates to $280,000 for eighth-year associates).

You could view this as a compensation cut, since we have had some inflation (even if not high inflation) since 2007. According to the inflation calculator of the Bureau of Labor Statistics, $160,000 in 2013, the latest year available, had the same buying power as $142,407 in 2007. Of course, law school tuition has climbed quite a bit since 2007 — so even for the lucky souls who land Biglaw jobs, the value proposition of a law degree isn’t as appealing today as it was back in 2007. You’re paying more for a degree that gets you less.

What’s the solution? Work for a firm that will pay you more than $160,000 as a starting salary, of course! Let’s say hello to the newest member of the $160K-Plus Club….

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When we recently ranked top law firms based on responses to the ATL Insider Survey, readers raved about Wilson Sonsini, which took the #5 spot on our list of the top 12 firms. According to one respondent, the firm boasts “entrepreneurial meritocracy, the best client base, endless opportunities, and smart helpful people. It is a unique place, perfect for the self-motivated overachiever.”

In terms of the five specific survey metrics, Wilson fared best in the compensation department. On a 10-point scale, WSGR scored an impressive 8.73 (out of 10) in terms of satisfaction with pay. (The firm’s other scores: 8.63 for culture, 8.33 for training, 7.80 for morale, and 7.33 for hours.)

But will Wilson Sonsini be able to maintain its high score on the comp front? Not everyone is happy with the firm’s latest bonuses….

(Please note the multiple UPDATES added to the end of this post.)

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The law firm of Goodwin Procter is in the news these days. Some of the firm’s top trial lawyers are defending Mathew Martoma — formerly of SAC Capital and Harvard Law School, where he famously falsified a transcript — in one of the biggest and most exciting insider-trading cases in history.

(Fun fact: one of the members of Martoma’s trial team, Roberto Braceras, is the son-in-law of Judge José A. Cabranes. So if the Martoma case ever winds up before the Second Circuit, Judge Cabranes may have to recuse.)

Martoma earned millions while at SAC Capital, and some of that money will be making its way into the coffers of Goodwin Procter. And some of that money will then get paid out as associate bonuses, which the firm recently announced….

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These are interesting times for Sidley Austin. Lately the firm has had lots of good news, such as its big expansion in Texas, counterbalanced by a little bad news (for an individual partner).

That’s at the partner level. What’s going on among the associate ranks?

Bonuses — announced and paid last week. Among the firms that do individualized rather than lockstep bonuses, Sidley is one of the earliest movers.

So how are Sidley Austin associates feeling about their 2013 year-end bonuses?

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Well, the bonus scale has been set. Cravath led — by copying their bonus payments from last year — and now everybody is following. I’m on record saying that these bonuses are underwhelming and disappointing.

Gone are the days where the first-year bonus represented a significant chunk of your law school debt. Sure, you can pay down some interest with your bonuses, or you can prudently save it, or maybe even invest it. But you can also blow it. I mean, it’s a “bonus,” right? In this depressed market, your bonuses look less like deferred compensation and more like “found money.” Instead of making a fiscally sound decision, using your bonuses for profligate, discretionary spending might make you feel better. (Disclosure: Elie Mystal is not a registered financial adviser and is too… stupid to follow a budget.)

Bonuses range from $10,000 for first-year associates to $60,000 for senior people. Professor Paul Caron of Tax Prof Blog tells me that associates can expect to take home about 60% percent of that, depending on where they live and how many dependents they have.

What can a young lawyer buy with that? In addition to what’s in the ATL holiday gift guide, here are 10 things…

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Lat here. Going into the 2013 Biglaw bonus season, indicators were looking mixed.

Cravath, the supremely prestigious and profitable law firm that’s the traditional market leader on bonuses — as in the firm most widely followed by other firms, not necessarily the firm that pays the biggest bonuses — announced another large partner class. Last year, that boded well for bonuses.

On the other hand, Biglaw’s overall performance has been somewhat anemic this year. The stock market might be hitting new highs, but many law firms are running in place.

People have been waiting forever for Cravath to make its big announcement. Now the wait is over: at 4:45 p.m. today, Cravath announced its 2013 year-end bonuses.

How are they looking? What’s getting stuffed inside associate stockings this holiday season?

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It’s Tuesday, November 26, past 5 p.m. Do you know where your bonus is?

When we surveyed our readership about 2013 law firm bonuses, 57 percent of respondents predicted that the first firm (traditionally Cravath) would announce during the week of Thanksgiving. That’s basically over. It’s theoretically possible we could get an announcement later tonight or sometime tomorrow, but it seems unlikely.

So what’s going on? Where. Are. The bonuses?

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The days of wild spending on associate salaries seem like a distant memory washed away in the Great Recession. It was an exciting time to be a lawyer when every year (or even mid-year) a firm-wide email would explain that the pay scale was going up as part of the ongoing arms race among Biglaw firms to attract talent. That trickled down to Midlaw and the Boutiques and suddenly there were coke-fueled orgies all around.

While the country’s financial outlook doesn’t inspire much excitement, lawyers might be getting back in the high life again, with a pay bump expected next year. NY to 190?

So how much more are you about to make?

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There’s good news, and there’s bad news. Or maybe good news with a catch, as we mentioned in Morning Docket.

The good news: Greenberg Traurig is hiring. The catch: the positions don’t pay $160,000 a year (or even $145,000, the new starting salary in GT’s Miami and Fort Lauderdale offices).

Following the lead of Kilpatrick Stockton, Orrick, and other Biglaw firms, Greenberg Traurig has created some new non-partnership-track attorney positions. They pay less than traditional partnership-track — or, in GT parlance, shareholder-track — positions, but the billable-hour requirements are lower and the training is better.

What do these positions look like? Let’s find out….

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[T]here is nothing about the current market that suggests starting associate salaries will be moving up any time soon.

James Leipold, executive director of the National Association for Law Placement (NALP), crushing the hopes and dreams of future Biglaw associates across the nation. Salaries for entry-level attorneys have been “essentially flat” since 2007 (although median pay rose to $160,000 once again after slipping to $145,000 last year).

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