Associate Salaries

Back in November, Baker Botts told us that they would be moving away from a lockstep associate compensation system and instituting a new merit-based system. Yesterday the firm released the base salary levels for its new four-tiered system. Here’s the statement from the firm regarding the basic changes:

The next phase of a talent management program — moving from a lockstep to levels format to track associate progress at the firm — was announced today by Baker Botts Managing Partner Walt Smith. This new format is the latest enhancement of a multi-year plan to better manage associate development at all experience levels.

“Implementing this program will allow us to remain competitive in our efforts to recruit and retain the best and brightest lawyers,” Smith said. “Importantly, it will help us foster an environment that emphasizes the attributes we believe are essential to our firm’s culture.”…

The compensation aspects of the program will be effective August 1, 2010. Base annual salary for entry-level lawyers will remain at $160,000.

The firm wouldn’t officially release the salary levels for more senior associates, but tipsters gave us the inside scoop…

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When I wrote the open thread on the Vault top ten, I wanted to say that none of the top firms froze salaries during the recession. But I couldn’t, because back in November Covington & Burling surprised many people by freezing associate salaries outside of New York.

But as we mentioned at the beginning of this month, salary shenanigans are so 2009. 2010 is the year of salary normalcy.

It appears that Covington received the memo…

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The prior reports of additional payments to some associates at Hogan Lovells, designed to reward these associates for making their billable-hours targets, were accurate — at least with respect to the New York office. And it turns out that these payments constitute what in ATL-speak we call “true-up payments” — i.e., payments designed to give associates the pay they would have received had a salary freeze never occurred and they had received the customary annual raise for seniority.

This may sound confusing, but it’s really not. Let’s take a look at the memo from Hogan Lovells….

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I’ve been critical of the National Association for Law Placement (NALP) in the past, but you have to give them credit for at least one thing: they have been tirelessly trying to make people understand that most lawyers do not make $160,000 a year straight out of law school.

In fact, NALP has been at the forefront of educating prospective lawyers on the dangers of focusing on “average” starting salaries. The average is meaningless. The median is just slightly more helpful, and NALP has been begging people to pay attention to the bimodal salary distribution curve that tells the true story of how much lawyers are likely to get paid.

And the bimodal curve is only useful if you are actually lucky enough to secure full-time employment. If you have to work part-time, God help you…

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Last Wednesday, the firm of Hogan Lovells — formerly known as Hogan & Hartson, before its recent merger with U.K.-based Lovells — made an announcement about associate salaries.

So what went down?

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It started with DLA Piper. After offering recession salaries to associates for a while under the guise of merit-based compensation, DLA relented earlier this month and restored the $160K base salary scale to its associates. Yesterday, WilmerHale announced that while it too is going forward with a merit-based compensation plan, it will be offering base salaries along the established $160K scale.

It seems that this little experiment of using merit-based compensation to undercut the market for base associate salaries is dying a quiet death. Today we have news that Akin Gump’s 2011 compensation model will once again include base salaries that match the market and are not tied to performance.

And even better, a tipster reports that all Akin Gump offices will be put on the New York market, $160K scale — which should represent a significant bump in salary for some associates…

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The heady days of the “mutual assured destruction” approach to associate compensation by Biglaw firms are behind us. But some associates would still like to see how they are doing in comparison to their colleagues at other firms. A tipster recently wrote us:

Can you do a post requesting commenters to post grade schedules a la greedyassociates back in the day showing salary per year. This would make comparisons easier. I’ll start:

Sheppard Mullin
1st year 145K
2nd 160
3rd 170
4th 185
5th 210
6th 225
then it gets vague with a range from 240-265K.

Some of this information is available in the firm profiles on the Above the Law Career Center. But as good greedy Sheppard-ite must know, comparing salaries is much more complicated these days due to some firms instituting merit-based compensation models.

WilmerHale is one of those firms. Yesterday, Wilmer released its projected salary structure for 2011. We’ll see if it’s a merit-based market leader…

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It’s been a long, below-market salary road for DLA Piper associates. For over a year now, DLA has been screwing around with associate salaries. Yesterday the firm announced that it would be moving back to a $160K salary scale — at least in New York — by 2011. (If you know of other firms that are finally moving back to $160K, don’t forget to send us an email.)

It’s taken DLA a long time to get back here. Back in May 2009, DLA cut associates salaries by 20%. That was ten percent more than other firms were cutting, and after a time DLA restored ten percent of the initial 20% cut.

But DLA wasn’t done, and a couple of months later, DLA associate salaries were back on the chopping block…

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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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