Recently, there has been some interesting news about lawyer compensation. First, the Biglaw salary wars have started again with a few firms offering first-year associates $190,000 per year, with others likely to follow the bandwagon. But there are enough people covering that. So I want to focus on a recent survey which revealed that solo practitioners and small-firm partners earned an average of $198,000 annually. When someone shared this survey with our lawyers group, some of us wondered who these firms were and whether they were hiring.
This survey was conducted by Martindale Legal Marketing Services. They interviewed over 7,800 attorneys from more than two dozen practice areas and focused on the answers of 6,900 attorneys who work full-time. This is the first of an annual survey, so we’ll see more of these in the future.
While I want to commend Martindale for conducting the survey, which I assume took a lot of time and resources to do, I tend to look at surveys of solos and small firms with a high degree of skepticism. Especially when it comes to compensation.
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Why? Because there are so many variances in the small-law world. Some lawyers make millions, while others make less than minimum wage or even lose money every year. Also, many of those who make higher incomes tend to live in areas with a higher cost of living. This may mean that the lawyer who lives in a rural area is doing better financially despite earning slightly less than his urban counterpart.
Also, Martindale got in touch with the 7,800 attorneys through an online survey collection site. The problem with this method is the same problem law schools have when trying to collect post-graduate employment data. The people who are doing well financially are more likely to respond. And the people who are not doing well are likely to exaggerate their income or not participate at all. It’s like trying to invite everyone back to a high school reunion.
Finally, compensation does not correlate with happiness or work-life balance. Someone making above average salaries are also likely to have above average working hours. On the other hand, someone making less money might have more flexibility.
Martindale does try to address the discrepancies by giving additional detailed data. Intellectual property attorneys earn the most, at $240,000 per year. Personal injury and employment attorneys also have high incomes but they may also run volume practices where they represent many small-case clients on contingency. Immigration and criminal defense attorneys earned the least. The survey also notes that lawyers in California, Hawaii, and Alaska earn the most, although two of the states have some of the highest living expenses in the country. The data also shows how lawyers bill, the amount of time spent with clients, and the time spent doing other work. Unfortunately, the survey also shows that there is a gender pay gap.
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I think all of the above is important because the less-honorable law schools will use this survey to try to sell solo practice to students who are unable to find jobs. They will be told if they network, work hard, and are persistent, then they too can earn $198,000 per year. While this can be true, there are other uncontrollable factors that will determine whether a law firm will be successful. There should be visible disclaimers that warn law students that solo practice is not a panacea.
And for those who are already practicing, they will use the survey results to compare themselves to others. It’s fine to compare yourself if it will help you find and address any bottlenecks in your practice, but make sure you are comparing apples to apples grown in the same forest. If you run a criminal-defense practice, you have to compare themselves with other criminal-defense attorneys.
The Martindale solo and small-firm compensation survey is a comprehensive one. But the methodology does not completely address the wide variances of pay in the world of small law. Hopefully, their future surveys will be more detailed and relevant. Until then, it’s worth a read, but only for the same reason why people watch professional wrestling: for the entertainment value.
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 [email protected] and via Twitter: @ShanonAchimalbe.