Were Those Really Raises?

From the outside, the pay for attorneys can often seem exorbitant. Here are a few reasons why it's really not.

Michael Allen

Ed. note: This is the latest installment in a series of posts from Lateral Link’s team of expert contributors. Michael Allen is the CEO of Lateral Link. He is based in the Los Angeles office and focuses exclusively on Partner and General Counsel placements for top firms and companies. Prior to founding Lateral Link in 2006, he worked as an attorney at both Gibson, Dunn & Crutcher LLP and Irell & Manella LLP. Michael graduated summa cum laude from the University of California, San Diego before earning his JD, cum laude, from Harvard Law School.

While Biglaw associates continue to celebrate the increase of salaries for the third time in 10 years, the reality is these base salaries are actually lower than the standard Simpson Thacher set in early 2007, when adjusted for inflation. $160,000 in 2007 is actually equivalent to $199,000 today.

New York associates in particular are feeling the pinch as the cost of living continues to balloon. Ranked the 13th most expensive city to live, the 136 tons of copper and steel, public park larger than the principality of Monaco, and 68 combined miles of towering steel skyscrapers that make up New York are working hard to justify the exorbitant cost of living to Manhattan associates.

If the raises below inflationary rates weren’t bad enough for New York attorneys, firms matching the salaries in most of their major U.S. offices are impelling New York associates to search for greener pastures. While in the past, New York associates were typically compensated at the top of the market due to living in one of the most prohibitively expensive metro areas in the world, associates across the country have reaped the benefits of these raises both now and when the market was set in 2014.

The question many New York attorneys ask themselves is, “If not New York, then where?”

Many of these major legal markets clock in at half the cost of living as New York. Associates in Houston, Dallas, and Seattle are especially enjoying the new salary hikes that have spread there as Texas and Washington have no income tax.

Unsurprisingly, real estate is the real culprit for these cost of living differences. With the average rent for a one bedroom hovering above $4,000 in Manhattan, associates are spending a large chunk of their take home just on rent — around 40 percent for first years. Even in the notoriously grueling real estate market in Los Angeles, $4,000 may just get you a starter house or a luxurious and spacious apartment.

The continuous influx of tech and the continued growth of native blue chip firms parallels the development of L.A.’s downtown development as it chases after New York’s title of premier legal market. It won’t surpass it anytime soon, given the amount of wealth being generated by banks and funds on Wall Street, but the gap continues to close. The greatest barrier to entry is the California Bar exam, notoriously the most difficult in the country. However, passing it gains you entry to not just one, but four major legal markets — L.A., San Francisco, San Diego, and Silicon Valley. Lateraling from one of these cities to another is much easier than lateraling across state lines, especially given that firms that have footholds in Los Angeles almost always have offices in San Francisco and often San Diego and Silicon Valley as well. L.A. has a reputation as a laid-back city, and while expectations are still high and partners are competitive for clients, the atmosphere is less intense than its New York peers.

San Francisco has a legal market which has many similarities to NYC, both in terms of practice areas and sophistication of work. San Francisco services high-level deals, but increasingly its clients are mostly tech companies and startups. Bonuses among several prominent California firms have historically run a bit lower compared to New York. As the tech boom brings more entrepreneurs into San Francisco, the city is rivaling New York real estate prices. Overall, San Francisco is the closest of these cities in terms of cost of living. Aspiring partners will appreciate the sophistication of the work which yields massive dividends once your pay switches to the origination and profit sharing model partners enjoy.

For attorneys looking to stay on the east coast, D.C. can be another viable opportunity. Relocating attorneys appreciate the D.C. bar waiver rules. Unlike many jurisdictions, you can apply to waive in even as a junior associate, if you meet MBE and MPRE requirements and pass the character and fitness investigation. The federal government shapes the types of practices based in D.C. Most of the highest-rated regulatory practices are based there because of proximity to the agencies, and appellate teams are expected to have a strong presence there. The government also offers excellent exit opportunities for attorneys who decide to leave private practice.

Additionally, for associates across the U.S., tuition increases continue to erode their take home pay. Even when accounting for inflation, tuition rose by nearly 43 percent for private law schools from 2007 to 2017 and 70 percent for public schools. Compounded by this double-digit inflation, the challenge to new grads to both pay their loans and flourish in all markets can be onerous.

From the outside, the pay for attorneys can often seem exorbitant. However, when accounting for the continually rising costs of law school, and the uncertainty of partnership prospects, the pay looks much more reasonable in comparison. Many attorneys will earn the most they ever will as a Biglaw associate, especially if they reach the end of their associate runway without a plan. Many attorneys end up in the wrong city for their practice and personality. Not everyone is meant to thrive in the pressure cooker of New York; not everyone appreciates the frigid summers in San Francisco. Law firms have offices in all major cities, and with the newest round of raises spreading to most major cities — and proportionality lifting ancillary legal market salaries — now is the opportune time to move your practice to the place that is going to help your career and life, long-term. Feel free to reach out to our team at Lateral Link if you have any questions or would like help relocating your practice.


Lateral Link is one of the top-rated international legal recruiting firms. With over 14 offices world-wide, Lateral Link specializes in placing attorneys at the most prestigious law firms and companies in the world. Managed by former practicing attorneys from top law schools, Lateral Link has a tradition of hiring lawyers to execute the lateral leaps of practicing attorneys. Click here to find out more about us.


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