A Biglaw Behemoth's Weak-Sauce Raise
First-year associates get $180K, but only in certain offices; pay for more-senior associates remains TBD; and the raise doesn't happen until September.
When Cravath announced its new salary scale two weeks ago today, I predicted that some firms might get cute on the “matching.” I wrote, “Expect some firms to adopt that $180,000 starting salary, so they can give the impression of keeping up with the Cravathians, but then pull the trick of salary compression (i.e., tiny pay increases for more-senior associates).”
Most of the salary news we’ve covered so far has involved a complete or near-complete match of the Cravath scale (with occasional cases of senior associate compensation getting capped). But the latest announcement, from the tenth-largest firm ranked by U.S. lawyer headcount, sounds like it falls well short of a “true” match.
Here are the key aspects of the pay raise just announced by K&L Gates (full memo on the next page):
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1. First-year associate salaries in ten offices — Boston, New York, Washington D.C., Chicago, Dallas, Houston, San Francisco, Palo Alto, Los Angeles, and Orange County — are going from $160,000 to $180,000.
2. Salaries for second- through eighth-year associates in these ten lucky markets will also go up, but “the amounts of those increases are still being determined,” based on market conditions and individual performance. (One source called this move “typical” for K&L Gates.)
3. Several big offices are not included in the raise. They include Pittsburgh, where legacy firm Kirkpatrick & Lockhart got its start, and Seattle, where legacy firm Preston Gates was launched. Compensation in these other cities is under review, and “any additional increases [will be announced] shortly.”
4. The raise isn’t going into effect on July 1, the date set by Cravath and followed almost universally by other firms; instead, it will go into effect on September 19, “the arrival date of most of our incoming first-year associates.” That’s almost three months later than the rest of Biglaw. K&L Gates is famously conservative on its finances, but c’mon, partners — a timely raise could have been funded quite easily from the nine-figure fee from the Carnegie Mellon settlement.
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So this isn’t the greatest raise ever. But given that PPP at K&L Gates is only $870,000, which puts it at #84 in the Am Law 100, and given that the firm has been losing partners to better-paying competitors at a decent clip this year, K&L associates might not have huge cause for complaint. (Those associates seeking better comp can, of course, follow the example of partners and lateral right out of the K&L Gates.)
We are covering Biglaw pay raises closely, so please drop us a line — text (646-820-8477) or email (subject line: “[Firm Name] Matches Cravath”) — when you know of another firm making a compensation move. Please include the memo if available. You can take a photo of the memo and send it via text or email if you don’t want to forward the original PDF or Word file. All sources are kept strictly confidential.
David Lat is the founder and managing editor of Above the Law and the author of Supreme Ambitions: A Novel. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at [email protected].
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