Summary
The legal profession is making headlines this month with associate salary hikes across the country. With major firms announcing big changes to their compensation structure for first-year associates, many attorneys and firms alike are wondering what this means for them.This article examines the recent associate salary hikes, where they are happening, and the potential impacts that these changes could have on the legal industry.
The most significant salary hikes have been announced by the largest law firms. Prominent names like Skadden have increased their first-year associate salaries to $190,000. Cravath, the nation’s largest law firm, has also made major changes to its compensation structure, including a major salary increase to $180,000. Other prominent firms like Latham & Watkins, Jenner & Block, and Weil, Gotshal & Manges have all increased their first-year associate salaries to $190,000.
These salary hikes may have a significant impact on the legal profession. For the associates, this pay increase could bring financial relief and stability to the profession. Likewise, the firms can bring in higher-caliber talent and retain their best associates.
At the same time, others are wondering what this means for the industry as a whole. As the large firms increase their associate wages, smaller firms may also have to compensate their staff accordingly. This could lead to an increase in overhead and create an unlevel playing field between small and large firms.
Organizations like the ABA are already making moves to address this issue. The ABA has proposed an increase in the salary for first-year associates at smaller firms to bring the wages more in line with larger firms.
This article describes the associate salary hikes that have recently happened in the legal industry and discusses the potential impacts that these changes could have on the profession. Large firms have increased their first-year associate salaries up to $190,000, while the ABA is proposing an increase in salary for smaller firms. These changes could bring financial relief and stability to associates, while also creating an unlevel playing field between small and large firms.
Associate Salary Hike
Law firms across the US are giving their associates a salary bump. Law firms in large markets like New York and D.C. have been leading the way, but firms in other parts of the country are following suit.In February 2020, several New York firms made the decision to increase their associate salaries to match the salary increases granted by several of their competitors. Sullivan & Cromwell, Akin Gump, and Cravath all raised their pay scales, with Cravath leading the way by offering starting salaries at $190,000 for incoming associates.
The salary increases were quickly followed by other firms across the country, with firms in Los Angeles, San Francisco, and Chicago also jumping on board.
The associate salary hikes have been most pronounced in the larger markets, with firms in California, New York, and D.C. leading the way. However, firms in other parts of the country have followed suit, with many mid-sized and even small-market firms raising associate salaries.
The associate salary hikes are a result of a tighter labor market, where demand for skilled attorneys is increasing. In addition, it's also a result of competition between firms as they compete for top talent.
Naturally, bloggers have weighed in on what these salary increases mean. Eric Turkewitz of New York Personal Injury Blog views the recent increases as a wake-up call for increasing judicial pay, noting that at $160,000 a year plus bonus, first-year associate salaries surpass those of federal judges (who make $162,500 annually).
Peter Smith of Counsel to Counsel warns that the $160,000 salaries may be nice, but there is a catch:
No, it is not just "more hours." Associates and partners alike are already putting in "more hours." What this really signifies is that the "class" distinctions between lawyers are widening, and there will be no reversal of that trend....
