Associate Pay Changes
November 1st, 2007 by Jim Cotterman
Law.com had a good article (Midsize Firms Go For Big Changes) regarding how law firms work through the difficult issues of associate pay. Realize that the definition of ”mid-size” is very much market dependent. Yet many firms are grappling with recruiting and retaining young lawyers in a fiercely competitive market (at least for the better graduates from the better schools). The market leaders continue to push to find where the market will segment. $145,000 for first years did not do it, and neither did $160,000 — will $180,000? $200,000? And that is just salaries — layer on a signing bonus, year-end bonus, fringe benefits and employer mandated benefits to see the entire picture. These “mid-size” firms are balancing competitive pay, client concerns over value, partner concerns over investment (profits) and associate concerns over lifestyle. More changes are likely as the market sorts out growing demand against a relatively fixed annual supply of US trained lawyers.
The word on the street is that the year over year increases are staggering and that compression is rampant — or is it? A quick look at NALP data for April 1st 2007 and 2006, even allowing for sampling error yields a mixed view. See the table:
There is a mixed result. Inflation for the period was 2.6%. Some increases clearly resulted in real dollar gains year over year; while others did not. And the change in spread (a measure of compression) indicated an equally mixed result with smaller firms doing quite nicely in this regard.
This entry was posted on Thursday, November 1st, 2007 at 11:15 am and is filed under Economics, Associate compensation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.