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Preparing for China

News Update

In more bad news for associates, median starting pay at the largest firms in many cities has hit a peak of $130,000, down from an average of $160,000 in the past few years, a new survey has found.

The National Association for Law Placement Inc. said in its 2009 Associate Salary Survey, released Thursday, that the $130,000 salary mark reflects “what is likely to be the apogee of large firm salaries for the foreseeable future and represents the culmination of increases since 2006.”

According to NALP – an association for legal career professionals – while the overall median starting salary for associates was $130,000, it ranged from $70,000 in firms of two to 25 lawyers, to $135,000 in firms of 501 to 1,000 lawyers, up to $160,000 in firms of more than 1,000 lawyers.

Most medians in firms of 500 or fewer lawyers were “fairly stable” compared with 2008, the association said.

The report collected salary information from a total of 642 offices as of April 1, before many law firms that were paying the prevailing $160,000 per year began to slash associates' paychecks.

Fourteen percent of respondents represented firms of 50 or fewer lawyers, while 42 percent represented firms of more than 500 lawyers, NALP said.

Not surprisingly, each year of associate experience brings several thousand dollars in increased compensation, the report found, with median salaries for eighth-year associates ranging from $111,625 in small firms to $258,000 in the largest firms and a median for all reporting firms of $171,275.

NALP added that its analysis of 29 individual cities and other states and regions revealed a wide range of law firm compensation.

For example, it said, the median salary for first-year associates in all firms of more than 250 lawyers was highest in the West, at $160,000, followed by $145,000 in the Northeast and the South and $117,500 in the Midwest.

The highest first-year salary reported was $165,000, the report found.

Contrasts between large and smaller metropolitan areas also were evident, NALP said, with the prevailing salary in firms of more than 250 lawyers in large metropolitan areas of more than 5 million standing at $160,000 as compared with $100,000 in metropolitan areas of fewer than 1.5 million.

In addition, intellectual property junior associates generally commanded salaries that were as much as $15,000 to $20,000 higher as compared to their non-IP peers, the association said. That differential was even larger among more senior associates, NALP said.

Salaries for staff attorneys typically were just over $100,000 per year, while the median hourly salaries for law clerks ranged from $19 per hour to $50 per hour depending on firm size, the report said.

The survey also examined bonus systems at participating firms and the prevalence and size of bonuses for prior judicial clerks, and found that about 68 percent of firms use discretion as a factor to determine eligibility for bonuses.

About 35 percent use “meeting fixed goals” as a determinant of eligibility, although firms of more than 1,000 lawyers are most likely to do so, NALP said.

Bonus amounts were based on various factors, the most common of which was billable hours, followed by merit and discretion, according to the association.

Nearly all the firms of more than 1,000 lawyers reported paying a bonus to prior judicial clerks, NALP said, while relatively few smaller firms did so.

Bonuses of $10,000 to $25,000 were most typical, according to the report.

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