NALP Bulletin, June 2017

NALP's new 2017 Associate Salary Survey report shows that the overall median first-year salary as of January 1, 2017, was $135,000, the same as in 2015, the year of the most recent previous survey — with both survey years reflecting response pools in which offices in firms of 251+ lawyers accounted for about 70% of responses. The median for firms of 501-700 lawyers was $160,000 as of January 1 of this year, compared with $125,000 in 2015; the median in firms of 701+ lawyers was $155,000 this year, compared with $145,000 in 2015. The full 2017 Associate Salary Survey is now available in NALP's bookstore.

But wait. What about all those $180,000 first-year salaries that were announced over the course of several months in 2016? The short answer is that among the more than 500 survey respondents there were not nearly enough offices reporting a $180,000 salary to push the median up to that level. While some of these findings can be counterintuitive, or may even seem nonsensical, the data suggest that as more law firms have grown through acquisition and merger, the largest law firms are not as similar to one another as they used to be. In addition to elite global law firms, there are many firms with more than 700 lawyers that are made up of many smaller regional offices, many of which don't pay the new benchmark first-year salary of $180,000, and, as a result, a large percentage of large law firm starting salaries fall below that mark.

As Table 1 shows, just over one-quarter of responding offices reported $180,000 as the average first-year salary. Even in firms of more than 250 lawyers, the majority of responding offices did not report $180,000. Of course, it must be noted that not all offices now at the $180,000 mark for first-years participated in the survey, but neither did any number of offices paying other lower amounts. So, it remains the case that many firms are not paying first-years $180,000.

That said, it is not surprising that offices paying $180,000 are mostly in a few cities. As Table 2 shows, almost half of the offices reporting this amount are in New York, the Los Angeles/Orange County area, or Washington, DC/Northern VA. An additional 16% are in Northern California.

As a third perspective, the majority of offices responding from some cities or geographic markets now have a $180,000 starting salary. As Table 3 shows, these cities or markets include New York, San Francisco, San Jose, Boston, Dallas, Southern California, Houston, and Washington, DC. In some areas, such as Denver, South Florida, and Phoenix, no offices reported a $180,000 first-year salary.

Finally, a look back at the advent of the $160,000 salaries starting in 2007 shows that the prevalence of the recent changes is not all that different from what happened with the introduction of $160,000 salaries. At the time of the 2007 survey, collected as of April 1 of that year just as the move to $160,000 was starting, fewer than 10% of survey respondents reported a first-year salary of $160,000. By 2008, the percentage stood at 22%, and in 2009, the previous high-water mark in salaries, 29% of offices reported a $160,000 starting salary. The recent moves may have come at a quicker pace, but at least at this point, the extent of the increase is not all that different from what happened starting in 2007.

Table 1. Distribution of Salaries Reported by Firm Size

Note: The salaries reported in this table are those that accounted for 3% or more of reported salaries.

Table 2. Distribution of Reported $180,000 Salaries

Note: A total of 123 offices reported $180,000 as the first-year average salary. In addition to the cities listed, nine additional cities each had one office reporting a $180,000 first-year salary, collectively accounting for about 7% of the reported $180,000 salaries.

Table 3. Percentage of Offices Reporting $180,000 as Their First-year Salary in Selected Cities

Note: The cities in this table each reported at least eight first-year average salaries.