NALP Survey Details Private Practice Compensation Ranges

NALP announces publication of its annual comprehensive survey of associate compensation, the 2005 Associate Salary Survey report. A total of 573 offices provided salary information as of April 1, 2005. With 17% of respondents representing firms of 50 or fewer lawyers and 30% representing firms of more than 500 lawyers, the survey report sheds valuable light on the breadth of salary differentials among employers of varying sizes.

The median salary for first-year associates ranged from $67,500 in firms of 2-25 attorneys to $125,000 in firms of more than 500 lawyers, with a first-year median for all participating firms of $100,000. A comparison with figures reported for the prior five years reveals that first-year salaries have remained stable in firms of 251 or more lawyers during this period, with a median of about $110,000. This is in sharp contrast to a 30% increase in the median from April 1999 to April 2000. In some major cities, such as Los Angeles and New York City, as well as the Silicon Valley area, the prevailing salary of $125,000 for first-year associates in large firms has remained unchanged since April 2000. Similar salary stability was last experienced a decade ago in the mid-nineties.

As expected, each year of associate experience brings several thousand dollars in increased compensation: median salaries for eighth-year associates ranged from $109,000 in small firms to $181,500 in the largest firms, with a median for all reporting firms of $145,000.

The volume of data in this year’s survey allowed analyses for 31 individual cities as well as many additional states and regions not encompassed by those cities. These analyses reveal a wide range of law firm compensation. For example, the median salary for first-year associates in all firms of over 251 lawyers was highest in the Northeast, at $125,000, followed by $112,500 in the West, and $105,000 and $95,000 in the South and Midwest, respectively. The highest first-year salary reported was $130,000. The typical salary for first-year associates in large firms stood at $125,000 in a number of cities beyond New York — these include Boston, Chicago, Los Angeles, the San Francisco Bay area, and Washington, D.C. In contrast, medians in somewhat smaller metropolitan areas such as Cincinnati, Hartford, Indianapolis, Portland, OR, and Sacramento were in the mid to upper 80’s. Contrasts between large cities and smaller metropolitan areas within the same state are also evident. For example, in firms reporting from areas in California outside Los Angeles, San Diego, Sacramento, and San Francisco Bay area, the first-year median was $80,000.

The 2005 Associate Salary Survey also gathered data on salaries for intellectual property lawyers as well as general data on salary levels for staff attorneys and law clerks. Though data on salaries for intellectual property attorneys was more limited, it clearly suggests that IP lawyers command a salary that is $15,000 to $30,000 higher, with the larger differentials among more senior associates.

Additional findings show that salaries for staff attorneys are typically $88,000 per year, while the median hourly salaries for law clerks range from $23 to $40 per hour depending on firm size.

The survey also reports on bonus systems at participating firms and the prevalence and size of bonuses for prior judicial clerks. Among the findings on bonus systems: almost three-quarters of firms use discretion as a factor to determine eligibility for bonuses. Almost two-thirds of firms use “meeting fixed goals” as a determinant of eligibility, although firms of 101-250 lawyers and 251-500 lawyers are most likely to do so—74% and 84%, respectively. Bonus amounts were based on various factors, the most common of which were billable hours (74% of offices offering associate bonuses), merit (70%), and discretion (62%). Most (75%) of the largest firms of 501 or more lawyers reported paying a bonus to prior judicial clerks. Relatively few smaller firms did so. Bonuses of $10,000 - $15,000 were most typical.

More detailed results by city and region, including medians, averages, and ranges of base salaries for associates through the eighth year, as well as information on aggregate compensation for associates, and compensation structures, are found in the complete 2005 Associate Salary Survey.

Median Base Salaries by Associate Year and Firm Size (as of April 1, 2005)

Note: The # column indicates the number of employers reporting in each category.

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