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How Much Do Law Firms Pay New Associates? A 12-year Retrospective as Reported by Firms

NALP Bulletin, October 2007 

Tables 1 and 2 provide a 12-year overview of law firm starting salaries, based on NALP's annual Associate Salary Survey. The figures in these tables thus reflect salary figures reported by law firms, rather than salaries reported by law school graduates obtaining jobs in private practice. (Salary figures reported by graduates were the topic of the September 2007 NALP Bulletin article "What Do New Lawyers Earn? A 15-year Retrospective as Reported by Law School Graduates.")

It is evident that, in the last 12 years, law firms of all sizes have increased their first-year salaries, with salaries nearly doubling in the largest firms. In the largest firms in the largest employment markets for new law graduates, salaries have doubled, or nearly doubled, after a five-year period of $125,000 salaries. (See Table 2.)

In contrast, salaries in other sectors have increased, but at nowhere near a rate to match salary increases in law firms. Although long-term trend information on salaries from public sector employers is not available, salaries reported by graduates taking jobs with these employers suggest increases of about one-third. (See Table 3.)

Another Perspective on Salaries . . .

Commentary written on behalf of the NALP Research Advisory Group by Andrew Chapin, Director of Public Interest Scholars & Counseling at Fordham Law. Statistics on debt were gathered with the assistance of Access Group.

It's common knowledge that public sector lawyers are grossly underpaid when their salaries are compared to first-year associates in private law firms of 251 or more lawyers. Unsurprisingly, other first-year attorney salaries also seem by comparison to constitute underpayment.

The figures in the tables on the opposite page reveal that first-year prosecutors are paid roughly 67% of the salary of lawyers at the smallest private law firms, while first-year legal services attorneys are paid roughly 56% of same. It is only when comparing the median 2006 income for US families ($48,201 according to the Census Bureau) that public sector attorney entry-level salaries begin to compare more favorably.

As a law school career counselor, my question goes to quality of life, which includes the "live-ability" of these public interest salaries when students have law school debt to pay and no Loan Repayment Assistance Program or other resource to help them afford their public interest career.

Economists recommend that debt repayment be no more than 15% of one's gross annual income. Therefore, at a first-year judicial clerk or prosecutor's salary of $46,500, an attorney has only $581 monthly available for debt repayment, and at a first-year legal services salary of $38,000, an attorney has only $475 available.

Doing the numbers, this means that judicial clerks and prosecutors can reasonably afford their careers if their debt is no more than $50,300 if consolidated for 10 years of repayment, no more than $75,700 if consolidated for 20 years, and no more than $88,400 if consolidated for 30 years, figured at an interest rate of 6.8%.

For legal services attorneys the debt limits are less: no more than $41,100 if consolidated for 10 years, no more than $61,800 if consolidated for 20 years, and no more than $72,300 if consolidated for 30 years.

As average law school debt loads have been recently reported at over $80,000 for private law school students and over $54,000 for public law school students, the long-term debt burden placed upon public interest minded law students is very apparent.

 

Table 1. Median Starting Salaries for First-Year Associates by Firm Size


Firm Size — Number of Lawyers
2-10 11-25 26-50 51-100 101-250 251 or more
1996 $35,000 $41,500 $52,000 $58,500 $60,000 $70,000
1997 40,000 52,000 50,000 60,000 65,000 71,500
1998 39,500 52,000 53,000 61,000 60,000 75,000
1999 — 51,000 — 57,500 67,000 70,000 85,000
2000 — 60,000 — 63,000 70,000 75,000 110,500
2001 — 60,000 — 70,500 75,900 90,000 110,200
2002 — 53,500 — 75,000 75,000 90,000 110,000
2003 — 59,000 — 71,000 80,000 85,000 107,000
2004 — 65,000 — 72,900 81,000 88,500 110,000
2005 — 67,500 — 80,000 83,000 86,000 110,000
2006 — 67,000 — 80,000 85,000 90,000 120,000
2007 — 68,000 — 81,000 90,000 105,000 130,000
% change 1996-2007 — 33%* — 56% 54% 75% 86%

* % change from 1999-2007.
Note: From 1999 on, a single figure was compiled for the 2-25 size category. Salaries reported as of April 1, except 1996-1998. Medians for each size range are based on firms in that size range responding to the survey for the year specified. Some medians appear to decline; this is a result of a different pool of respondents in each year rather than a decrease in salaries on the part of any one firm.

Table 2. Median Starting Salaries for First-Year Associates in Firms of 251 or More Lawyers — Chicago, Los Angeles, New York, and Washington, DC


Chicago Los Angeles New York Washington
1996 NA $75,000 $85,000 $72,500
1997 73,000 80,000 87,000 74,000
1998 80,000 82,500 87,500 80,000
1999 90,000 92,000 96,000 91,000
2000 117,500 125,000 125,000 114,050
2001 125,000 125,000 125,000 125,000
2002 125,000 125,000 125,000 120,000
2003 125,000 125,000 125,000 120,000
2004 125,000 125,000 125,000 120,000
2005 125,000 125,000 125,000 125,000
2006 132,500 135,000 145,000 135,000
2007 145,000 145,000 160,000 145,000
% change 1996-2007 99% * 93% 88% 100%

* Change from 1997 - 2007.
Note: Salaries reported as of April 1, except 1996-1998. Medians are based on firms responding to the survey for the year specified. Some medians appear to decline; this is a result of a different pool of respondents in each year rather than a decrease in salaries on the part of any one firm.

Table 3. Median Starting Salaries for Selected Non-Firm Lawyer Jobs


Prosecutors Judicial Clerks Legal Services
1996 $33,000 $35,000 $30,000
2006 $46,000 $46,500 38,000
% change 1996-2006 39% 33% 27%

Note: Figures are based on salaries reported by graduates on NALP's graduate employment survey for these two classes.



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