Salaries for New Lawyers: How Did We Get Here?

NALP Bulletin, January 2008 

The range of salaries earned by new law school graduates has been well known and documented for many years. Even as students and the media have tended to focus on the high end of the scale, career services offices have seen and conveyed the broader picture. NALP's annual graduate employment survey documents this salary picture in many ways each year.

Earlier this year, NALP literally depicted salary information with a picture — a picture which shows very clearly that the salary distribution for Class of 2006 law graduates has two distinct peaks, one in the $45,000 to $55,000 range, and one in the $135,000 to $145,000 range. (See "A Picture Worth 1,000 Words".) The full range of salaries spanned from less than $20,000 to over $200,000. Although such a range of salaries is nothing new, the doubled-peaked characteristic is a more recent development.

Look for example, at the Class of 1991, with salaries ranging from about $10,000 to about $200,000. Though hardly a normal "bell-shaped" curve, it shows some resemblance to one, with a big clustering of salaries (about 40% of salaries reported) in the $30,000 to $40,000 range, and just 6% of salaries at $70,000, the median in big law firms at the time.

As the 1990s progressed, the curve maintained its basic shape, though salary increases at large firms gradually moved more of the salaries to the right of the $70,000 mark. In 1996, salaries of $75,000 and $85,000 became more common than salaries of $70,000, but $75,000 and $85,000 still each represented just 6% of salaries, and 45% of salaries were in the $30,000 to $40,000 range.

In 1998 and 1999, the marker again moved to the right, to $90,000, and about 6% of salaries. This corresponds with a period of salary increases, moving the median at firms of 251+ lawyers from $72,000 in 1995 to over $90,000 in 1999. (For more details on law firm salaries see "What Do New Lawyers Earn? A 15-year Retrospective as Reported by Law School Graduates" from the September 2007 NALP Bulletin.) The shift notwithstanding, the overall distribution maintained the basic, though lopsided bell shape.

That shape changed dramatically in 2000 as large firms increased their starting salaries to $125,000. Beyond just the amount of the increase, of more consequence for the salary distribution was how widespread the increase was. Suddenly, nearly 14% of salaries were reported at $125,000, a proportion that can only be partially explained by an increasing percentage of jobs taken in large firms. The result was, for the first time, two peaks, with the other encompassing the $30,000 to $50,000 range. Thus, even though the peak to the left was now fatter and accounted for more salaries — 48% versus the 14% at $125,000 — never before had a single salary so dominated the landscape. The $125,000 peak remained through 2005.

By 2006, the $125,000 peak had disappeared, replaced by two smaller yet very distinct peaks at $135,000 and $145,000, which together accounted for 17% of salaries. At the same time, salaries in the left-hand peak, now between $40,000 and $60,000, are still more common (44%). As more large firms move to $160,000, the pattern for the Class of 2007 will no doubt continue to exhibit two peaks, with the second peak moving farther to the right, even as the first peak moves only slightly, and perhaps shrinks even more.

 

Distribution of Full-Time Salaries — Class of 1991


Note: Graph is based on 16,323, salaries — for clarity, salaires above 200,000 are excluded from the graph, but not the percentage calculations shows on the y-axis.

 

Distribution of Full-Time Salaries — Class of 1996


Note: Graph is based on 18,501 salaries — for clarity, salaries above 200,000 are excluded from the graph, but not the percentage calculations shown on the y-axis.

 

Distribution of Full-Time Salaries — Class of 2000


Note: Graph is based on 21,642 salaries — for clarity, salaries above 200,000 are excluded from the graph, but not the percentage calculations shown on the y-axis.

 

Distribution of Full-Time Salaries — Class of 2006


Note: Graph is based on 22,884 salaries — for clarity, salaries above 200,000 are excluded from the graph, but not the percentage calculations shown on the y-axis.

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