NALP Bulletin, October 2014
This marks the 20th year of NALP’s publication of the Associate Salary Survey. The survey reports on salaries for first- through eighth-year associates, but the focus of this article is on what two decades of data tell us about starting salaries for law graduates going into private practice and about how these salaries have changed.
Over the past 20 years law firms of all sizes have increased their first-year salaries, but the percentage increase at the largest firms is double that of the smallest firms, even though not all large firms pay a $160,000 starting salary, even in large markets, as evidenced by the $135,000 median for these firms as a whole.
When comparing medians from year to year, one must remember that the respondent pool varied from year to year. In other words, each year’s medians reflect only firms responding in that year, rather than representing medians for a static set of firms. This is particularly true for firms with 251 or more lawyers — a size category that has grown considerably over the past 20 years and that encompasses a wide variety of firms and offices in markets both large and small. This wide spectrum notwithstanding, figures for this category provide general trend information that can be carried through the entire time span of this survey, and one that is less affected by differences in how these firms are distributed across more granular size categorizations. It is also difficult to make generalizations even for more discrete sets of firms. For example, not all firms of more than 700 lawyers pay $160,000 to start, even in the largest markets, and not all firms that pay $160,000 are firms of more than 700 lawyers.
Salary medians in the four largest employment markets are shown in Table 2. It is evident that New York was the first market to reach the $160,000 mark in 2007, and the only one to stay consistently at that level. Recent fluctuations notwithstanding, salaries in all these markets except New York have at least doubled. Salaries in New York have not doubled because the median was considerably higher than in the other three markets in 1995.
Finally, the figures also suggest that this 20-year time period can be divided into three segments: the period prior to 2000 and before the run-up to $125,000 starting salaries in large firms; a period of a half-dozen years where that level was sustained; and then a period starting in 2007 and continuing to the present during which many large firms in large markets moved to a $160,000 starting salary. Associate Salary Survey findings indicate that 2006 appears to be something of a transition year.
Table 1. Median Starting Salaries for First-Year Associates by Firm Size
|Year||FIRM SIZE (Number of Lawyers)|
|2-10||11-25||26-50||51-100||101-250||251 or More|
|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|
|2008||— 73,000 —||92,500||95,000||110,000||135,000|
|2009||— 70,000 —||92,500||104,000||110,000||145,000|
|2010||— 72,000 —||95,000||95,000||105,000||130,000|
|2011||— 73,000 —||86,000||91,000||110,000||130,000|
|2012||— 70,750 —||90,000||100,000||110,000||135,000|
|2013||— 78,000 —||110,000||100,000||110,000||145,000|
|2014**||— 68,000 —||105,000||110,000||105,000||135,000|
|% change 1995-2014||— 51% —||110%||85%||79%||93%|
Note: From 1999 on, a single figure was compiled for the 2-25 size category. Salaries were reported as of April 1, except in 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 mostly a result of variation in the respondent pool from year to year, particularly in the largest size category, which has grown considerably over the life of the Associate Salary Survey. However, starting in 2009, some firms in some markets reduced salaries.
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, DC|
|% change 1995-2014||109%**||107%||88%||120%|
** Change from 1997-2014.
Note: Salaries reported as of April 1, except 1996-1998. Because salary levels in these cities tend to cluster at one or two figures, the medians shown often reflect a prevailing or most commonly reported salary, or even the highest salary.