Entry-Level Associate Salaries Escalate Dramatically
09-02-1998

The National Association for Law Placement has completed its fourth comprehensive survey of associate compensation with the 1998 Associate Salary Survey report. Over 700 firms (nearly one- third of which had 50 or fewer attorneys) provided salary information as of January 1, 1998. Because of the rapidly changing market, a supplemental survey of the larger firms was conducted in August 1998 to compile the most current information on base salaries for Class of 1998 associates.

The median salary for first-year Class of 1997 associates as of January 1, 1998 ranged from $39,500 in firms of 2-10 attorneys to $75,000 in firms of 251 attorneys or more, with a first-year median for all participating firms of $65,000. By August of 1998, the supplemental survey revealed that base salaries for incoming associates ranged from $46,000 to $110,000, with a median of $72,500.

In large firms of 251 or more attorneys, the median first year salary has climbed from $70,000 in 1996 to $85,000 in August 1998.

As expected, each year of associate experience brings several thousand dollars in increased compensation: median salaries for eighth-year associates ranged from $85,000 in small firms to $113,500 in large firms, with a median for all participating firms of $95,000.

The volume of data allowed analyses for 35 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 Class of 1997 associates in all firms of over 251 attorneys in the Northeast was $76,500, with reported salaries ranging from $55,000 to $101,000. For firms of 251 or more in the West, the median first-year salary was $80,000, with reported salaries ranging from $53,000 to $98,000. In comparison, while a new associate in a large firm in Los Angeles might earn in excess of $80,000, the median salary for a new associate in Phoenix, Arizona was $60,000. Contrasts between large cities and smaller metropolitan areas are also evident. For example, the median salary for a third-year associate in New York City was $102,000; for firms reporting from other areas of New York State, the median was $61,000.

The survey also reports the aggregate compensation and bonus systems at participating firms, including new information on the prevalence and size of bonuses for prior judicial clerks. Aggregate compensation includes bonuses in addition to base pay. For first- year associates aggregate compensation ranged from $33,187 to $122,850 nationwide. Among the findings regarding bonus systems: 50.6% of firms use a discretionary basis as one means of determining eligibility for bonuses. Two-thirds of firms of 2-10 do so, compared with 45.8% of firms of 251 or more attorneys. Many firms (44.5%) use "meeting fixed goals" as a determinate of eligibility, and for this factor the frequency is reversed — 30.3% of small firms consider this factor, while 53.7% of the largest firms do so. Bonus amounts were based on various factors, the most common of which were merit/performance (68.2% of offices offering associates bonuses), billable hours (51.6%), and discretion (42.9%). About one-quarter of the firms reported paying a bonus to prior judicial clerks, with large firms most likely to offer bonuses. Bonuses of $5,000-$10,000 were most typical.

Median Starting Salaries by Associate Year and Firm Size
(as of January 1, 1998)

Associate Year All sizes 2 - 10 11 - 25 26 - 50 51 - 100 101 - 250 251-more
First 65,000 (608) 39,500 (16) 52,000 (46) 53,000 (91) 61,000 (101) 60,000 (141) 75,000 (207)
Second 67,000 (586) 41,000 (14) 55,000 (47) 56,000 (94) 64,500 (101) 65,000 (126) 75,000 (200)
Third 71,743 (578) 56,250 (12) 57,000 (43) 61,000 (92) 67,750 (94) 67,500 (125) 82,000 (207)
Fourth 75,125 (576) 55,000 (8) 60,000 (40) 66,400 (91) 72,000 (99) 71,360 (129) 90,000 (204)
Fifth 80,000 (562) 52,500 (12) 71,750 (36) 70,000 (83) 76,000 (96) 75,000 (130) 90,000 (201)
Sixth 85,000 (539) 70,000 (10) 70,750 (32) 74,500 (76) 79,875 (91) 80,000 (124) 100,000 (202)
Seventh 90,000 (461) 58,000 (5) 77,705 (30) 77,375 (54) 83,000 (80) 83,000 (111) 105,000 (179)
Eighth 95,000 (412) 85,000 (7) 88,000 (30) 82,500 (59) 89,000 (66) 86,920 (87) 113,500 (159)
First-year summer 1,100 (379) 520 (6) 900 (29) 900 (48) 1,000 (63) 1,100 (102) 1,250 (131)
Second-year summer 1,100 (527) 440 (7) 1,000 (42) 956 (84) 1,013 (82) 1,100 (130) 1,250 (179)
Third-year summer 1,150 (261) 465 (6) 1,000 (19) 925 (32) 1,100 (28) 1,000 (59) 1,400 (116)
Note: Figures in parentheses indicate the number of offices reporting.

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