Entry-Level Associate Salaries Remain Stable in Large Firms (8/19/02)

NALP has completed its eighth annual comprehensive survey of associate compensation with the 2002 Associate Salary Survey report. Over 640 offices representing large and small firms alike (about 30% of responses were from firms of 50 or fewer attorneys, and one quarter were from firms of more than 500 attorneys) provided salary information as of April 1, 2002.

The median salary for first-year associates ranged from $53,500 in firms of 2-25 attorneys to $118,000 in firms of 500 attorneys or more, with a first-year median for all participating firms of $90,000. A comparison with figures reported as of April 2001 and April 2000 reveals that first-year salaries have remained stable in firms of 251 or more attorneys, with a median of about $110,000. This is in sharp contrast to a 30% increase in the median during this time period, from April 1999 to April 2000. In some major cities, such as Los Angeles, New York City, and the Silicon Valley area, the prevailing salary of $125,000 for first-year associates remained unchanged from April 2000.

As expected, each year of associate experience brings several thousand dollars in increased compensation: median salaries for eighth-year associates ranged from $92,500 in small firms to $180,000 in the largest firms, with a median for all participating firms of $127,500.

The volume of data allowed analyses for 33 individual cites 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 attorneys was highest in the West, at $125,000, followed by $120,000 in the Northeast and $105,000 and $95,000 in the South and Midwest respectively. The typical high salary reported was $135,000. The typical salary for first-year associates in large firms stood at $125,000 in a number of cities, not just New York, but also Chicago, Los Angeles, Orange County, CA, San Diego, San Francisco, the San Jose area, and Washington, D.C. In contrast, medians in Detroit, Hartford, and the West Palm Beach/Ft. Lauderdale area were in the $80,000-82,000 range. Contrasts between large cities and smaller metropolitan areas are also evident. For example, for firms reporting from areas of California (outside the Los Angeles, Orange County, CA, San Diego, San Francisco, the San Jose areas), the first-year median was $66,500.

More limited data on salaries for intellectual property attorneys suggest that IP attorneys command a premium of about $25,000 at the more junior level. Salaries for staff attorneys are typically $85,000 per year, while law clerks average $30 per hour.

The survey also reports on bonus systems at participating firms and the prevalence and size of bonuses for prior judicial clerks. Among the findings regarding bonus systems: about 71% of firms use a discretionary basis as one means of determining eligibility for bonuses. Many firms (63%) use "meeting fixed goals" as a determinant of eligibility — 42% of small firms consider this factor, while over 80% of the largest firms do so. Bonus amounts were based on various factors, the most common of which were merit/performance (71% of offices offering associate bonuses), billable hours (69%), and discretion (47%). Just over one fourth of the firms reported paying a bonus to prior judicial clerks, with large firms most likely to offer bonuses. Bonuses of $5,000-15,000 were most typical.

Median Base Salaires by Associate Year and Firm Size (as of April 1, 2002)

Associate Year FIRM SIZE — Number of Attorneys
2-25 26-50 51-100 101-250 251-500 501 or More All Sizes
First $53,500 $75,000 $75,000 $90,000 $97,500 $118,000 $90,000
Second 63,000 76,750 78,000 93,000 103,000 123,000 94,000
Third 66,250 81,250 81,000 98,050 109,000 130,000 101,750
Fourth 69,500 86,000 84,000 102,000 112,500 140,000 109,000
Fifth 76,000 91,000 87,500 105,500 116,000 150,000 115,000
Sixth 81,250 93,130 93,750 105,000 120,208 160,000 119,500
Seventh 86,000 95,500 99,800 109,250 124,500 172,500 126,000
Eighth 92,250 97,500 95,000 115,000 130,250 180,000 127,500
Summer (weekly):
First-year summer 800 1,050 1,225 1,730 2,000 2,100 1,800
Second-year summer 975 1,200 1,342 1,725 1,850 2,115 1,750
Third-year summer 842
1,100 1,250 2,100 2,400 2,100 2,000

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