Entry-Level Associate Salaries Again Remain Stable in Large Firms (8/8/03)

NALP has completed its ninth annual comprehensive survey of associate compensation with the 2003 Associate Salary Survey report. A total of 578 offices provided salary information as of April 1, 2003. With 25% of respondents representing firms of 50 or fewer attorneys and 25% representing firms of more than 500 attorneys, the survey report sheds valuable light on the breadth of salary differentials among employers of varying sizes.

The median salary for first-year associates ranged from $59,500 in firms of 2-25 attorneys to $113,000 in firms of 500 attorneys or more, with a first-year median for all participating firms of $93,190. A comparison with figures reported as of April 2002, April 2001, and April 2000 reveals that first-year salaries have remained stable in firms of 251 or more attorneys during this period, with a median of about $110,000. This is in sharp contrast to a 30% increase in the median, from April 1999 to April 2000. In some major cities, such as Los Angeles and New York City, as well as the Silicon Valley area, the prevailing salary of $125,000 for first-year associates in large firms has remained unchanged since April 2000. Salary stability at this level was last experienced almost a decade ago in the mid-nineties.

As expected, each year of associate experience brings several thousand dollars in increased compensation: median salaries for eighth-year associates ranged from $106,000 in small firms to $165,000 in the largest firms, with a median for all participating firms of $124,900.

The volume of data in this year's survey allowed analyses for 30 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 associates in all firms of over 251 attorneys was highest in the West, at $120,000, followed by $117,000 in the Northeast, and $106,000 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 beyond just New York - these include Boston, Chicago, Los Angeles, San Francisco, and the Silicon Valley area. In contrast, medians in smaller metropolitan areas like Columbus, Las Vegas, and Omaha were about $70,000. Contrasts between large cities and smaller metropolitan areas within the same state are also evident. For example, in firms reporting from areas in California outside the Los Angeles, San Diego, San Francisco, and San Jose areas, the first-year median was $70,000.

The 2003 Associate Salary Survey also gathered practice-specific data on salaries for intellectual property attorneys as well as general data on salary levels for staff attorneys and law clerks. Though data on salaries for intellectual property attorneys was more limited, it clearly suggests that IP attorneys command a $20,000 - $30,000 higher salary at the junior level, with the difference increasing to $65,000 to $70,000 among senior (7th and 8th year) associates.

Additional findings show that salaries for staff attorneys are typically $93,000 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 on bonus systems: about 67% of firms determine eligibility for bonuses on a "discretionary basis." Many firms (60%) use "meeting fixed goals" as a determinant of eligibility - 42% of small firms consider this factor, while about three quarters of the largest firms do so. Bonus amounts were based on various factors, the most common of which were merit/performance (76% of offices offering associate bonuses), billable hours (70%), and discretion (50%). About one quarter of the firms reported paying a bonus to prior judicial clerks, with large firms most likely to offer such bonuses. Bonuses of $10,000 - $15,000 were most typical.

Median Base Salaries by Associate Year and Firm Size (as of April 1, 2003)

Associate Year FIRM SIZE — Number of Attorneys
2-25 26-50 51-100 101-250 251-500 501 or More All Sizes
First $59,500 $71,000 $80,000 $85,000 $102,00 $113,000 $93,190
Second 64,500 75,000 82,800 87,000 105,000 120,000 94,000
Third 67,250 81,000 85,700 92,838 110,000 128,417 99,250
Fourth 72,000 85,000 89,513 95,500 114,000 135,000 105,000
Fifth 81,400 89,000 92,500 100,450 118,900 144,500 110,000
Sixth 95,000 99,000 98,650 104,000 126,125 147,688 120,000
Seventh 95,000 99,750 101,666 110,000 133,250 157,500 120,875
Eighth 106,000 100,000 105,000 110,000 143,150 165,000 124,900
1st-yr summer ($/week) 865 1,100 1,538 1,500 1,925 2,250 1,750
2nd-yr summer ($/week) 924 1,250 1,500 1,500 2,000 2,275 1,730
3rd-yr summer ($/week) 943 1,200 1,300 1,500 2,050 2,375 1,920

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