Entry-Level Associate Salaries Continue to Remain Stable in Large Firms (8/31/04)

NALP has completed its tenth annual comprehensive survey of associate compensation with the 2004 Associate Salary Survey report. A total of 599 offices provided salary information as of April 1, 2004. With 18% of respondents representing firms of 50 or fewer attorneys and 27% 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 $65,000 in firms of 2-25 attorneys to $120,000 in firms of 500 attorneys or more, with a first-year median for all participating firms of $95,000. A comparison with figures reported for the prior four years 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 $95,000 in small firms to $185,000 in the largest firms, with a median for all participating firms of $135,000.

The volume of data in this year's survey allowed analyses for 29 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 Northeast, at $117,500, followed by $115,000 in the West, and $110,000 and $90,000 in the South and Midwest, respectively. The highest salary reported was $140,000. The typical salary for first-year associates in large firms stood at $125,000 in a number of cities beyond New York - these include Boston, Chicago, Los Angeles, San Francisco, and the Silicon Valley area. In contrast, medians in somewhat smaller metropolitan areas such as Cincinnati, Detroit, Minneapolis/St. Paul and Portland, OR were in the low to mid 80's. 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 and Orange County areas, San Diego, San Francisco, Sacramento, and the Silicon Valley area, the first-year median was $88,500.

The 2004 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 salary that is $25,000 to $50,000 higher, with the larger differentials among more senior associates.

Additional findings show that salaries for staff attorneys are typically $88,000 per year, while the median hourly salaries for law clerks range from $25 to $45 per hour depending on firm size.

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 70% of firms determine eligibility for bonuses on a "discretionary basis." Many firms (61%) use "meeting fixed goals" as a determinant of eligibility, although firms of 101-250 attorneys are most likely to do so (75%) and firms of less than 50 attorneys are least likely to do so. Bonus amounts were based on various factors, the most common of which were billable hours (71% of offices offering associate bonuses), merit (68%), and discretion (55%). About one-third 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, 2004)

Associate Year FIRM SIZE — Number of Attorneys
2-25 26-50 51-100 101-250 251-500 501 or More All Sizes
First $65,000 $72,900 $81,000 $88,500 $97,250 $120,000 $95,000
Second 70,000 75,000 84,000 89,500 100,025 130,000 100,000
Third 75,000 83,000 87,000 91,812 105,000 137,500 105,000
Fourth 82,000 87,500 91,750 96,200 110,000 150,000 110,000
Fifth 82,063 90,421 97,000 102,000 115,750 155,000 115,250
Sixth 87,000 94,750 98,000 110,000 121,750 167,500 121,750
Seventh 85,400 98,125 104,000 113,500 127,076 175,000 128,500
Eighth 95,015 99,700 108,000 122,250 139,000 185,000 135,000
1st-yr summer ($/week) 1,350 1,335 1,500 1,500 1,825 2,400 1,850
2nd-yr summer ($/week) 1,225 1,325 1,500 1,500 1,825 2,400 1,850
3rd-yr summer ($/week) 1,453 2,000 1,500 1,600 2,400 2,100

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