Salaries Up at Largest Firms for First Time Since 2000
08-01-2006

According to the 2006 Associate Salary Survey just released by NALP, the median, and in fact prevailing, first-year associate salary at firms of 501+ lawyers rose to $135,000 this year. This represents an increase of $10,000 over the median figure for the previous five years — a figure that was steady at $125,000 from 2000 through 2005. At small firms of 25 or fewer lawyers, the median was unchanged at $67,000. The median starting salary for firms of all sizes was $105,000 — which compares to a 2005 median of $100,000.

The prevailing salary in the largest firms rose to $135,000 in a number of cities: Austin, Boston, Chicago, Dallas, Houston, Los Angeles and Orange County, the San Francisco Bay area, and Washington, DC. In New York, the prevailing salary increased even more, to $145,000.

A total of 564 offices provided salary information as of April 1, 2006. With 16% of respondents representing firms of 50 or fewer lawyers and 25% representing firms of more than 500 lawyers, the survey report sheds valuable light on the breadth of salary differentials among employers of varying sizes.

As expected, each year of associate experience brings several thousand dollars in increased compensation: median salaries for eighth-year associates ranged from $105,000 in small firms to $197,000 in the largest firms, with a median for all reporting firms of $150,000.

The volume of data in this year’s survey allowed analyses for 27 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 more than 250 lawyers was highest in the Northeast, at $127,500, followed by $125,000 in the South and $122,500 and $102,000 in the West and Midwest, respectively. The highest first-year salary reported was $150,000. Salaries of $135,000 were not typical everywhere — medians in areas such as Cincinnati, Columbus, Denver, Minneapolis/St. Paul, Portland, OR, and Tampa/St. Petersburg ranged from $82,500 to $95,000. 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 Los Angeles, San Diego, Sacramento, and San Francisco Bay area, the first-year median was $80,000.

The 2006 Associate Salary Survey also gathered data on salaries for intellectual property lawyers 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 lawyers command a salary that is $15,000 to $25,000 higher, with the larger differentials among more senior associates.

Additional findings show that salaries for staff attorneys are typically $96,000 per year, while the median hourly salaries for law clerks range from $22 to $40 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 use discretion as a factor to determine eligibility for bonuses. Almost two-thirds of firms use “meeting fixed goals” as a determinant of eligibility, although firms of 101-250 lawyers and 251-500 lawyers are most likely to do so — 77% and 72%, respectively. Bonus amounts were based on various factors, the most common of which were billable hours (75% of offices offering associate bonuses), merit (72%), and discretion (64%). Most (77%) of the largest firms of 501 or more lawyers reported paying a bonus to prior judicial clerks. Relatively few smaller firms did so. Bonuses of $10,000 to $15,000 were most typical.

More detailed results by city and region, including medians, averages, and ranges of base salaries for associates through the eighth year, as well as information on aggregate compensation for associates, and compensation structures, are found in the complete 2006 Associate Salary Survey, now available from NALP’s Bookstore.

 

Median Base Salaries by Associate Year and Firm Size
(as of April 1, 2006)


Associate Year FIRM SIZE — Number of Lawyers
2-25 26-50 51-100 101-250 251-500 501 or More All Sizes
Median # Median # Median # Median # Median # Median # Median #
First $67,000 27 $80,000 33 $85,000 65 $90,000 78 $115,000 157 $135,000 126 $105,000 486
Second 67,250 28 84,500 25 89,500 58 92,000 71 117,000 159 140,000 123 110,000 464
Third 72,500 27 81,000 32 89,500 60 98,750 68 121,000 157 150,000 123 115,000 467
Fourth 75,000 32 83,000 27 93,500 57 102,000 67 127,750 158 157,688 128 120,000 469
Fifth 85,000 25 93,000 30 100,000 57 106,583 68 135,500 152 168,643 130 128,500 462
Sixth 100,750 30 100,000 29 106,000 56 109,000 69 144,000 154 177,500 129 135,833 467
Seventh 110,000 19 104,750 24 112,000 55 117,500 64 148,500 156 185,000 127 144,500 445
Eighth 105,000 27 108,917 28 110,000 45 120,285 54 155,000 111 196,923 107 150,000 372
1st-yr summer ($/week) 720 14 1,275 19 1,325 32 1,550 55 2,400 88 2,400 83 2,000 291
2nd-yr summer ($/week) 1,100 21 1,363 32 1,500 54 1,635 75 2,215 108 2,400 93 1,950 383
3rd-yr summer ($/week) 880 11 1,343 8 1,750 21 1,635 21 2,400 39 2,250 55 2,115 155

The # columns indicate the number of offices reporting.

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