October 2018, NALP Bulletin
It does not take more than a quick look at the table below to see that starting salaries at the largest law firms have increased far more than at smaller firms. The difference is stark: whereas the median salaries at the largest firms (251+ attorneys) have gone up by 157%, at the smallest firms the median has not even doubled. This discrepancy has contributed to the evolution of the bi-modal nature of the salary distribution. (For more information, see "Salaries for New Lawyers: How Did We Get Here?," published in the January 2008 issue of the NALP Bulletin.)
Viewed another way, the median salary at the largest firms is over three times that of the smallest firms, compared with 2.3 times in 1993, and these numbers do not yet reflect the recent increase at many of the largest firms to a $190,000 starting salary. Salaries at smaller firms were able to "catch up" somewhat during periods when salaries at large firms were relatively flat, e.g., 2000-2006, only to lose ground with the next round of salary hikes at BigLaw.
It is also evident that over the past 25 years, a period ending with 2017, which is the most recent year for which law graduate salary information is available, there have been two periods of sustained stability in the salary medians at large firms: 2000-2006 and 2007-2015. During the former period, salary medians at smaller firms continued to trend upward; during the latter period, salary medians were generally flat across all firm sizes.
These figures can also be viewed in the context of law school tuition and movement in consumer prices. For example, according to the ABA, average tuition at private law schools almost tripled from 1993 to 2013 to about $42,000 (the latest year for which the ABA has posted figures), meaning that by 2013 the median salary at a small firm exceeded that tuition by less than 20%. The differential based on a salary of $160,000 at that time was not quite four times yearly tuition at a private law school. Finally, when salary growth over the 25-year period is compared with inflation of about 70% as measured by the annual CPI-U over the same period, median salaries have been essentially flat in firms of 11-100 attorneys. Growth in medians at firms of 251+ attorneys has been more than double that of inflation. Growth in the median at the smallest firms has exceeded inflation by a modest amount.
A Quarter Century Look at Median Starting Salaries by Firm Size — 1993-2017
|Year||FIRM SIZE (Number of Attorneys)|
|% Change 1993- 2017||146%||93%||69%||63%||67%||94%||157%||157%|
* The median for these categories is as shown. However, because so many salaries were reported at this level, the median salary is also the modal salary (the most frequently reported salary).
Source: Employment Report & Salary Survey reports/Jobs & JDs reports for the Classes of 1993-2017.