Entry-Level Associate Salaries Remain Stable in Large Firms (8/24/01)

NALP has completed its seventh annual comprehensive survey of associate compensation with the 2001 Associate Salary Survey report. Over 650 offices representing large and small firms alike (about one quarter of responses were from firms of 50 or fewer attorneys, and a similar percentage were from firms of more than 500 attorneys) provided salary information as of April 1, 2001.

The median salary for first-year associates ranged from $60,000 in firms of 2-25 attorneys to $115,000 in firms of 500 attorneys or more, with a first-year median for all participating firms of $95,000. A comparison with figures reported 12 months earlier, as of April 2000, reveals that first-year salaries have remained stable in firms of 251 or more attorneys, with a median of just over $110,000. This is in sharp contrast to a 30% increase in the median during the previous 12-month 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 $90,000 in small firms to $175,000 in the largest firms, with a median for all participating firms of $130,000.

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 $105,000 in the Northeast and $100,000 in the Midwest and South. 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 Tampa 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 $72,500.

More limited data on salaries for intellectual property attorneys suggest that IP attorneys command a premium of about $20,000. Salaries for staff attorneys are typically $81,000 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 70% of firms use a discretionary basis as one means of determining eligibility for bonuses. Many firms (64%) use "meeting fixed goals" as a determinant of eligibility — 40% 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 (73% of offices offering associate bonuses), billable hours (71%), and discretion (50%). About one third 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 Salaries by Associate Year and Firm Size (as of April 1, 2001)

Associate Year FIRM SIZE - Number of Attorneys
2-25 26-50 51-100 101-250 251-500 501 or more All Sizes
First $60,000 $70,500 $75,900 $90,000 $108,750 $115,000 $95,000
Second 65,000 75,000 80,000 93,000 111,569 120,000 97,500
Third 70,500 77,000 85,000 96,500 118,334 127,484 101,000
Fourth 76,000 82,375 89,000 102,000 127,059 140,000 110,000
Fifth 80,000 84,000 93,000 106,000 136,863 150,000 113,750
Sixth 84,500 88,000 95,000 110,000 145,000 160,000 120,000
Seventh 87,500 92,000 100,500 115,000 151,600 170,000 126,000
Eighth 90,000 85,000 104,000 120,000 143,000 175,000 130,000
Summer (weekly):
First-year summer 856 1,000 1,400 1,640 2,000 2,300 1,825
Second-year summer 950 1,100 1,392 1,675 2,100 2,300 1,800
Third-year summer 938 1,000 1,384 1,753 2,108 2,400 2,000

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