08-21-2008

According to the 2008 Associate Salary Survey just released by NALP, the median, and in fact prevailing, first-year associate salary at firms of 701+ lawyers rose to $160,000 this year, an increase of $15,000 in just one year. This increase continues a pattern of increases that started in early 2006, and contrasts with a period of relative stability from 2000 to 2005. At small firms of 25 or fewer lawyers, the median was $73,000, compared with $68,000 in 2007. The median starting salary for firms of all sizes was $120,000 — up considerably from the 2007 median of $113,000, and driven in part by growth at the high end of the scale, but also by increases of at least $5,000 in every firm size.

The prevailing salary in the largest firms rose to $160,000 in a number of cities: Boston, Chicago, Los Angeles and Orange County, the San Francisco Bay and Silicon Valley areas, and Washington, DC. In New York, the prevailing salary had reached $160,000 a year earlier.

A total of 715 offices provided salary information as of April 1, 2008. With 18% of respondents representing firms of 50 or fewer lawyers and 35% 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 $96,500 in small firms to $230,000 in the largest firms, with a median for all reporting firms of $161,500.

The volume of data in this year’s survey allowed analyses for 34 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 West, at $145,000, followed by $142,500 in the Northeast, $140,000 in the South, and $107,500 in the Midwest. The highest first-year salary reported was $167,500. Salaries of $160,000 were not typical everywhere — medians in areas such as Columbus, Detroit, Hartford, Indianapolis, Kansas City, Portland, OR, and St. Louis, ranged from $88,500 to $107,500. 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, Orange County, San Diego, Sacramento, and the San Francisco Bay area, the first-year median was $103,5000. In Virginia outside of Northern Virginia, the median was $81,000.

The 2008 Associate Salary Survey also gathered information on salaries for intellectual property lawyers as well as general data on salary levels for staff attorneys and law clerks. Though information on salaries for intellectual property attorneys was more limited, it suggests that, at least in large firms in major markets, IP lawyers may command a salary that is $10,000 to $20,000 higher, with the larger differentials among more senior associates.

Additional findings show that salaries for staff attorneys are typically $103,000 per year, while the median hourly salaries for law clerks range from $20 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 72% of firms use discretion as a factor to determine eligibility for bonuses. About 32% use “meeting fixed goals” as a determinant of eligibility, although firms of 101-250 lawyers and 701+ lawyers are most likely to do so — about 43%. Bonus amounts were based on various factors, the most common of which were billable hours (74% of offices offering associate bonuses), merit (73%), and discretion (59%). Nearly all of the largest firms of 701 or more lawyers reported paying a bonus to prior judicial clerks. Relatively few smaller firms did so. Bonuses of $10,000 to $25,000 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 2008 Associate Salary Survey, now available from NALP’s Bookstore.

Median Base Salaries by Associate Year and Firm Size (as of April 1, 2008)

Note: The "# Rept." columns indicate the number of offices reporting. Medians have been rounded to the nearest $25.

About NALP: Founded in 1971, the National Association for Law Placement, Inc.® (NALP) is dedicated to facilitating legal career counseling and planning, recruitment and retention, and the professional development of law students and lawyers. NALP maintains an online archive of press releases at www.nalp.org — click on Research & Statistics > Press Releases. For additional information about NALP research, contact Judith Collins (jcollins@nalp.org), Director of Research, or James G. Leipold (jleipold@nalp.org), Executive Director, at 202-835-1001. Mailing address: National Association for Law Placement, 1025 Connecticut Avenue NW, Suite 1110, Washington, DC 20036-5413.