Salaries at Largest Firms Continue to Rise Rapidly
09-14-2007

According to the 2007 Associate Salary Survey just released by NALP, the median, and in fact prevailing, first-year associate salary at firms of 501+ lawyers rose to $145,000 as of April 1, 2007, an increase of $10,000 in just one year. This increase, on the heels of a similar increase between 2005 and 2006, contrasts with a period of relative stability from 2000 to 2005. And, even as the median stood at $145,000, salaries as high as $160,000 were already being reported by many firms. At small firms of 25 or fewer lawyers, the median was essentially unchanged at $68,000, compared with $67,000 in 2006. The median starting salary for firms of all sizes was $113,000 — up modestly from the 2006 median of $105,000, and driven mostly by growth at the high end of the scale.

The prevailing salary in the largest firms rose to $145,000 in a number of cities: Boston, Chicago, Los Angeles, the San Francisco Bay and Silicon Valley areas, and Washington, DC. In New York, the prevailing salary was even higher, $160,000.

A total of 679 offices provided salary information as of April 1, 2007. With one-quarter of respondents representing firms of 50 or fewer lawyers and 32% 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 $117,000 in small firms to $204,000 in the largest firms, with a median for all reporting firms of $157,000.

The volume of data in this year's survey allowed analyses for 37 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 $145,000, followed by $135,000 in the South and $132,500 and $103,500 in the West and Midwest, respectively. The highest first-year salary reported was $160,000. Salaries of $145,000 were not typical everywhere — medians in areas such as Cincinnati, Hartford, Indianapolis, Kansas City, Las Vegas, Portland, OR, Sacramento, St. Louis, and Tampa ranged from $90,000 to $97,500. 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 $80,000. In Virginia outside of Northern Virginia, the median was $83,000.

The 2007 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 suggests that, at least in large firms in major markets, 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 $98,000 per year, while the median hourly salaries for law clerks range from $24 to $50 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. About 60% 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 — 67% and 77%, respectively. Bonus amounts were based on various factors, the most common of which were billable hours (75% of offices offering associate bonuses), merit (78%), and discretion (63%). 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 $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 2007 Associate Salary Survey, now available from NALP's Bookstore.

Median Base Salaries by Associate Year and Firm Size (as of April 1, 2007)

Associate Year FIRM SIZE — Number of Lawyers
2-25 26-50 51-100 101-250 251-500 501+ All Sizes
Median # Rept. Median # Rept. Median # Rept. Median # Rept. Median # Rept. Median # Rept. Median # Rept.
First $68,000 65 $81,000 59 $90,000 83 $105,000 85 $115,000 112 $145,000 214 $113,000 618
Second 77,250 62 92,000 51 92,400 72 105,000 75 125,000 99 150,000 193 117,750 552
Third 86,000 56 93,575 56 99,500 66 106,000 73 127,000 106 150,000 184 122,000 541
Fourth 83,000 51 95,000 57 101,000 66 110,000 69 131,000 100 160,000 187 129,175 530
Fifth 88,750 48 99,500 54 105,000 71 115,000 66 139,500 102 170,000 190 135,000 531
Sixth 93,600 43 106,250 54 110,000 62 119,250 69 145,000 97 180,000 186 143,000 511
Seventh 105,000 39 118,000 41 110,000 63 122,500 62 151,675 101 190,000 184 151,000 490
Eighth 116,550 48 118,000 48 117,200 53 128,500 46 162,000 83 204,175 133 156,675 411
Summer Associates ($/week)
1st yr. 1,200 23 1,500 32 1,500 43 1,900 61 2,000 69 2,800 126 2,200 354
2nd yr. 1,225 48 1,450 46 1,675 57 1,925 78 2,100 85 2,800 157 2,100 471
3rd yr. 1,000 15 1,500 19 1,950 24 1,925 25 2,600 33 2,800 116 2,450 232

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

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