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Salaries at Largest Firms Peak in 2009

LawFuel.com – August 01, 2009 – NALP has just released its 2009 Associate Salary Survey. With salary information collected as of April 1, 2009, this year’s report reflects what is likely to be the apogee of large firm salaries for the foreseeable future, and represents the culmination of increases since 2006. The prevailing salary at the largest firms in many cities, including Austin, Boston, Chicago, Dallas, Houston, Los Angeles and Orange County, New York, San Diego, San Francisco, San Jose, and Washington, DC, stood at $160,000. Just two years ago the prevailing salary had reached $160,000 only in New York. However, the fact that during the period following April 1, 2009, some large firms were cutting salaries means that the $160,000 figure may not be sustained in many markets.

The overall median starting salary was $130,000, and ranged from $70,000 in firms of 2-25 lawyers to $135,000 in firms of 501-1,000 lawyers, and $160,000 in firms of more than 1,000 lawyers. (See table on following page.) Most medians in firms of 500 or fewer lawyers were fairly stable compared with 2008.

A total of 642 offices provided salary information as of April 1, 2009. With 14% of respondents representing firms of 50 or fewer lawyers and 42% representing firms of more than 500 lawyers, the survey report sheds valuable light on the breadth of salary differentials among employers of varying sizes at the national level.

As expected, each year of associate experience brings several thousand dollars in increased compensation: median salaries for eighth-year associates ranged from $111,625 in small firms to $258,000 in the largest firms, with a median for all reporting firms of $171,275.

The volume of data reported on this year’s survey allowed analyses for 29 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 $160,000, followed by $145,000 in the Northeast and the South, and $117,500 in the Midwest. The highest first-year salary reported was $165,000. Salaries of $160,000 were not typical everywhere — medians in areas such as Cincinnati, Detroit, Grand Rapids, Indianapolis, Las Vegas, Portland, OR, and Tennessee, ranged from $91,000 to $107,500. Contrasts between large and smaller metropolitan areas are also evident. For example, in large metropolitan areas of more than 5 million, the prevailing starting salary in firms of more than 250 lawyers was $160,000; in metropolitan areas of fewer than 1.5 million, the median was $100,000.

The 2009 Associate Salary Survey also gathered information on salaries for intellectual property lawyers as well as on salary levels for staff attorneys and law clerks. Information on salaries for intellectual property attorneys was more limited, and in large part reported by firms of more than 250 lawyers. The information reported suggests that, compared with these size firms as a whole, IP lawyers may command a salary that is $15,000 to $20,000 higher among junior associates but that the differential is larger among more senior associates. However, when IP salaries are compared with those of the very largest firms (those of more than 1,000 lawyers) as a whole, medians are very similar.

Additional findings show that salaries for staff attorneys are typically just over $100,000 per year, while the median hourly salaries for law clerks range from $19 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 68% of firms use discretion as a factor to determine eligibility for bonuses. About 35% use “meeting fixed goals” as a determinant of eligibility, although firms of more than 1,000 lawyers are most likely to do so — about 48%. Bonus amounts were based on various factors, the most common of which were billable hours (74% of offices offering associate bonuses), merit (68%), and discretion (60%). Nearly all of the largest firms of more than 1,000 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 2009 Associate Salary Survey, now available from NALP’s Bookstore.

To view a summary table of Median Base Salaries by Associate Year and Firm Size go to http://www.nalp.org/salariesjuly09.

About NALP:

Founded in 1971 as the National Association for Law Placement, Inc.®, NALP — The Association for Legal Career Professionals — 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” (or “Media & Sponsorships” > “Press Releases”).

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