The Bigger the Better? Understanding the Biglaw Salary Scale

You have no doubt heard the term Biglaw, but may not be able to place your finger on an exact definition. You are not alone in that.

Biglaw is an industry-specific nickname for high-revenue law firms with large headcounts. It can also refer to smaller firms that pay their lawyers a market rate salary, or even a medium-sized outfit with wide, international reach and notoriety.

All of these types of firms are typically headquartered in major US cities, like Los Angeles, New York, and Chicago, with multiple branches in smaller markets.

And, most notably, lawyers who work in Biglaw can expect to be paid based on the Cravath scale.

The Cravath Scale

The Cravath Scale, an offshoot of the Cravath system, is named after Cravath, Swaine & Moore LLP, the firm which is generally considered the authority on setting associate salaries. Its compensatory functions include factors like the number of years out of law school and particular law school classes, among others.

Lawyers on this pay scale not only earn the same salary but can also anticipate receiving the same annual market bonus. Based on the lockstep and closely monitored structure of the scale, if one firm offers an associate a higher salary, other firms tend to follow suit. But while this scale is based on a platform of consistency, changes have been experienced throughout the years.

To get a better understanding of how the Biglaw salary scale operates on a year-to-year basis, consider some examples of the history of trends certain law associates have experienced.

First Year Candidates

Needless to say, when fresh out of law school, successful first-year candidates have much to prove to the firms that take them on: long hours, dedicated work, limited time-off. But over the years, the take-home pay figures these associates earn may surprise you.

In 2006, about a year before the Great Recession, first-year associates in Biglaw firms earned an average salary of $145,000––with an additional $35,000 in bonuses, for a total of $180,000 (adjusted for inflation, this number is roughly $227,780).

. . in post-recession America, first-year associates earned about $5,000 less in 2009 than what the same grade of lawyers would earn ten years later.
Joshua Holt

By comparison, a first-year associate in 2019 earned $190,000 in salary and a further $15,000 in bonuses, for a total of $205,000. This would indicate that bonuses were higher pre-recession and have since decreased despite an increase in salary.

Compare these factors to the year at the end of the Great Recession. In 2009, first-year lawyers were paid, on average, $160,000 base salary, plus $7,500 in annual bonuses––for a total of $167,500. That same number, adjusted for inflation, is roughly $199,136. Therefore, in post-recession America, first-year associates earned about $5,000 less in 2009 than what the same grade of lawyers would earn ten years later. Additionally, a first-year lawyer in 2006 earned roughly $22,000 more than a first-year lawyer in 2019.

Mid-Tier Associates

Let’s take a look at another tier. Using the same dates, consider the salaries of mid-level associates. In 2006 (remember: a pre-recession year), a fifth-year lawyer working at a Biglaw firm earned a $200,000 salary and an additional $55,000 in bonuses for a total of $255,000. When adjusted for inflation, that figure is about $322,689.

Again, by comparison, a fifth-year associate in 2019 received a base salary of $280,000, this time with an additional $80,000 in bonuses, for a total of $360,000. Once we revisit a post-recession America, the numbers continue to demonstrate a shift. In 2009, fifth-year lawyers earned $230,000 in salary, with $25,000 in annual bonuses, for a total of $255,000. Adjusted for inflation: $303,162.

The Senior Associate

To fully grasp the impact of the salary scale, there is one last tier to consider: the senior associate. In 2007, lawyers in their eighth year of practice with Biglaw firms, took home $280,000 in salary and $110,000 in bonuses, totaling $390,000 (or $480,292 when adjusted for inflation). Two years later, the salary is the same (at $280,000) and the bonuses make a sharp drop down to $30,000 (for a total of $310,000––$368,550 with inflation).

By 2019, eighth-year lawyers are up to $345,000 in salary, plus around $100,000 in bonuses, for a total annual take-home pay of $445,000.

As you’ll notice, one consistent trend throughout the nearly fifteen-year timeframe is the significant decrease in bonus amounts for lawyers at all class levels during the recession years, followed by a sizable return to larger numbers in most recent years.

The Top Tier Firms

So, while there appear to be fluctuations within the Biglaw pay scale, there benefits to joining a top-tier firm are still numerous. Although salaries and bonuses garner most of the spotlight, Biglaw associates receive additional perks, including free meals for working late, as well as reimbursement for travel, entertaining clients and the all-important bar expenses.

Now that you have a better understanding of Biglaw––the pluses, the negatives, the inevitable economic impact(s)––would you still consider it worth the grade?

Author Bio

Joshua Holt is the publisher of BigLawInvestor and an associate at Goodwin Procter LLP. He may be contacted through LinkedIn and on Twitter.

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