The most common first-year associate salary at law firms with more than 500 attorneys climbed to $135,000 in 2006, NALP reported. That figure likely was welcome relief for law graduates, whose salaries at those firms were stagnant at $125,000 from 2000 to 2005.
The rise in pay, in large part, represents a competition among law firms to recruit top talent in a market with plenty of work but a declining number of law school applicants. But what may be a quick recruiting fix could exacerbate the associate attrition problem.
“It can be ironically self-defeating,” said Ward Bower, a principal at Altman Weil, a law firm consultancy.
The escalation of starting salaries “compresses” compensation for junior attorneys in general, Bower explained, which means that third-, fourth- and fifth-year associates do not receive increases proportionate to what their beginning colleagues are making.
The result, then, is a heightened incentive for new lawyers to use their hefty salaries to pay down debt quickly and bid adieu to a big firm after a few years, Bower said.