Top Firms Increase Compensation for Associates

BY KELLY BROWN

photo by Amy Tay

As on-campus recruitment drags on for 2Ls, and 3Ls look forward to starting their careers at firms across the country after graduation, the Harvard Law School campus is abuzz with news of increases in the standard base salary for first-year associates.

“Everyone has been talking about pay increases for first years,” said HLS 3L Rebecca Green. “It’s about time.”

The first-year salaries at top firms have held steady at $125,000 for the past five years, although the median salary for first-year associates at firms nationwide is $100,000, according to an annual survey by the National Association for Law Placement (NALP). Some firms have also paid year-end bonuses. A report issued by NALP in mid-August called entry-level salaries “remarkably stable.”

According to NALP, an increase in first-year associate pay is not as likely as an enhancement in the pay structure of midlevel and senior associates. This past summer, industry heavyweights like Skadden, Arps, Slate, Meagher & Flom; Howrey; and Arnold and Porter all announced raises for their upper-level D.C. associates, as did Boston staples like Goodwin Procter and Mintz Levin Cohn Ferris Glovsky and Popeo.

But the pay increases have amplified the pay disparity between associates at a firm like Skadden, where fourth-years earn $185,000 annually, those at Howrey, who make $165,000, and those at Steptoe & Johnson, who make $145,000.

Moreover, pay for public interest work does not nearly approach the earnings of private sector attorneys. NALP’s 2004 Associate Salary Survey indicates that the median salary for a fifth-year associate ranges from $82,000 to $155,000, which is two to three times what an attorney with similar experience makes at a public service organization.

To some, the difference in pay is not a deterrent to pursuing a career in the public sector. There are a number of students who opted not to do on-campus interviews, and at least several more who participated in OCI only to interview with small, private public interest firms or government employers. And an even greater number of HLS students admit that public interest might be more personally fulfilling, but that a firm salary was attractive after years as a student on a shoestring budget. As voiced by 2L Colleen O’Brien, who spent last summer at the Suffolk County District Attorney’s Office, “It is going to be harder than ever to turn down a firm job.”

Despite the “stability” in first-year salaries cited by NALP, New York Lawyer reports that partners, consultants and recruiters say that New York and California will likely increase entry-level pay this year or next. Skadden, which has paid first-years $140,000 since 2000, has set the industry standard, and some big firms may opt to match it.

One firm that has hinted at a pay raise is Heller Ehrman. “We’re looking at our compensation system from the ground up,” firm managing partner Robert Hubbell told New York Lawyer in August. “This year we heard fairly consistent feedback that associates wanted us to look at compensation.”

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